Washington, D.C.--Congressman Eliot Engel (D-NY-17) looks forward to working with President Barack Obama’s Administration on his health insurance reform proposal in the coming weeks. While the blueprint reflects many of the positive aspects of the House and Senate-passed bills from 2009, there are still important details to be determined related to fair Medicaid financing for New York State, and Medicaid and Medicare safety net hospital funding.

“With the news out of California that Anthem Blue Cross is trying to levy 39 percent rate hikes on its customers, if it is not now blatantly apparent that this system needs changes, then I don’t know what it will take to convince skeptics of the urgency to pass health care legislation. The plan outlined by the President and hotly-debated by Congress for the last several months accomplishes most of the goals of health reform – primarily it covers virtually all Americans, and it protects those already covered from such hikes as Anthem has proposed. Without reform, health care for millions more Americans will become simply too expensive and the system will be unsustainable. The status quo is not an option, and I encourage my colleagues from both sides of the aisle to get behind the efforts and finally accomplish this for all Americans,” said Rep. Engel, a senior member of the House Energy and Commerce Committee’s Subcommittee on Health.

President Obama’s health compromise does the following:

• Makes insurance affordable – It provides the largest middle class tax cut for health care in American history. Tens of millions of American families and businesses would see premium reductions. Over 31 million Americans currently without coverage and overloading the nation’s emergency care system will have access to coverage;
• Makes health insurance competitive – By creating the health exchange market, tens of millions of Americans would enjoy the same health choices as Members of Congress and federal employees;
• Creates greater accountability – Added scrutiny of the health insurance industry will filter out abuses and denial of care, thus keeping premiums lower;
• Ends discrimination – No longer will Americans with pre-existing conditions find themselves without the ability to care for their illnesses;
• Stabilizes the federal budget – The plan reduces the deficit by $100 billion over the next 10 years, and about $1 trillion over the ensuing decade.

In addition, the proposal makes these badly-needed fixes to the Senate-passed bill which reflects several of the top priorities in the House-passed legislation:

• Eliminates the Nebraska Federal Matching Assistance Percentage Funding (FMAP) provision and provides significant additional Federal financing to all States for the expansion of Medicaid;
• Closes the Medicare prescription drug “donut hole” coverage gap;
• Strengthens provisions that makes insurance affordable for individuals and families;
• Strengthens the provisions to fight fraud, waste, and abuse in Medicare and Medicaid;
• Increases the threshold for the excise tax on the most expensive health plans from $23,000 for a family plan to $27,500 and starting it in 2018 for all plans;
• Improves insurance protections for consumers and creates a new Health Insurance Rate Authority to provide Federal assistance and oversight to combat similar cases such as California’s.

President Obama will be releasing more detail on this proposal as the summit on Thursday draws closer. New York is already facing a projected $40 billion budget shortfall over the next four years, and the Senate-passed bill would make too many cuts to New York. Rep. Engel has been a strong advocate for better provisions for states such as New York which as long been proactive in providing affordable coverage for its citizens. New York State deserves its fair share in whatever health reform bill is eventually passed.

“I led the New York delegation in asking Speaker Nancy Pelosi and Majority Leader Harry Reid in December to make changes to the Senate bill because of a disproportionate burden on New Yorkers and a weakened the health care delivery system in our state. I am hopeful that the final conference FMAP provisions will make this a better deal for New York, and I am pouring over the President’s plan to see if other necessary changes are in there as well,” added Rep. Engel. “I hope to see his proposal properly address the mitigation of cuts to the Disproportionate Share Hospital Funding (DSH), better affordability, fair Medicaid financing for New York, and measures included in the House bill, but not in the Senate version, such as my Early Treatment for HIV Act.”

Rep. Engel and the state delegation requested the mitigation of cuts to (DSH), which pays for uncompensated care and makes up the cost of underpayments in Medicaid. Despite expanding coverage to millions more Americans, there will still be uninsured Americans after these reforms, and hospitals will be forced to absorb those costs and provide those services. Until there is more certainty in coverage, it would be irresponsible to undermine New York's safety net health care system.

In addition, The New York State Insurance Department believes the House bill gives states stronger authority to negotiate savings for consumers entering the state health insurance exchange. Furthermore, for those with income levels between 133-250 percent of the poverty level, the House bill does a much better job in providing better health insurance premium support.? New York State also recently enacted $2.7 billion in mid-year funding cuts and other savings, including reductions against priority health care programs, and will need to cut further to fully close a projected deficit of over $40 billion over the next four years. New York State economic modeling projects that the Senate health reform bill, PPACA, could amount to significant increases in state Medicaid costs to New York, with serious implications to state and local budgets. This could result not only in a reduction in quality of care, but also substantial job losses at a time when New York cannot afford to lose more jobs.

“I remain optimistic that New York is in better shape under this plan, and that Thursday’s summit will provide an opportunity for Republicans to join with Democrats in providing Americans with better and more affordable health coverage today and for future generations. I urge Republicans to follow President Obama’s lead and post their suggestions immediately so the American people can compare and contrast before the summit. I look forward to finally enacting meaningful, and equitable health care reform in the coming weeks,” added Rep. Engel.