[Congressional Record Volume 151, Number 149 (Thursday, November 10, 2005)]
[Senate]
[Pages S12689-S12692]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         SUBMITTED RESOLUTIONS

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SENATE RESOLUTION 302--TO EXPRESS THE SENSE OF THE SENATE REGARDING THE 
 IMPACT OF MEDICAID RECONCILIATION LEGISLATION ON THE HEALTH AND WELL-
                           BEING OF CHILDREN

  Mr. BINGAMAN (for himself, Mr. Rockefeller, Mr. Reed, Mrs. Clinton, 
Mrs. Murray, Mr. Baucus, Ms. Mikulski, Mr. Corzine, Mr. Lautenberg, Mr. 
Dodd, and Mr. Salazar) submitted the following resolution; which was 
referred to the Committee on Finance:

                              S. Res. 302

       Whereas the Medicaid program provides health insurance for 
     more than \1/4\ of children in the United States and pays for 
     more than \1/3\ of the births and health care costs for 
     newborns in the United States each year;
       Whereas the Medicaid program provides critical access to 
     health care for children with disabilities, covering more 
     than 70 percent of poor children with disabilities and 
     children with special needs in low-income working families, 
     including 1 in 9 military children with special health care 
     needs;
       Whereas low-income children who depend on the Medicaid 
     program experience a rate of health conditions and health 
     risks much greater than those found among children who are 
     not low-income;
       Whereas the Medicaid program is the largest source of 
     payment for health care provided to children with special 
     health care needs in the Nation and is also a critical source 
     of funding for health care provided to children in foster 
     care and for health care services provided in schools to 
     children eligible for coverage under the Medicaid program;
       Whereas the Medicaid program is the single largest source 
     of revenue for the Nation's safety net hospitals, including 
     children's hospitals and community health centers, and is 
     critical to the ability of these providers to adequately 
     serve all children;
       Whereas the Medicaid program, in combination with the State 
     Children's Health Insurance Program, has helped to 
     dramatically

[[Page S12690]]

     reduce the number of uninsured children, cutting the rate by 
     more than \1/3\ between 1997 and 2003;
       Whereas without the Medicaid program, the number of 
     children without health insurance--8,300,000 in 2004--would 
     be substantially higher;
       Whereas the Medicaid program's guarantee of affordable 
     coverage and access to necessary health care is essential to 
     the ability of the Medicaid program to adequately serve 
     children whose families have low-incomes and whose health 
     care expenses often exceed the norm;
       Whereas for nearly 40 years, the Medicaid program has 
     ensured particularly comprehensive benefits for infants, 
     young children, school-age children, and adolescents, in 
     recognition of the unique growth and development needs of 
     children and the importance of strong and healthy young 
     adults to the safety and welfare of the Nation;
       Whereas the Medicaid program's special benefits, added in 
     1967, were a direct response to findings of the Department of 
     Defense regarding pervasive physical, dental, and 
     developmental conditions among low-income military recruits, 
     and the implications of these findings for national 
     preparedness;
       Whereas the Medicaid program's benefits for children are 
     comprehensive, in order to ensure that all low-income 
     infants, even those born too soon and too small, have the 
     chance to survive and thrive into a healthy childhood;
       Whereas the Medicaid program's benefits for children help 
     ensure that young children grow and develop properly, arrive 
     at school ready to learn, and have the opportunity to achieve 
     their full educational potential;
       Whereas the Medicaid program ensures that children have the 
     benefits, health services, and health care support they need 
     to be fully immunized, and that children can secure 
     eyeglasses, dental care, and hearing aids when necessary, and 
     have access to comprehensive, regularly scheduled, and as-
     needed health examinations, as well as preventive 
     interventions, to correct physical and mental conditions that 
     threaten to delay proper growth and development;
       Whereas the Medicaid program ensures that the sickest and 
     highest risk infants, toddlers, and children have access to 
     the specialized diagnostic and treatment care that become 
     essential when serious illness strikes;
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives, as reported out by the Committee on 
     Energy and Commerce, would eliminate Medicaid Early and 
     Periodic Screening Diagnosis and Treatment (EPSDT) benefit 
     rules outright for approximately 6,000,000 low-income 
     children, whose family incomes are only slightly above the 
     Federal poverty level and who are therefore without the 
     resources to secure basic health care or essential medical 
     care;
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives permits States to eliminate the 
     following benefits for children: comprehensive developmental 
     assessments, assessment and treatment for elevated blood lead 
     levels, eyeglasses, dental care, hearing aids, wheelchairs 
     and crutches, respiratory treatment, comprehensive mental 
     health services, prescription drugs, and speech and physical 
     therapy services;
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives would allow States to impose 
     premiums, deductibles, and copayments on children whose 
     families have incomes only slightly above the Federal poverty 
     level and who therefore cannot afford the cost of medically 
     necessary care and millions of children, especially infants, 
     young children, and school-age children with serious 
     disabilities and high health care needs, would potentially be 
     affected;
       Whereas although title III of the budget reconciliation 
     bill of the House of Representatives purports to exempt poor 
     children, it permits States to redefine the meaning of 
     poverty virtually without limitation, in order to eliminate 
     cost sharing safeguards for poor children currently available 
     under the law;
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives would permit States to require that 
     even the poorest children pay copayments for prescription 
     drugs, without providing exemptions to this requirement, not 
     even in the case of children in foster care or special needs 
     adoptions;
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives would permit States to allow 
     hospital emergency departments to impose cost sharing 
     requirements on the poor and on near-poor infants, toddlers, 
     and young children, without providing exemptions to this 
     requirement, not even in the case of children in foster care 
     or special needs adoptions;
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives would permit providers to turn 
     children away because their families are unable to pay 
     deductibles and copayments;
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives would potentially eliminate medical 
     case management coverage for Medicaid-enrolled children in 
     foster care, even though Federal foster care programs 
     expressly assume that medical case management services for 
     such children will be furnished through the Medicaid program;
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives would permit States to entirely 
     replace the Medicaid program for children with ``health 
     opportunity accounts'' that eliminate all Medicaid coverage 
     in favor of cash accounts of $1,000 and catastrophic-only, 
     high deductible health insurance coverage for children with 
     family incomes only slightly above the Federal poverty level; 
     and
       Whereas title III of the budget reconciliation bill of the 
     House of Representatives would only exempt the poorest 
     children from participation in health opportunity accounts 
     during the first 5 years of the demonstration projects under 
     which the accounts are available and would permit States to 
     redefine the meaning of poverty to any level, no matter how 
     low: Now, therefore, be it
       Resolved, That it is the sense of the Senate that the 
     conferees for any budget reconciliation bill of the 109th 
     Congress shall not report a reconciliation bill that would--
       (1) allow States to--
       (A) reduce coverage for medically necessary health care for 
     poor or low-income children; or
       (B) impose premiums, deductibles, copayments, or 
     coinsurance on poor or low-income children;
       (2) reduce coverage of, or payment for, medical case 
     management services under title XIX of the Social Security 
     Act for children in foster care, including targeted case 
     management services; or
       (3) allow the Secretary to undertake any Health Opportunity 
     Account demonstrations involving poor or low-income children.
  Mr. BINGAMAN. Mr. President, I am submitting a Senate resolution 
today with Senators Rockefeller, Reed, Clinton, Murray, Baucus, Akaka, 
Mikulski, Corzine, Lautenberg, and Dodd that does three things: 1. 
Explains the importance of Medicaid to children; 2. Explains the 
consequences of the various provisions in the House budget 
reconciliation bill that will negatively impact the health and well-
being of children's health; and 3. Expresses the Sense of the Senate 
that the conferees for the budget reconciliation bill shall not report 
back language that has negative consequences for the health and well-
being of children.
  This resolution highlights the many ways in which the House of 
Representatives budget reconciliation bill affects the health of low-
income children across this Nation. According to the Congressional 
Budget Office (CBO), the House budget reconciliation package increases 
cost-sharing placed on low-income Medicaid beneficiaries, even while 
reducing health services by $6.5 billion over 5 years and an astounding 
$30.1 billion over 10 years.
  In sharp contrast, the Senate budget reconciliation bill includes 
only one provision--the targeted case management reduction of $750 
million over 5 years--that could negatively affect young Medicaid 
beneficiaries.
  For children, the impact would be devastating. Medicaid covers more 
than 27 million children--or almost one in four--American children. 
Medicaid also covers more than one-third of all the births and health 
care costs of newborns in the United States each year.
  In spite of the importance of Medicaid, the House budget package 
increases cost-sharing for all children who rely on it for prescription 
drugs and emergency room services. The bill also allows States to 
impose premiums for the first time under Medicaid for children's 
coverage and deny children coverage even if their family cannot afford 
to pay the premium or other cost-sharing.
  The House budget bill also allows States to eliminate the Early and 
Periodic Screening Diagnosis and Treatment (EPSDT) benefit rules that 
are so critical to the health of children with special health care 
needs or disabilities. Benefits that could be lost include: 
comprehensive developmental assessments, assessment and treatment for 
elevated blood lead levels, eyeglasses, dental care, hearing aids, 
wheelchairs and crutches, respiratory treatment, comprehensive mental 
health services, prescription drugs, and speech and therapy services.
  In short, the vast majority or three-fourths of the savings in the 
House bill come at the expense of low-income Medicaid beneficiaries. By 
CBO's estimate, half of the beneficiaries affected by the increased 
cost sharing provisions in the House package are imposed on children, 
and half of those who will lose Medicaid benefits would be children.
  Without the Medicaid program, the number of children without health 
insurance--8.3 million in 2004--would be substantially higher. In fact, 
the number of uninsured children has dropped

[[Page S12691]]

by over one-third of a million children over the past 4 years due in 
large part to Medicaid and the State Children's Health Insurance 
Program, or SCHIP.
  As Representative Frank Pallone noted, ``Once again, Medicaid has 
proven to be part of the solution, not the problem. Burdensome cost-
sharing requirements and reduced benefits included in the 
reconciliation package will undoubtedly weaken Medicaid's ability to 
ensure all of America's children have access to the health care they 
need.''
  Representative Lois Capps of California adds, ``. . . this 
reconciliation package would allow states to deny critical medical 
screening, treatment, and follow up care for these children. And it 
would allow excessive out of pocket costs and premiums which--
experience shows--causes families to lose coverage or fail to get even 
needed services for children.''
  I urge Senators to closely monitor what the House of Representatives 
is doing with respect to the health and well-being of children in their 
budget reconciliation bill. Low-income children should not be asked to 
bear the burden of billions of dollars in budget cuts--cuts that are 
not even being used to reduce the deficit, but rather to help pay for 
tax cuts.
  There are a variety of reasons that I did not support the Senate's 
budget reconciliation bill, but even with its imperfections, it is far 
superior to the House's budget package. If nothing else, it does not 
contain the types of cuts to children's health that are included in the 
House bill.
  Senators need to know that the House budget package is terrible for 
the health and well-being of the children in our country.
  With that in mind, I offer today's Senate resolution on children's 
health.
  I ask for unanimous consent that a copy of the CBO analysis of the 
impact that the Medicaid provisions in the budget reconciliation bill 
passed by the House Energy and Commerce Committee be printed in the 
Record.
  There being no objection, the analyses was ordered to be printed in 
the Record, as follows:

 Congressional Budget Office--Additional Information on CBO's Estimate 
for the Medicaid Provisions in H.R. 4241, the Deficit Reduction Act of 
                                  2005

       The Congressional Budget Office (CBO) estimates that the 
     provisions of subtitle A of Title III of H.R. 4241 would 
     reduce federal Medicaid spending by $12 billion over the 
     2006-2010 period and $48 billion over the 2006-2015 period 
     (see CBO's cost estimate of the reconciliation 
     recommendations of the House Committee on Energy and 
     Commerce, issued on October 31, 2005). About 75 percent of 
     those savings are due to provisions that would increase 
     penalties on individuals who transfer assets for less than 
     fair market value in order to qualify for nursing home care, 
     restrict eligibility for people with substantial home equity, 
     allow states to impose higher cost-sharing requirements and/
     or premiums on certain enrollees, and permit states to 
     restrict benefits for certain enrollees. This memorandum 
     provides additional information about the estimates and the 
     number and types of Medicaid enrollees who would be affected 
     by those provisions.


                    Asset Transfers and Home Equity

       CBO estimates that the provisions changing the treatment of 
     asset transfers and home equity would reduce net Medicaid 
     outlays by $2.5 billion over the next five years and by $6.8 
     billion over the next 10 years. Of those amounts, more than 
     three-quarters is due to the proposed change to the start 
     date of the penalty for prohibited transfers and the 
     prohibition of nursing home benefits for individuals with 
     home equity exceeding $500,000.
       Under current law, very few of the applicants for Medicaid 
     incur penalties for prohibited asset transfers. CBO estimates 
     that changing the start date of the penalty would result in a 
     delay of Medicaid eligibility for approximately 120,000 
     people in 2010, growing to approximately 130,000 in 2015. 
     Such delays would occur because individuals would either 
     incur a penalty for prohibited transfers or refrain from 
     making such transfers and instead pay for some nursing home 
     care themselves. Those figures represent about 15 percent of 
     the new recipients of Medicaid nursing home benefits each 
     year.
       The majority of penalties or delays would apply to 
     individuals who otherwise would have employed a strategy to 
     preserve half of their assets--the so-called ``half-a-loaf' 
     strategy. Under the bill, some of those individuals would 
     simply not transfer assets and thus not incur a penalty, but 
     instead accept a delay in Medicaid eligibility. The bill's 
     provisions that allow greater exemptions for hardship 
     situations reduce the number of affected individuals, while 
     the changes to the look-back window increase that number.
       The period of delayed eligibility for affected recipients 
     would range from one day to more than one year, averaging 
     about three months in 2006 and decreasing to an average of 
     about two months in 2015. The length of the delay would 
     decrease because payment rates for nursing home services are 
     expected to grow faster than assets.
       CBO estimates that about 1 percent of the unmarried 
     applicants for Medicaid nursing home benefits have homes 
     valued at over $500,000. (The policy would have a negligible 
     effect on the treatment of the homes of married individuals.) 
     That figure translates to about 5,000 affected individuals 
     annually by 2010.


                              Cost Sharing

       CBO estimates that the provisions allowing states to impose 
     higher cost-sharing requirements and premiums on certain 
     recipients would reduce Medicaid spending by $10 billion over 
     the 2006-2015 period. Of that total, about two-thirds of the 
     estimated savings are due to increased cost sharing and one-
     third to higher premiums. We anticipate that states would 
     phase in changes in cost sharing and that those changes would 
     not be fully effective until 2012.
       We assume that states would impose cost-sharing 
     requirements primarily for services such as prescription 
     drugs, physician services, and non-emergency visits to 
     emergency rooms. We also anticipate that states would require 
     greater cost-sharing payments by individuals and families 
     with higher income than by those with income just above the 
     poverty level. Although states would be likely to raise 
     nominal copay amounts and increase them over time, we expect 
     that aggregate enrollee cost sharing would remain, on 
     average, below limits established under H.R. 4241.
       Under the bill, CBO estimates that states with about one-
     half of all Medicaid enrollees would impose cost-sharing 
     requirements (for at least one service) on enrollees who 
     currently are not subject to cost sharing. We estimate that 
     the number of affected enrollees would increase from 7 
     million in 2010 to 11 million by 2015, and that about half of 
     those enrollees would be children. States also would 
     increase cost-sharing requirements for many of those who 
     are subject to cost sharing under current law and thus 
     increase copays for another 6 million enrollees by 2015. 
     In sum, we expect that about 17 million people--27 percent 
     of Medicaid enrollees--would ultimately be affected by the 
     cost-sharing provisions of the bill.
       We estimate that about 80 percent of the savings from 
     higher cost sharing would be due to decreased use of 
     services; the remaining 20 percent would reflect lower 
     payments to providers. CBO anticipates that about three-
     quarters of states imposing cost sharing would allow 
     providers to deny services for lack of payment and that there 
     would be greater decreases in utilization in those states. 
     The estimate accounts for the fact that savings from the 
     reduced use of certain services (such as prescription drugs 
     or physician services) could be partly offset by higher 
     spending in other areas (such as emergency room visits).


                                Premiums

       CBO estimates that about 75 percent of the savings from 
     higher premiums under H.R. 4241 would be due to higher 
     premium receipts and the remaining 25 percent would stem from 
     individuals leaving the Medicaid program.
       States would charge premiums to about 1 million enrollees 
     by fiscal year 2010 and to about 2 million enrollees by 
     fiscal year 2015. CBO expects that most of those enrollees 
     would be nondisabled adults and children and that, on 
     average, premiums would range from 1 percent to 3 percent of 
     family income. Those amounts would be less than the maximum 
     allowed by the legislation. In response, some beneficiaries 
     would leave Medicaid or would be disenrolled for nonpayment. 
     CBO estimates that about 70,000 enrollees would lose coverage 
     in fiscal year 2010 and that 110,000 would lose coverage in 
     fiscal year 2015 because of the imposition of premiums.


                      Alternative Benefit Packages

       CBO's estimate assumes that states with about 20 percent of 
     Medicaid enrollees would provide reduced benefit packages to 
     at least some of their enrollees. Those benefit reductions 
     would affect an estimated 2.5 million Medicaid enrollees in 
     2010 and about 5 million enrollees by 2015--about 8 percent 
     of the Medicaid population--and that about one-half of those 
     receiving alternate benefit packages would be children. We 
     anticipate that states would phase in benefit reductions and 
     that those changes would not be fully effective until 2015. 
     CBO expects that only a limited number of states would 
     exercise that option because the bill would prohibit states 
     that provide limited benefit packages from expanding such 
     coverage to groups not covered under the state plan when the 
     bill is enacted.
       While many states trimming benefits likely would offer a 
     benefit package for Medicaid children similar to that 
     provided in the State Children's Health Insurance Program, we 
     expect that others would look to their state employee 
     programs or private-sector plans as models for benefits to 
     offer parents, families, and some disabled adults. CBO 
     anticipates that only a few states would offer benefit plans 
     that offer leaner benefits than those types of plans, though 
     the bill would permit them to do so.
       On average, CBO expects that alternative benefit packages 
     provided by the states would reduce per capita spending by 15 
     percent to 35 percent for the affected populations, depending 
     on the eligibility group

[[Page S12692]]

     targeted and the generosity of the state's program under 
     current law. Most of the reductions would be for services 
     such as dental, vision, mental health, and certain therapies, 
     but also could include restrictions on the amount, duration, 
     and scope of coverage for other services.


                        Uncertainty of Estimates

       CBO's estimates are particularly uncertain in two areas. We 
     have limited information about people's asset holdings prior 
     to their admission to nursing homes and about the number of 
     people engaging in asset transfers that would be prohibited 
     by the bill. How states would react to this legislation is 
     also very uncertain. We anticipate wide variation in the 
     extent to which different states would reshape their Medicaid 
     programs by increasing cost sharing or premiums or by 
     restricting benefits. Some states might make limited changes, 
     such as increasing cost sharing for a few specific services 
     or certain enrollees, while others would make more far-
     reaching changes. Our estimates, therefore, account for a 
     range of possible responses by states to the bill.

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