This excerpt taken from the AGP 10-K filed Feb 27, 2007.
Presidents 2008 Budget
The Presidents proposed budget for fiscal year 2008 includes many initiatives involving healthcare that will be top priorities in the coming year. SCHIP, a program created in 1997, is up for reauthorization this coming year. Leaders in Congress have said this will be their top health legislative item this year. The Presidents budget includes an additional $5 billion for SCHIP over the next five years. Many in Congress are advocating a major initiative to cover the estimated six million children who are uninsured and eligible for SCHIP or Medicaid, but are not currently enrolled. Legislative bills may request as much as an additional $60 billion for SCHIP over the next five years. It is likely that Congress will take some action on this issue during the coming year, although the specific Congressional actions cannot be predicted. The amount of funding, changes in eligibility, and other policy changes under the program could affect our business, positively or negatively, depending on the final legislation.
The Presidents budget also includes a number of regulatory and legislative initiatives for Medicaid. The Department of Health and Human Services released a proposed rule in January 2007 that would limit the use of Intergovernmental Transfer (IGT) payments by limiting payments to no more than the cost of services. This policy change, if implemented, could affect our business where IGTs are in use, either positively or negatively depending on state policy responses. The Presidents Budget also proposes changes to pricing of prescription drugs in Medicaid and how Medicare Part B and D premium payments are set and indexed. In addition, some in Congress are recommending changes to the rates of Medicare Advantage plans as a way to find budget savings. It is unclear which of these initiatives, if any, will succeed, but any of these initiatives could affect our business either, positively or negatively depending on the legislation.
Finally, to address the issue of the uninsured, the President recommends capping the tax benefits an individual may receive from employer sponsored health coverage, and also to allow people who purchase health insurance on the individual market to receive the same tax benefit that employees get who receive their coverage from their employer. It is expected that this issue, and other policy issues around the uninsured, will be debated throughout the year, though it is unlikely that major legislation will be passed on this topic this year.