After many tense hours of negotiation, the final health care reconciliation bill before Congress has lots for the residents of the U.S. Virgin Islands but has shortcomings too, Delegate Donna Christensen said Friday. When the final bill was released Thursday, the big news was that it will fully include the U.S. Virgin Islands and other insular territories. Speaking to reporters by telephone Friday, Christensen added depth and details about what the bill provides for this territory and what it does not.
The original House bill passed last year lifted the cap on Medicaid funding to the territories, but the Senate version only offered a one-time 30 percent increase. To avoid a Republican filibuster and allow a simple majority vote, the House must pass a reconciliation bill that fairly closely follows the Senate version.
Christensen was in two group meetings with Obama after the Senate bill passed and before the president submitted his reconciliation proposal, and both times she and her colleagues pushed hard for the territories, she said Friday. Yet when Obama offered his suggested route to reconciling the House and Senate bills this February, his proposal was very close to the Senate version, leaving open the possibility the final reform package would leave territorial citizens not only without the benefits of reform, but possibly worse off than before.
"Seeing the president’s proposal come down without (the Medicaid funding) I would say was the worst week of my 14 years in Congress," she said. But after numerous meetings over the past two weeks with the leadership in the House, Senate and with Obama, the territories are in the bill, though they are not getting as much as she would like, she said.
Several important protections start six months after the bill is passed, she said. Rescission, where insurance companies drop people for being sick, will be banned. By the same token, in six months there will no longer be lifetime or annual caps on coverage. And insurance companies will no longer be able to deny coverage to children based upon pre-existing conditions.
"Adults will be covered for pre-existing conditions starting in 2014, but children we wanted taken care of," she said. These changes will be a major benefit to children in the territory with conditions like sickle cell anemia, she said.
Also in six months, children of insured parents will be allowed to stay on their parents insurance up until the age of 26, so long as they do not have access to coverage from an employer. Starting in 2014, those under 26 can choose their parents’ plan regardless.
The bill has money to help with construction of community health centers, which will help get the Frederiksted Health Center renovated, she said. While the center has some funding for renovation, it does not have enough to complete the job, she said. So passage of the bill will help the clinic reopen its home office.
Starting in 2011, the Medicare "donut hole" will begin to close. Currently, after a Medicare beneficiary exceeds surpasses the prescription drug coverage limit, the Medicare beneficiary has to pay the entire cost of prescription drugs until reaching the catastrophic coverage threshold. That will close in stages. Also in 2011, there will be a new voluntary federal program to provide long-term care insurance and cash benefits to people with severe disabilities, Christensen said. Those who wish to can pay into the plan through payroll deductions for five or more years, then receive benefits if or when they become severely disabled. This will take the strain off some care now paid for by Medicaid, helping Medicaid funding go further, she said.
The Virgin Islands gets $431,227,000 in new Medicaid dollars over the next decade, Christensen said. Under the federal stimulus act passed last year, the territory got a temporary 30 percent Medicaid increase which expires in 2011, going back to a baseline of $14 million a year. If the healthcare reconciliation bill is passed by the House and Senate, 2011 Medicaid payments to the U.S.V.I. will increase to more than $24 million, then again in 2012 to $43 million. After that will be annual increases of about $3 million a year after that, up to nearly $60 million in 2019, she said. Currently, Medicaid in the territory kicks in at around $5,000 a year; far below the federal poverty level, she said. Even at that level, around 8,000 or so residents are on Medicaid. But the increased funding will allow a higher income level for eligibility, covering more residents, she said.
This very good news does have one bitter pill of bad news attached to it, however: To get the increased Medicaid funding, the territory will have to match it dollar for dollar. States match Medicaid funding based on a formula that takes average incomes into account, so wealthier states match dollar for dollar and less wealthy states match less. But the U.S.V.I. matches dollar for dollar despite low incomes and that will not change with this bill.
"There are a number of issues that cannot be dealt with under reconciliation," and this is one, Christensen said. "This is not the perfect bill; not for the territories or for anyone. We have all gotten some things and lost some from where we figured our ideal position should be. This is a very important and major first step but we do have things to work on."
Secretary of Health and Human Services Kathleen Sebelius has, however, pledged to work with the territories on this issue in the months ahead, Christensen said.
A major plank of the reform is the creation of health insurance exchanges where the uninsured can shop for policies.
"The details are not set up yet, but we will be able to participate in the exchange," Christensen said. When the health insurance exchange is set up, the bill allocates $1 billion to help subsidize premiums for those currently uninsured in the territories, she said.
While the increased Medicaid funding will cost the V.I. government millions of dollars to match, both the Medicaid funding and expanded insurance coverage through the insurance exchanges will save the government millions at the back end. Currently, the V.I. Government subsidizes both hospitals and the territory’s clinics, thus passing the uncompensated cost of care for the uninsured onto taxpayers. But through the insurance exchanges, nearly everyone in the territory will have coverage by 2019, she said. That, along with the Medicaid increases mean "uncompensated care absolutely will be reduced," she said.
According to the Congressional Budget Office, this reconciliation bill will result in 30 million more U.S. citizens becoming insured and will reduce the U.S. budget deficit by $138 billion between now and 2019. Savings should be much larger in the decade following — as much as $1.2 trillion. But CBO only gave tentative ranges for the second decade, qualified with the caveat that predictions so far in the future are extremely difficult to make with precision.
"Health and education are joined at the hip in this bill," Christensen said, and much of the savings ironically come not from health care but from education provisions in the reconciliation bill. Providing Pell Grants and student loans, directly, cutting out the profits to lenders, will save about $61 billion over the next decade, she said.
The bill’s text was placed online Thursday afternoon at the website for the House Rules Committee. Bills must be placed online 72 hours in advance of a vote and the House vote may occur sometime Sunday afternoon or possibly Monday. After that, the Senate takes up the same bill for a last up or down vote.
