Karen Bass

The Impact of Federal Budget Cuts on Medicare, Medicaid, and Health Research - April 29, 2011

Karen Bass
April 29, 2011— UCLA Center for Health Policy Research, Los Angeles, California
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Good afternoon, everyone. It really is my pleasure to be here at UCLA. I think I try to come here at least once a year, and in the six years that I was in the state legislature I did represent UCLA and now in Congress, I represent that other school. But UCLA will definitely always be in my heart and the school knows it can call on me at any time. I especially want to thank Dr. Brown who is not only a colleague but a long-term friend. Usually when Dr. Brown, or Rick Brown as I know him, calls me and asks me to do something I'm very happy to do that.

What I would like to do in these minutes that I'm with you is, one, talk for a little bit about Congress right now, but then also leave enough time for a conversation because frankly I always prefer the conversation or dialog and hopefully the questions that you have, we can engage in a conversation about that.

I have been in Congress now for a total of four months. And a what a four months it's been. In the years that I served in the state legislature, the Democrats were in control, and so going to Congress where we had a huge change, a huge turnover, the largest freshman class in in recent history with over 90 new members of Congress and 87 of those members being Republican and 9 being Democrats and of the 87 Republicans with the whole wave that happened in November, a sizable number of them were elected by the Tea Party advocates ah in their district. And so just to describe the first three months, I think on the second day the leadership decided that we should begin each day by reading the Constitution. And so there were times when different parts of the Constitution were read and that's the way we began our day.

One of the first acts of the new Congress was to repeal the Affordable Care Act, and given that the Republicans are in charge, the repeal did move and it was passed out of the House, but of course we have two houses and it was defeated in the Senate. So although there was a lot of talk about the repeal of healthcare reform, I know people in this room know that that didn't take place. The problem that with that though is that it creates a tremendous about of confusion with the public and so people don't know—they hear it was repealed, they hear it was passed, they don't know if now their kids that are eligible to be on their healthcare until they're 26 are going be kicked off or what. So it creates a lot of confusion.

After healthcare, after that bill moved out of the house, the next crisis that we had to deal with was a continuing resolution of the budget. Now what that means is that in Congress, very different than that state, I would have kind of loved it if we could have done this in the state, but if you don't pass a budget you can pass what's called the continuing resolution which just means you keep spending the way you had been spending in the previous time you passed a budget. But this time the Republican majority decided to attach over 200 amendments to the continuing resolution, which would have led to really, really severe cuts that actually a Republican economic analysis said that if those cuts were to move forward it would have resulted in 700,000 jobs lost. And so if you look at the over 200 amendments that were put forward, I would say about 100 of them actually were voted on in the House, and I would say—these are estimates—20-30 percent of those amendments gutted healthcare reform, so the funding that was needed to move forward the Affordable Care Act would have essentially been gutted had these amendments passed in the Senate. I would say about another 30 percent of the amendments gutted the Environmental Protection Agency so would have deregulated a lot of the regulations that we have that keep our air and our water clean. And then a percentage of the amendments were directly targeted toward women, with the defunding of Planned Parenthood. As people know, Planned Parenthood, for a lot of women especially younger women and women who are low income, is really their sole source of healthcare.

What I'm describing then is an ideological agenda. I think it's very important to view what is going on in our country from an analytical perspective of an agenda that is being put forward that really if it were implemented would call for fundamental changes in our country. This describes a debate that's been going on in our country for years, and it gets played out, by the way, through the budget because a budget is really not just a collection of numbers but it's a statement of your values and your priorities, and so the way you can fight out an ideological agenda is through a budget.

And so I think the questions that are raised through the budget process is, what is the role of government? Is government...well, government is seen as the enemy. You know that. Government is the problem. What the solution should be should be to shrink the government. We need to get the government out of people's lives. If you look below the surface, though, in a way it's a double message because people who push this do believe in shrinking the government in certain areas, and in other areas they actually believe in using government resources and directing those resources toward the private sector.

At one point I was rather shocked late one night when I heard one member get up and she was talking about an amendment she was putting forward, and she was saying that we need to make these deep cuts and shrink the government so that we can turn the resources over the corporations that create jobs. I was like ooh my. Somebody didn't edit her talking points. It should have been couched a little bit.

But a lot of the antigovernment sentiment, and obviously I'm presenting my opinions here, but a lot of the talk about shrinking government in my opinion is really coded language and it's coded language which to shrink or to change or to dismantle the social contract that we've had in our country for so many decades, whether we're talking about Social Security, whether we're talking about Medicaid, or whether we're talking about Medicare. This really is a historical battle, and you can go back to when Social Security was being talked about in our country; it was being said that was going to end civilization. Every time there has been a major program like that, it's always been extremely controversial.

Let me go back a bit and talk about the Affordable Care Act. The United States was really the only industrialized country that lacked a comprehensive system of healthcare for its population. A few aspects of the Affordable Care Act, a lot of it focuses on prevention, so mothers and infants will benefit greatly from heath care reform, infant-children in the beginning with preexisting conditions can't be denied coverage. A lot of different aspects of health care reform whether it's the preexisting conditions for adults which comes in later, the preexisting conditions for children, which is in place now. Children who are 23 years old, can be carried on their parents a health insurance. A lot of those aspects of healthcare reform in now the budget, Paul Ryan who's the chair of the budget committee is actually talking about reversing those. So since they weren't able to outright repeal healthcare reform, another way at it is through the budget process to slow it down by either cutting the funding or eliminating provisions that required financial support.

The budget that is being put forward by Paul Ryan—how many people have heard of the budget chairman Paul Ryan by now? He's become well known. Wow. Everybody knows about him. I'm going tell him he's becoming famous when I see him next week. I'm on his committee. Everybody's here heard of him. What he's calling for essentially, if the act was repealed we would be eliminating subsidies for low and middle income Americans, which guarantees that uninsured rates will remain high because again part of healthcare reform was providing subsidies because it won't be affordable without the subsidies. The standard health benefits that would be offered in the exchanges will guarantee that the individual and small group insurance markets will remain fragmented, excessively expensive and dominated by high-deductible policies that shift excessive financial risk onto those who purchased it. If we did repeal it then I already talked about the adult children that would be reversed, it would be prohibiting health plans from imposing lifetime dollar limits on benefits, so that's a part of healthcare, so if that gets repealed then we can go back to the system as it was which means if you become too expensive for your health policy then they just cancel it. And the other thing that the ACA did, the Affordable Care Act, was begin to close the doughnut hole that Medicare prescription drug policy that was put in place several years ago actually resulted in.

If it was repealed, it would reverse a lot of the protections that would be implemented in 2014, so some of what I talked about is implemented now, but in 2014 this would also happen if we were to reverse it: prohibiting health plans from refusing coverage for adults because of preexisting conditions, limiting the individual and family out-of-pocket spending, and prohibiting health plans from charging higher premiums for individuals with less-than-perfect health status. If they're not going to eliminate you because you have a preexisting condition, they can charge you a higher rate if they feel that your health status is not actually perfect.

Just a little side note: in California, we're lucky because we have an attorney general and an insurance commissioner that are going to do everything they can to make sure that we can implement healthcare reform. With the election of Kamala Harris and Dave Jones, as the insurance commissioner we do have two advocates, so we're very fortunate that that actually went that way.

The Affordable Care Acts emphasizes preventative care including prenatal visits, which are covered under the bill. This is significantly important for a lot of populations, specifically the African-American population that has an infant mortality rate where black babies die three times as frequently as white babies.

In Ryan's plan now, what he's calling for, he doesn't want to have any funding for the National Healthcare Workforce Commission. A part of the Affordable Care Act called for a commission that would look at the workforce. One of the things I think actually that Democrats fell behind on in the whole debate around healthcare reform was the jobs that it was going to create. I worked in healthcare. It's been 20 years since I've been in clinical medicine but I know when I was directly involved in clinical medicine we were short staffed 20 years ago. The idea that we would expand coverage to 31 million people means that part of the workforce is really going to grow, and so this commission was needed to prepare for that. Again the way Ryan and the Republicans are trying to get at healthcare, since they can't repeal it, is by doing things like cutting the funding for the workforce commission.

I happen to believe that the number one issue in our country really is jobs. We are still suffering from very high unemployment. The unemployment rate in California is still at about 12 percent. That's extremely high unemployment, and so here are jobs and here is an area of our economy that is going to grow and I think that that's something that really needs to be talked about a lot. This is a solution toward the crisis. Granted, people need jobs today, but looking at it short-term and long-term, working in healthcare is one of the best jobs that you can get in the future.

A lot of controversy has started over Ryan's budget, and I would just encourage you to read the document. He's written two documents. One is the Roadmap for America's Future, the other one is The Path to Prosperity. The Path to Prosperity is really an ideological document, but it's talking about his view of the budget. In that document, he calls for ending Medicare as we know it. He doesn't like the idea of calling it a voucher. In his first document, Roadmap for America's Future, he calls it a voucher but he I'm sure he polled and he was told that's not a good word so he's changed the word to premium support. Premium support is a voucher, and I don't quite understand the logic that he uses. I actually want to ask him when I get back or maybe I shouldn't cause he's had a real hard week. But the way he talks about it is as that we're not changing Medicare for anybody that's over 55. And I think that's supposed to be okay. So I'm glad he took care of my generation, but he threw most of you under the bus, including his own generation, because Ryan's just 41.

What that says is that if you're currently 55 or older, Medicare is not going to change for you, but if you're under 55 then we're going to change the system so that when you do hit 65 we will give you a check and tell you that you can go out and purchase your health insurance. If they were successful—because you mean you have to blow it out completely—if they were successful in repealing healthcare then what stops insurance companies from denying people with preexisting conditions? What if the insurance company says I'm not going to insure you? You are 65. You have five conditions, why would I insure you, or I'll take you for a while because you don't have any conditions, but oops you have cancer now so we'll cover you for a year and hope you get better. There isn't anything in there that has guarantees for that.

What he wants to do to Medicaid is he wants to take Medicaid and put it in the form of a block grant, and there are a lot of governors that are opposed to this. Seventeen governors signed up and said that they don't like the idea of a block grant. But a lot of governors have said they want a block grant, and just to describe this for a minute—a block grant means that from Washington they would give let's just say a $100 million. Okay. So they would give California $100 million and that's it. Right now, because it's an entitlement, the federal government gives California a certain amount of money, but that can also go up and down. For example, we're in the worst recession since the Great Depression or we're coming out of the worst recession since the Great Depression. When you're in a recession, your Medicaid numbers go up (or Medi-Cal, as it's called in California) because why? People lose their jobs. They lose their health insurance. They need to go on Medicaid. What about in the early 80s when HIV first appeared on the scene? You know what about the swine flu? You can think of any kind of epidemic. There are reasons why you need to have that flexibility and if you tie it in to a block grant then you don't have any flexibility for if circumstances change.

The other thing about Medicaid is that I think that people's reaction a lot of times is, well that's for poor people so I don't really need to worry about poor people, but a good percentage of Medicaid—I think it's about 40 percent—is used for long-term care. Medicare does not cover a nursing home and that's how you provide for somebody that's going to be in a nursing home. I'm not sure if they were thinking about this when they came up with this idea, but needless to say they're getting a tremendous pushback with the idea of one, turning Medicare into a voucher system and then number two, block-granting Medicaid.

When things like this happen, when these kind of proposals happen, I think it's always important to put them in a bigger context, to look at what the larger global issues are and then to figure out how we respond to it within that context.

If there is a great debate happening in our country over what is the role of government, I think that that then puts the responsibility on us to remind people who and what government is. The same people that want to shrink government, I mean the rhetoric is we want to shrink government to fit it in a bathtub, I think that's what Grover Norquist says, so that it fits in a bathtub. Well, what happens when your house catches on fire, or why you complain about the pothole that's in the street or you get mad because the Department of Motor Vehicles is not open on a Friday? There seems to be a need for public education around what government is, the role of government.

The other thing that Ryan has done, which is rather comical, is redefine corporate welfare. If you read his document, The Pathway to Prosperity, he defines corporate welfare as supporting companies that are trying to develop alternative energy, ending our dependence on oil. What we should in fact do is drill everywhere that it's possible to drill. If we have regulations that protect our environment or regulations that we have say like on the financial industry, well that's corporate welfare and what we need to do is role back those regulations. Again, I don't make this up. Trust me. I don't. Which is why I would encourage you to read his document.

It's also interesting that if you look back during the time when Reagan was president; he actually proposed making having the federal government have complete responsibility for Medicaid. Now the state has some responsibility as well. Reagan also raised taxes, but it's kind of funny because they've redefined Reagan. When I hear Reagan talked about I'm not sure who they're talking about because I remember him when he was governor and president, and they have completely rewritten history and raised him to the point of a deity. They only want to talk about part of what he did so we don't want to talk about the fact that he raised taxes. He raised taxes in the state of California. As a matter of fact, kind of funny, sometimes we would put forward a bill we would call it the Reagan bill, and it was trying to raise taxes in the state. My colleagues my colleagues across the aisle weren't very happy with us when we did that.

I want to wrap up now and just say a couple of things. Some of the cuts that are being proposed, not just by Ryan but also by the President, and cuts that are going to be painful. In general, the President, as well as the Democrats are calling for a balanced approach. Recognizing that cuts have to happen in this time period, but there needs to be a balance with revenue, and the quickest way to raise revenue is to end the Bush tax cuts. That's the quickest way. But you can't just cut your way out of a crisis.

As Dr. Brown mention, I wasn't excited when I was given the assignment of being on the budget committee, especially because I had been through the budget wars of Sacramento for six years, but I understood why they put me in that position because I have been through this fight before. Although I might be fighting in Washington, it's the same ideological fight that takes place in Sacramento every year. I think it's important that we view it in a bigger way that way so that it doesn't feel like we're always fighting these little squirmishes. It's actually fighting over the same issues, and I think it gives our responsibility of how we define what our values are and how we fight for those values.

But having said that, there are cuts that have the potential to impact UCLA. There are cuts to the National Institute of Health that are being called; obviously on the Republican side, they're calling for much deeper cuts then the Democrats are. There's cuts to federal agencies that are the source of research in medical education funding that could potentially impact UCLA, and then I mentioned that there's cuts to support the development of the healthcare workforce. These are tough times that we're going through and I think it's important again that even in the midst of all of these challenges, because people have asked me how I like being in DC especially given this environment, and I think that's always important to look for those opportunities. Obviously I'm partisan. I'm a Democrat. I'm giving you my opinion and my perspective, but having said that it's not a hostile environment. You have differences with people, but you look for opportunities to work together and you recognize that the Republicans might be in leadership now, but that's liable to change and these are colleagues that I hope to work with for many years to come. And so I don't view them as my enemies; I view them as people that I have a difference with.

Let me just end on what I think is a positive note. As Dr. Brown mentioned, one area that I do work in is foster care, and foster care happens to be one of those issues, it's interesting, but you can bring Democrats and Republicans together on, and so I hope to forge a relationship with my Republican colleagues on the issue of kids in the foster care system, and build those relationships toward a time when we might work together on other issues.

Speech taken from http://bass.house.gov/video/rep-karen-bass-speaking-ucla-center-health-policy-research