February 2, 2006
Budget Reconciliation Passes House
Yesterday, the House passed the budget reconciliation bill (S. 1932) by a vote of 216-214. The bill will be sent to the president for his signature. It is estimated to reduce federal spending by $39 billion over five years.
To view the Congressional Budget Office score of S. 1932 click here.
February 3, 2006
Medicare Part D Drug Costs Drop
The Centers for Medicare and Medicaid Services (CMS) announced yesterday that drug costs for the new Medicare Part D program have dropped substantially. As a result, beneficiary premiums in 2006 will average approximately $25 monthly rather than $37. These cost reductions apparently reflect lower payments to pharmacies, but also some reductions in drug costs paid to producers.
The cost reductions are also expected to reduce the 2006 net cost to the federal government from an estimated $38.1 billion to $30.5 billion, and reduce the 10-year cost by $59 billion.
While this change could reduce the clawback that states could be required to pay in 2007 and beyond, it is not expected to have any impact on clawback liabilities for 2006 (see FFIS Issue Brief 05-45). CMS currently estimates that the 10-year clawback reductions from the reduced costs could total $37 billion.
CMS also announced that the initial 30-day Part D transitional period is being extended to 90 days. In addition, a template has been posted to the CMS web site for states that experienced out-of-pocket costs during the transition to start the process of applying for reimbursement. The template can be viewed at here.
The transition period is expected to have a different length in different states, depending on individual state experiences. For further information regarding this program, please refer to the Dear State Medicaid Director Letter.
Senate Clears Tax Reconciliation for Conference
Yesterday the Senate passed a tax reconciliation package that cuts taxes by $70 billion over five years (H.R. 4297). Once the House acts, probably next week, conferees will be appointed to resolve differences between the two bills. These include a House provision for a two-year extension of the 15% top tax rate on capital gains and dividend income and a Senate provision containing an alternative minimum tax "patch."
The Senate also extended several expiring tax provisions for two years (rather than one as contained in the original bill) to meet the new $70 billion level of the package.
CBO Scores Budget Reconciliation Bill The Congressional Budget Office (CBO) released a score of the budget reconciliation bill (S. 1932). The score is available here.
February 7, 2006
President's FY 2007 Budget Released
Yesterday, the administration released the president's $2.77 trillion fiscal year (FY) 2007 budget. For a summary of the budget's impact on major domestic grant programs click here.
February 8, 2006
States to Share Savings from Lower
Part D Drug Costs
FFIS has learned that HHS Secretary Leavitt has begun to inform states that the federal government does intend to share savings from lower Part D drug costs by reducing state clawbacks. Letters began going out on February 6, 2006, and are expected to continue on a state-by-state basis.
The per capita drug cost that forms the basis for each state's clawback amount assumes a 35.5% cost increase over 2003, the base year. The actual increase is 22.4%. Updated estimates will be provided in FFIS Issue Brief 06-06.
February 9, 2006
Clawback Estimates Released
The Centers for Medicare and Medicaid Services (CMS) have begun releasing estimates of actual clawback amounts. These can be found attached to the letter to the California Secretary of Health and Human Services available here . These data are similar to those estimated by FFIS in Issue Brief 06-05, which are hereby supplanted.
Deficit Reduction Act Signed
Yesterday, President Bush signed into law the Deficit Reduction Act of 2005. For more information on the act see Budget Brief 05-16.
February 10, 2006
OMB Releases Proposed Program Eliminations/Reductions
The Office of Management and Budget (OMB) released its listing of the 141 programs that are proposed for elimination or reduction in the president's fiscal year (FY) 2007 budget. The report can be found at here.
February 16, 2006
Lawsuit Seeks to Invalidate Budget Reconciliation Law
An
The issue arises as a result of an error by a Senate clerk that changed a provision of the bill that limits rentals of durable medical equipment other than oxygen equipment to 36 months instead of the 13 months that was in the measure passed by the Senate. The clerk later changed the number back to 13, but not until after the House voted to clear the bill.
February 17, 2006
President Requests Emergency Funds for Gulf Coast States
Yesterday, the president submitted a $19.8 billion emergency funding request
to support hurricane recovery activities along the
It was anticipated that LIHEAP funding would be part of this package. Even though it is not, efforts are expected on Capitol Hill to add it to the supplemental bill.