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Sebelius Grilled on CMS Budget; Focuses on Exchanges, Headstart

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U.S. Department of Health and Human Services Secretary Kathleen Sebelius testified before the Senate Finance Committee that oversees much of the agency’s FY 2013 budget, stressing the need to strengthen healthcare, especially for seniors and young children, while detractors complained about the increase in mandatory health care spending.

“Beginning in 2014, affordable insurance exchanges will provide improved access to insurance coverage for more than 20 million Americans,” Sebelius testified.

Ranking member Orrin Hatch, R-Utah, said in his testimony that over next 10 years total mandatory spending for Medicare and Medicaid will exceed $11 trillion.

Hatch had placards made highlighting critical editorial quotes on the President’s budget and the spending projection numbers. Hatch also brought up the contraception coverage and religious exemption rule and challenged Sebelius on whether she had met with any Catholic Bishops before issuing the final rule.

Sebelius says legislative proposals would save more than $360 billion, mostly from Medicaid and Medicare, over 10 years.

The proposed HHS budget totals $940.9 billion in outlays and proposes $76.7 billion in discretionary spending.

The Centers for Medicare & Medicaid Services (CMS) is requesting an additional $1 billion in discretionary funding to continue implementing the Affordable Care Act, including the exchanges, and to help keep up with the growth in Medicare.

“We are actively working with states across the country,” Sebelius in response to questions from the committee, noting states are in a variety of conditions of engagement.

“We have engaged 48 states…It is impossible to tell how many states will have a state based exchange, how many states will be a partnership [with the federal government and then go to state exchange after 2014.] We will begin to enroll people in the fall of 2013,” Sebelius says. As state legislatures take on enabling exchanges this year, the  number of states beyond the 28 that have already taken steps to set up exchanges already will firm up, according to the Secretary.

Sebelius stressed the need for IT spending for the exchanges, echoing the concerns of a committee member FY 2013 (which begins in October 2012) will be a critical year for building the infrastructure and initiating the many business operations critical to enabling exchanges to begin operating in January 2014, Sebelius said.

HHS has already spent $734.5 million in funding for exchange planning and establishment grants.

With regard to concerns from Republican senators that the state-based exchanges will chase employers out of the marketplace and costs would explode, Sebelius said that in Massachusetts, the only state that does have an exchange up and running, employers did not drop coverage and even more came into the marketplace. Moreover, she said, there was a higher rate of coverage than before.

Sebelius also focused in her oral testimony on reforms and quality improvement at HeadStart, noting that the program strengthens families and improves the path of children into and through adulthood, when requesting over $8 billion for HeadStart, an increase of $85 million over FY 2012.

Senators concerned about health care issues in their state and with the budget, including the bill for fraud fighting choices and personnel, autism coverage, under the essential health benefits coverage and state benchmarks, pediatric leukemia drug availability,  processed for coverage for Medicaid beneficiaries and payment to institutional providers.