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News April 2012

Washington Watch

Washington on the Move: Long Term Care Program Dies, So May Some Patients Facing Drug Shortages, And the High Court Hurries Up – Or Maybe Not

By Alan M. Schlein

While the need for long term care remains and continues to grow as the baby boom generation starts retiring, the program’s administrator, Kathy Greenlee, said the numbers just didn’t add up.


For months, doctors, patients and others have been complaining about the unavailability of key drugs to treat cancer, to control infections and even to provide basic electrolytes to patients who need intravenous feeding.


The Court agreed to hear a lawsuit brought by 26 states and the National Federation of Independent Business that says Congress exceeded its power by requiring most Americans to buy health insurance starting in 2014.

c_stingerapril2bThe Obama administration will not implement a new program to provide Americans with long-term care insurance, abandoning a controversial part of the health care overhaul law the president signed last year.

With the Supreme Court agreeing to hear an appeal of the health care law this term with a potential decision as early as June, 2012 -- in the middle of the presidential election season -- federal officials effectively shut down the part of the health care law that would have helped consumers cover some long-term care costs. They argued that they just could not find a way to make it work financially.

The move does not affect the rest of the health care law, but by removing this unique standalone provision, it will save more than $70 billion in expected federal budgetary savings over 10 years. The savings would have come from having policyholders pay premiums for the first few years, but not receive benefits until 2017.

But the decision to give up on what was once touted as a key benefit of the law marks a major retreat for the Obama administration and a vindication for critics who have voiced doubt about the promises that Democrats made as they fought to enact the law last year.

After looking at several options to finance the program, the Obama administration did an about-face and determined that the long-term program, known as the Community Living Assistance Services and Supports (or CLASS Act), which had been championed by the late Sen. Ted Kennedy, could not meet the three important criteria as intended – that it be self-sustaining, financially sound for 75 years and affordable to consumers. Kennedy had fought most of his career for a government entitlement to help elderly Americans pay for home care or a nursing home.

Kennedy had pushed hard for the plan, before his death, amid evidence that few Americans have private insurance for long term care. Many seniors face tens of thousands of dollars in bills for home care or for stays in nursing homes which are not covered by Medicare. Nursing home stays are covered by the Medicaid program for the poor. But in order to qualify for aid, seniors have to spend down their resources, only to then become a burden on the government. Senior advocacy groups like AARP, the Alzheimer’s Association and the

National Council on Aging argue that this all can be avoided if workers paid a portion of their paycheck into a long term insurance program so they could draw on the benefits when they get old.

Democrats had picked up on this idea, crafting the long term care plan by allowing people to pay into the CLASS program for five years before benefits became available, which they argued, would show a positive balance for years, helping offset the overall cost of the health care law.

As it had been approved, the program would have allowed working adults to apply for insurance that would provide up to $50 a day in cash benefits if they became disabled. That money could be used to help with in home assistance or nursing home care.

While the need for long term care remains and continues to grow as the baby boom generation starts retiring, the program’s administrator, Kathy Greenlee, said the numbers just didn’t add up.

HHS officials have been studying the proposal for months but have also been trying to find an answer to the problem that without a program like this, many seniors would have to wipe out their life savings and leave their homes and loved ones, in order to get the medical services they need.

Republicans see the Obama administration’s backing down on long term care as fueling their push to repeal or at least defund the health law before its major provisions – including exchanges to help people purchase coverage and an expansion of Medicaid – go into effect in 2014. Senior advocates expressed disappointment with the administration’s decision and urged them to look for ways to make the program viable.

Drug Price Gouging

President Obama is pushing federal regulators to do more to address critical shortages of crucial medicines. Obama directed federal regulators to gather information from drugmakers about potential shortages so the government can respond before patients’ lives are threatened and to help prosecutors head off price gouging.

Congress has been deadlocked over how to deal with the problem, and not getting anything accomplished, so the president recently signed an executive order directing the Food and Drug Administration to push drug companies to more quickly report shortages to federal regulators as an early warning that, advocates argue, could help mitigate shortages. Some Republicans criticized Obama’s action as too little too late. The Republican National Committee said Obama ignored “years of headlines warning about drug shortages,” and “finally decided to look like he’s doing something for political expediency.”

The American Society of Health System Pharmacists, a trade group, reported that more than half of hospitals and medical centers in the U.S. last year reported shortages that compromised patient care.

While the administration acknowledged that the executive order doesn’t give the FDA any new authority, the order urges the FDA to expedite reviews of new manufacturing facilities and directs the FDA to work with the Justice Department to focus its investigations of price gouging in the pharmaceuticals market.

For months, doctors, patients and others have been complaining about the unavailability of key drugs to treat cancer, to control infections and even to provide basic electrolytes to patients who need intravenous feeding. In 2010, the FDA reported there were 211 drug shortages. This year, federal regulators have seen a steady surge in reported shortfalls.

As of mid-October, the FDA had identified shortages of 82 medicines, based on voluntary self-reporting by manufacturers. But a national expert at the University of Utah who tracks national drug shortages told National Public Radio, (NPR), that the real number is 213, with three months left to go in the year.

Some shortages have come because of manufacturing problems while others have been caused by drugmakers’ decisions to stop making some products or by more demand for a product than there is a supply.

Acknowledging that the FDA “can’t fix the capacity issue,” Health and Human Services Secretary Kathleen Sebelius, said the administration would use its authority to require drugmakers to regularly report when certain medications are discontinued and when production disruptions might create shortages.

Supreme Court Takes Health Case, But Gives Itself a Way Out

The Supreme Court has agreed to hear challenges to President Barack Obama’s health care reform law, but it doesn’t mean they will decide the case in advance of the 2012 fall election.

In accepting the challenge to the law, the court said it would devote an hour of the oral arguments to the effect of the Anti-Injunction Act, a law that, in the view of one lower court, could prohibit a ruling on the individual mandate until the mandate goes into effect in 2014.

Without a victim, a lower court ruled, the Supreme Court could postpone a decision on the individual mandate until 2014. But it is unlikely that the court would take that option. It is more likely to rule in June at the end of its 2012 term.

The Court agreed to hear a lawsuit brought by 26 states and the National Federation of Independent Business that says Congress exceeded its power by requiring most Americans to buy health insurance starting in 2014.

The Justices will hear two hours of argument on whether the law’s requirement to buy insurance is constitutional. Another 90 minutes will be used to discuss which pieces of the law should be struck down if the mandate falls. The states and the NFIB want the entire law killed, but the federal government argues that only two insurance reforms would have to go if the individual mandate is found to violate the Commerce Clause.

Another hour will be used to discuss the Anti-Injunction Act, which could put off the entire health care law until 2014. The law says consumers cannot challenge a tax law until they have to pay for it. If the court were to say the individual mandate is a tax, the court could delay all the pending lawsuits until consumers pay the tax penalty on their 2015 tax returns. The remaining time will let the High Court also review the law’s Medicaid expansion, which the state’s claim is an unlawful coercion by the federal government since they must expand the joint state-federal program, or drop out completely.

 

Also contributing to this article were Politico, Kaiser Health News, NPR, Bloomberg News and the LA Times.

Alan Schlein has been covering the national Washington beat for Senior Wire News Service for over two decades.

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