Week Ending February 17, 2017
House GOP Leaders Lay Out Plans to Repeal Affordable Care Act (ACA) and Cut Medicaid
On Thursday, House GOP leaders released an outline of their plan to repeal the Affordable Care Act (ACA) and restructure and cut Medicaid. While many questions were left unresolved, this plan would:
- Cause millions to lose their health care coverage;
- Tax workers on the health care benefits they receive from their employers; and
- Undermine state finances with substantial cuts to state Medicaid funding.
ACA Repeal: The GOP plan would eliminate subsidies that millions of low- and middle-income families now receive to purchase comprehensive health coverage through the ACA health exchanges when coverage is not available through their employer. Instead, eligible families would receive a lesser tax credit that would not be sufficient to purchase comprehensive coverage. Insurers would no longer be required to meet quality standards such as limits on deductibles, no-copays for preventive care and no annual and lifetime limits on benefits. Insurers would also be allowed to charge those age 55 and older higher premiums than allowed under the ACA.
The plan would drive up costs for the average family by requiring workers to pay income and payroll taxes on part of the value of insurance provided by their employer. The plan eliminates the requirement that large employers provide coverage to their workers and includes other features that would lead many employers to drop coverage altogether.
The enhanced federal funding that allowed states to expand their Medicaid programs would be phased out. With this dramatic cut in funding, states would likely reduce coverage for most of the 11 million poor, working adults who gained insurance in the 32 states that expanded their Medicaid programs.
Medicaid Restructuring: In addition to eliminating the Medicaid expansion, the plan would restructure the current Medicaid program and cap federal funding provided to states. It appears that the funding reduction in the first ten years would be $1 trillion. Such an enormous cut would force states to reduce the number of poor people who receive Medicaid coverage. Moreover, because state Medicaid expenditures for home care and nursing home services are substantial, many states would likely cut these benefits. As a result, many older Americans and people with disabilities could lose these services. There would be job loss among AFSCME members who provide these and other health care services. States would also be forced to cut other public services, such as education, transportation and law enforcement, in order to make up for lost Medicaid funds.
House leaders say that they plan to flesh out the details of their plan and have draft legislation ready after next week’s congressional recess. But, it appears that there is still no consensus among House Republicans on many of the details. So it is not clear that the House will be able to move forward any time soon.
President Trump’s Nominee for Secretary of Labor Withdraws and New Appointee Named
Andy Puzder, head of the fast-food conglomerate CKE that includes Carl’s Jr. and Hardee’s, withdrew his name from consideration as Labor Secretary this week. Puzder has been an opponent of raising the minimum wage, expanding overtime protections and mandating paid sick leave and health care benefits for workers. His views made clear that he was not the right pick to lead the agency responsible for protecting workers. President Saunders stated: “At every turn, Andy Puzder has shown contempt for people who get up early every morning and work hard to support their families.”
Less than 24 hours after Puzder withdrew, President Trump announced the nomination of Alexander Acosta, Dean of the Florida International University College of Law in Miami. AFSCME will be assessing his record.
Mulvaney to Direct Budget Office; Budget Timeline Update
In a near party-line vote, Rep. Mick Mulvaney (R-SC) was approved by the Senate to direct the Office of Management and Budget (OMB), the federal agency that crafts the President's budget and oversees all federal spending and regulations. Sen. John McCain (R-AZ) was the lone crossover vote and expressed deep concerns regarding Rep. Mulvaney's support for cuts in defense spending. In the House, Rep. Mulvaney has supported block granting Medicaid and turning Medicare into a voucher. He has called for changes to Social Security, referring to it as "a Ponzi scheme." Mulvaney has been part of a group in the House that has tried to impose deeper cuts in spending by shutting down the government.
Now that Mulvaney has been approved, it is likely that the pace of budget action will pick up. By April 28 Congress must either extend the current “continuing resolution” that has maintained level spending since the fiscal year began, or enact a final spending plan for the rest of the fiscal year. Then, the Congress must begin work on next year’s budget, but the House is expected to first conclude action on the Affordable Care Act before turning to next year’s budget.
It is expected that the Trump administration will push for very deep cuts of more than $10 trillion over 10 years. These cuts far exceed any previously proposed and would seriously disrupt state and local budgets. Further budgetary uncertainty and delays will make it difficult for state and local governments to finalize their own budgets, since approximately one-third of state funds come from federal grants. AFSCME will continue to oppose any efforts to harm the safety net and to make budget cuts that further harm state and local services.
Senate Panel Hears of Need to Improve Staffing in Behavioral Health Clinics
The Senate panel with jurisdiction over federal spending for mental health and substance abuse heard from witnesses who cautioned about cuts in Medicaid and advocated for additional federal funds to help address behavioral health provider shortages. Nationwide, roughly 60% of mental health services are paid for by Medicaid, and people with mental health disorders usually have additional chronic conditions. Those individuals account for about half of the overall Medicaid spending. One out of every three individuals enrolled in the Medicaid expansion lives with mental health or substance abuse conditions. AFSCME submitted a written statement from an Oregon Council 75 member who urged increased funding for behavioral services.
Federal Workers Paid Parental Leave Act Reintroduced in Congress
The Federal Employees Paid Parental Leave Act (FEPPLA) was reintroduced in Congress. It would provide six-weeks of paid parental leave for federal government employees to care for their newborn, newly adopted, or new foster children.
Providing paid parental leave enhances recruitment and retention of new employees; dramatically improves morale; and reduces personnel costs related to turnover, hiring, and training. Enacting this bill would set an important precedent for other public and private employers to adopt similar policies. The bipartisan House bill (H.R. 1022) was introduced by Reps. Carolyn Maloney (D-NY) and Barbara Comstock (R-VA). Sen. Brian Schatz (D-HI) introduced the Senate bill (S. 362). Rep. Maloney said, “The United States is the only industrialized nation that doesn’t provide paid parental leave for its entire workforce… Paid family leave makes economic sense, it makes common sense, and it makes sense for American families.”
AFSCME Council 26 member and federal employee Teresa Oberti spoke at Rep. Maloney’s press conference announcing the introduction of this bill. To view AFSCME’s letter of support for this bill, go to: http://afscme.org/feppla
DOL Retirement Savings Regulations Setback
The House passed two Congressional Review Act (CRA) resolutions of disapproval which block two Labor Department regulations that would allow states and cities to create Individual Retirement Account (IRAs) for low-income workers if their employer doesn't offer retirement savings plans. The rules were issued under President Obama and are now part of a wide ranging effort in Congress to rollback many of the Obama administration’s regulatory actions. The CRA allows the House and Senate to disapprove any administration rules issued on or after June 13, 2016 under an expedited procedure.
Approximately 55 million Americans work for employers that do not offer a retirement savings plan. The DOL regulations make certain changes in federal rules to facilitate expanded retirement savings. One DOL rule that was issued in August clarified circumstances under which state-created IRA plans would be exempt from the Employee Retirement Income Security Act. The rule for county or city IRA plans was issued in December. So far, seven states; (CA, IL, CT, NJ, MD, OR, and WA) have taken steps to create auto-IRAs for these uncovered workers. Employees can opt out of the retirement savings plans and employers are not required to contribute to these accounts. The U.S. Chamber of Commerce and several financial firms oppose these government-run plans. Both resolutions passed the House by similar margins, one by a vote of 231 to 193, and the other by a vote of 234 to 191. Only one Democrat, Rep. Henry Cuellar (TX), voted for the disapproval resolutions. The resolutions of disapproval which AFSCME opposed will move next to the Senate.
Centers for Medicare and Medicaid Services Administrator Nominee Testifies
The Senate Finance Committee held a hearing on the Trump administration’s nominee to head the Centers for Medicare and Medicaid Services (CMS), Seema Verma. Verma designed Indiana’s Medicaid expansion program, which utilizes a high deductible health plan paired with a health savings account. Medicaid beneficiaries under the plan must make monthly contributions to the health savings account, equal to 2% of income. Ms. Verma argued that Medicaid was not working and talked of many options from block grants to per capita caps as a way to allow states to innovate. During questioning about the Affordable Care Act, Verma would not commit to supporting core patient protections, now required under the health care law. While Verma did indicate some unease with Medicare vouchers she would not affirm support for closing the Medicare Part D donut hole, nor would she state a position on raising the age of eligibility for Medicare. The Senate Finance Committee could vote on her nomination within two weeks.
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