Happy Valentine’s Day! Those chocolate hearts you are buying your sweetheart are more expensive than they need to be because of the federal sugar program. According to the American Enterprise Institute, the sugar program costs U.S. consumers and businesses an upwards of $4 billion per year in higher prices. The Soviet-style program has forced many candy manufacturers to move facilities and jobs offshore to avoid these costs. Through a system of onerous tariffs and quotas, the U.S. keeps inexpensive foreign sugar imports out of the country. Meanwhile, price targets continue to ensure that sugar producers will be bailed out by U.S. taxpayers if prices fall below the “right” level deemed acceptable by the United States Department of Agriculture. As a result, higher prices for millions of Americans translate into gains for a handful of large, wealthy and politically connected sugar providers. Congress should show consumers some love this Valentine’s Day and ditch the sour sugar program.
Surprise Billing – A Tale of Two Committees
With apologies to Charles Dickens, it was the best of times ideas it was the worst of times ideas (to fix surprise billing). House Speaker Nancy Pelosi (D-Calif.) announced that she wants to pass a healthcare bill by May 22. As we saw with Obamacare, though, there are many ways to mess up healthcare. Plenty of misguided proposals would make prescription drugs less available and healthcare more complicated and expensive. On issue in particular that the Taxpayers Protection Alliance (TPA) has been working on, surprise billing, is receiving a lot of recent attention on Capitol Hill. We are urging Congress to find a solution to surprise medical billing that protects patients and taxpayers. Two House committees voted this week and only one had a good solution.
House Ways and Means Committee
On Wednesday (February 12) the House Ways and Means Committee passed surprise billing legislation that rejects rate-setting and endorses arbitration. This is a major win for patients and taxpayers. It also shows that bipartisan politics is not dead, because the legislation was supported by House Ways and Means Committee Chairman Richard Neal (D-Mass.) and House Ways and Means ranking member Kevin Brady (R-Texas). We are glad to see that they rejected rate-setting which would make the situation worse and amount to a huge handout to insurance companies. Instead, the committee has chosen to back the arbitration approach which has been a resounding success in New York.
In 2015, the state of New York paved the way for an approach called independent dispute resolution (IDR), or “arbitration,” in which patients only need to pay their in-network insurance rates for an emergency procedure. The “surprise bills” are taken out of the hands of patients and left to doctors and insurers, who must then submit competing claims to an online portal where examiners could then decide which claim is the reasonable one. According to a 2018 study by Yale University researchers, “the New York law reduced out-of-network billing by 34 percent and lowered in-network emergency physician payments by 9 percent.” According to the evidence, physicians and insurers clearly feel pressure to come to the negotiating table even before the arbitration process begins. A 2019 Georgetown University Health Policy Institute report found that “insurers and physicians appear to be making ‘a real concerted effort’ to work out their payment disputes before filing with IDR.”
House Education and Labor Committee
On Tuesday (February 11) the House Education and Labor Committee passed H.R. 5800 which would institute rate-setting as a “fix” to surprise medical bills. There were some valiant bipartisan efforts by Reps. Phil Roe (R-Tenn.), Donna Shalala (D-Fla.), and Joe Morelle (D-N.Y.) to try to stop legislation from including rate-setting.
Rate-setting was passed in California and it has been a disaster. Assembly Bill 72, which kicked in on July 1, 2017, requires that physicians accept the average insurance rate for services provided to patients (or 125 percent of the Medicare rate), even when such arbitrarily defined rates are far lower than the costs of the physician’s time. Two and a half years after the bill’s enactment, the results are in: doctors’ statewide pay was slashed pretty much overnight, resulting in small practices struggling to keep their heads above water. According to a 2019 American Journal of Managed Care study by USC-Brookings Schaeffer Initiative scholar Dr. Erin Duffy, doctors and hospitals increasingly cite consolidation as a growing problem in response to the 2017 law. Strength in numbers is seen as a necessary xxxxxx against pay declines and the decreased willingness by insurers to negotiate with physicians. Some doctors interviewed by Dr. Duffy expressed concerns with recruiting high-caliber employees, and even contemplated practicing healthcare in another state. Unsurprisingly, consolidation isn’t popular among patients who have relied on their local doctor’s offices for decades. According to data from the California Department of Managed Health Care, care access complaints have skyrocketed from 415 in 2016 to 614 in 2018, an increase of nearly 50 percent. Clearly, government price-fixing is not the way to go. Lawmakers regardless of party should embrace proven, market-based methods to end the scourge of surprise medical billing.
The President’s Budget – Where are the Spending Cuts?
Though the $4.8 trillion proposed budget for fiscal year (FY) 2021 envisions $4.4 trillion in reduced spending through 2030, the administration only calls for decreases in the growth of overall spending instead of genuine budget cuts.
The FY 2021 budget is very frustrating because the Trump administration has repeatedly promised the American people that President Trump would reduce the size and scope of government. He sort of delivered with cutting regulations, but sky-high budgets over the past three years have shown that spending is a bipartisan problem and few elected officials – including President Trump – are willing and able to deliver on good government and spending reform. The President’s Budget for FY 2021 is just the latest example of a government unwilling to acknowledge the need for significant, across-the-board cuts to wasteful spending in Washington, D.C.
The U.S. may be in peacetime, but that hasn’t stopped the Pentagon and Congress from requesting an ever-increasing amount of taxpayer dollars. FY 2020’s Defense spending total of $738 billion already far exceeds the highest Defense budget (adjusting for inflation) enacted during the Reagan years at the height of the Cold War. Yet, the President wants the Pentagon to have even greater access to hard-earned taxpayer dollars, proposing an astounding $407 billion (more than $40 billion a year) in increased spending through 2030. While a well-funded military is critical to America’s future, growing budgets reflect runaway earmark spending on supplies the Pentagon didn’t even ask for. Congress spent more than $16 billion last year on 785 earmarks, yet the President wants to add even more fuel to the fire with continued military spending increases. The President’s Budget is not without its bright spots, such as curbing runaway farm subsidies to wealthy agribusinesses and stemming the tide of improper payments. But President Trump must focus on the big picture if he wants to bring real spending reform to Washington, D.C. The American people simply cannot afford trillion-dollar deficits.
Blogs:
Monday: TPA and the Coalition Against Rate-Setting Launch Ad Campaign Thanking Lawmakers for Rejecting Rate-Setting
Monday: President Trump’s FY 2021 Budget: Good, Bad, and ‘Sad!’ An Illustrated Guide
Wednesday: Watchdog Praises House Ways & Means For Passing Bill to End Surprise Billing
Friday: Roses Are Red, Violets Are Blue, The Sugar Program Is Bad for You
Media:
February 9, 2020: OZY quoted TPA in their story, “The Road Could Be a Solar Charger Soon.”
February 10, 2020: Politico mentioned TPA in their story, “Why hopes are fading for big bipartisan deals on Capitol Hill.”
February 10, 2020: The Daily Journal (Kankakee, Ill) ran TPA’s op-ed, “It's time for the Postal Service to grow up.”
February 10, 2020: American Greatness mentioned TPA in their story, “Trump’s Budget Gives NASA a Big Turbo Boost.”
February 11, 2020: Townhall ran TPA’s op-ed, “New Hampshire Voters Must Reject ‘Democratic Socialism’ in Tonight’s Primary.”
February 12, 2020: The Washington Examiner ran TPA’s op-ed, “Multiemployer pensions take center stage in 2020.”
February 12, 2020: TPA policy director Ross Marchand appeared on the “Conservative Commandos Radio Show” to discuss the President’s Budget.
February 12, 2020: TPA policy director Ross Marchand appeared on “The Jerris Lee Show” (KGED 1680 AM; Fresno, CA) to discuss the President’s Budget.
February 13, 2020: The Center Square ran TPA’s op-ed, “Changes in law to help low-income areas could boost stadium tax breaks.”
February 13, 2020: True North Reports (Vermont) ran TPA’s op-ed, “Vermont town considers building government network to protect net neutrality.”
February 13, 2020: WBFF (Fox, Baltimore) interviewed me about rules and regulations for lemonade stands in Maryland.
February 13, 2020: The Washington Post mentioned TPA in their article, “The Health 202: Democratic primary voters want health care fixed. But Congress is tangled up in political fights.”
February 14, 2020: Townhall ran TPA's op-ed, "Roses Are Red, Violets Are Blue, The Sugar Program Is Bad for You."
February 14, 2020: RealClearPublicAffairs ran TPA's op-ed, "The High Costs of Vaping Taxes."
Have a great weekend, and as always, thanks for your continued support.
Best,
David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org
