Priorities shift in budget debate

Select categories may see payment increases

Most physicians won’t see an overall Medicare reimbursement increase in 1998, but they are likely to find payment increases in some surprising, politically popular areas: children’s services, preventive care, and women’s services.

Amid the political fanfare, however, two big questions get to heart of the matter: What gets cut? What gets increased? In short, the old will give way to the young, and institutional care (home health and hospitals) will sustain the bulk of cuts while physicians will remain less scathed by the budget knife. This will occur, that is, if President Clinton’s budget survives relatively intact.

Beyond those two questions are issues of how the marketplace will respond if required to extend coverage in certain ways, says Vickie S. Jackson, practice manager of Southern Orange County Pediatrics, a practice that has eight pediatricians and four nurse practitioners in three locations in the Lake Forest, CA, metropolitan area. Jackson also is immediate past president of the pediatric assembly for the Medical Group Management Association in Englewood, CO.

"In California, we have mandatory insurance for children through employer groups," Jackson says. "The law requires insurers to pay a well-child benefit. But insurance companies got around that. They provide it, but you [employers or employees] have to pay for it."

Also, many insurers offer the required well-child care, but they exempt certain services, such as ear ache for the first two years. Overall, that’s Jackson’s biggest fear — that the feds will require coverage, but that lack of financial commitment and numerous loopholes would lessen its effectiveness.

Here are the hot topics for possible payment expansion in 1998:

Health care for five million "gap" children. Experts estimate that 10 million children in the U.S. have no insurance coverage. Clinton’s five-year plan would throw a safety net over half that number — a group called "gap children," because they fall through the gaps of new Medicaid policies. Here’s how he would toss the net:

— Children would be allowed to stay on Medicaid rolls for a year at a time, rather than having to re-certify every six months, as they are now required to do. With this revision, one million more children would have coverage.

— An outreach program would make a proactive effort to bring in children who now qualify under existing Medicaid regulations but who are not enrolled. Clinton estimates three million children could be insured by this effort.

— A $750 million allocation to the states to enable them to work with insurers, health providers, businesses, and schools would expand coverage to another one million children.

— Implementation of a provision in the new Medicaid law that reaches out to adolescents ages 13 through 18 would expand the coverage they already receive — another one million.

Medicaid revision isn’t nearly enough, argues Jackson. Her practice, as a rule, does not see Medicaid patients, except in special situations. "Medi-Cal [California’s Medicaid program] pays 35% of our fees," she says. "We can’t stay in business that way." Even when the state shifted toward Medicaid HMOs, the financial situation did not improve, she says.

Cigarette tax, tax credit proposed

Other lawmakers have proposals, as well. Here are two of them:

— Health care vouchers funded by cigarette tax. Sen. Edward Kennedy (D-MA) is sponsoring a bill that would provide vouchers to help cover children in families with incomes from 185% to 300% of poverty. Kennedy’s bill would levy a cigarette tax to fund the coverage. In two recent public opinion polls conducted by the American Cancer Society in Atlanta, 73% of respondents supported raising federal cigarette taxes for children’s health care, and 68% favored the tax for educating youth about tobacco use.

— Insurance provided by earmarked tax credit. Senate Minority Leader Tom Daschle (D-SD) is sponsoring a bill that would offer refundable tax credits to help families purchase private insurance coverage for children. In Daschle’s proposal, a tax credit would provide 90% of a children’s insurance premium for families with incomes up to 200% of the poverty level.

The credit would then be pro-rated as a family’s earnings increase. While Clinton touted insurance for children during his state of the union address, the American Academy of Pediatrics (AAP) in Chicago has worked in the trenches for the past several years, trying to put the issue in the spotlight.

Experts hammer out cost estimates

In July 1996, AAP officials urged lawmakers to require preventive health care services for all children as a first step, and a universal "Kids-Only" law in the future. Now they’re seeing some sign of progress.

The cost of providing preventive health care to children would be $8.01 per month per family, says AAP’s David Tayloe Jr., MD. Beyond that, insurance for all children would reduce per-child expenditures by 21.7% compared with having no source of regular health care, he says. He bases his numbers on an AAP-sponsored study on insurance cost prepared by the Actuarial Research Corporation.

Prevention. While prevention is spotlighted as key to cost savings, reimbursement for preventive measures often falls short. Clinton is offering this laundry list of preventive care services that he says Medicare should cover:

— annual mammograms for women, with a waiver of all cost-sharing requirements for this benefit so more older women will seek breast screening services;

— pneumonia vaccines;

— colorectal screening;

— diabetes screening.

More preventive care services for women also may well be on the way, given undeniable political and clinical trends.

A medical ethics expert recently spotlighted his concerns that many insurance payment policies governing women’s health care fall short of fairness. This comes on the heels of a 1996 study arguing that Medicare payments for women-only services are lower than payments for comparable men-only and non-gender-related services.1 (See related story on gender issues in Medicare payment, Physician’s Payment Update, February 1997, p. 22.)

Even though women may require more health care over a longer average life span, too many women discover that insurance is out of their reach, says Steven Miles, director of medical ethics at the University of Minnesota Center of Biomedical Ethics in Minneapolis.

Specific health needs of women — pediatric care, mammograms, gynecologic procedures — often are not covered by health plans, Miles says.

But at its most basic level, many private insurers still don’t cover fundamental women’s services. Miles says that based on his research, 25% of fee-for-service insurers fail to cover Pap smears, and another 25% fail to cover mammograms. HMOs tend to provide these services, but only 25% to 27% of the population today belongs to an HMO.


1. Miles S, Parker K. Men, women, and health insurance. N Engl J Med 1997; 336(3):218-221.