Health Reform Update
August 4, 2009
Obama Advocates for Health Reform in Campaign-Style Appearances
President Obama on July 29 held town hall-style meetings in North
Carolina and Virginia to build support for the passage of health reform
legislation. He said that reform legislation will include consumer
protections for those who currently have insurance. These protections
will "make sure that those who have health insurance are treated fairly
and insurance companies are held accountable,” Obama said. Obama also
sought to portray the "personal element” of the reform effort, adding,
"We're the wealthiest country on Earth, and for us to be the only
developed nation where people cannot count on health care is shameful.”
Throughout the month of August, President Obama will travel around
the U.S., using the "bully pulpit” to reiterate his case, and to some
degree reassure an increasingly nervous public about the urgency of
comprehensive health reform.
View video of Obama's appearances here.
Small Businesses Become Focus of Health Reform
According to a July 25 report from the White House Council of Economic
Advisers, the implementation of health reform legislation would relieve
small businesses of disproportionately higher employee health insurance
costs. White House economists found that health reform would improve the
U.S. economy's overall performance, given the role small firms play in
job creation and innovation, and increase individuals' income at the
same time. President Obama, who discussed the study's findings in his
weekly radio address, said that slowing the growth rate of costs and
expanding coverage will increase living standards, encourage economic
growth, relive the budget deficit, and improve labor market efficiency. CEA
Chair Christina Romer said the report is designed to provide facts that
refute false claims that health reform would hurt small businesses.
Read the Council's report here.
In response to the Council's report, the National Federation of
Independent Businesses and U.S. Chamber of Commerce said that the House
health reform bill will not lower health care costs for small
businesses. The organizations said the inclusion of an employer mandate
to provide health coverage, increased payroll taxes and the
government-run insurance plan would harm small businesses and lead to
increased unemployment, decreased wages and higher health insurance
Read the U.S. Chamber's letter to Congress and NFIB's critique of the House bill.
Deal Clears Way for Committee Approval of Health Reform Bill Prior to Recess
Liberal and moderate House Democrats came to an agreement on July 30 on
amendments that allowed the Energy and Commerce Committee to approve its
health reform legislation on the next day. The final vote was 31-28.
Five Democrats joined all Republicans in voting against the bill.
The agreement, which paved the way for the reform bill (H.R. 3200)
to be cleared by the panel before House Members left Washington for the
month-long August recess, added a package of amendments from committee
liberals to the agreement Democratic leaders had made earlier in the
week with the moderate Blue Dog Democrats. The so-called "unity
amendments” would allow the government-run plan included in the bill to
use a drug formulary to control prices; expand the Medicare accountable
care organization pilot program to the Medicaid program; require the
Centers for Medicare and Medicaid Services to simplify administrative
procedures; permit the Medicare program to negotiate Part D drug prices;
and restrict health plans participating in the exchange (including the
public plan) from increasing premiums above a certain threshold without
permission from the federal government.
All savings generated by the amendments will be used to make
premiums more affordable for lower-income individuals who obtain their
coverage through the insurance exchange. These premium reductions would
offset the reductions in premium subsidies included in the original Blue
Dog compromise. The committee approved the "unity amendments” by
largely party-line votes.
Read the Committee's press release following the bill's approval here.
Part of the agreement with several moderate Blue Dog Democrats was a
commitment from House leaders to refrain from bringing the bill to the
floor for a vote until after Congress returns from the August recess in
order to provide lawmakers sufficient time to review the language.
According to Rep. Mike Ross (D-AR), who led
the negotiations for the Blue Dogs, the compromise would reduce the
overall cost of the bill by $100 billion. Regarding the creation of a
government-run plan, Ross said health care provider participation in the
plan would be voluntary, that provider payment rates would be
negotiated and not based on Medicare rates, and safeguards would be
established to ensure a level playing field for private plans. The
compromise also called for changes in the payroll tax for employers who
fail to purchase insurance for their employees. Ross said under the
deal, all employers with annual payrolls under $500,000 would be exempt,
and a payroll tax would phase in with the full eight percent tax
beginning at payrolls of $750,000. Additional elements of the agreement
are delivery system reforms, the grandfathering of existing state
insurance exchanges, the creation of state-based health coverage co-ops
in addition to the public plan option, and an increase in the cap on
premiums from 11 percent of income to 12 percent. The committee approved
the Blue Dogs' compromise amendment by a vote of 33-26.
Review the Blue Dog amendment here.
While some additional amendments will be added to H.R. 3200 in
September through a separate bill, House leaders will now begin the work
of melding the bills approved by the Energy and Commerce, Ways and
Means, and Education and Labor Committees for consideration by the full
House this Fall.
Senate Committee Postpones Reform Action Until September
Senate Finance Committee Chairman Max Baucus (D-MT)
said July 30 that his panel will not mark-up health reform legislation
before the Senate recesses on Aug. 7. Despite enormous pressure from
President Obama and Majority Leader Harry Reid (D-NV)
to produce a reform bill as quickly as possible, Baucus and a
bipartisan group of five other Finance Committee Senators have continued
daily meetings over the past several weeks in order to craft a
bipartisan agreement. According to members of this group, the key
sticking points in negotiations center on how to pay for the overall
cost of the reform bill,ensuring that health insurance is affordable,
and addressing the concerns of state governors regarding the additional
costs associated with expanding Medicaid eligibility. The group has set a
Sept. 15 deadline for having a proposal to present to the full Finance
Committee. Also complicating negotiations is the concern Republican
lawmakers have that the agreements they make with Baucus and other
committee Democrats will not be honored in the anticipated House-Senate
conference committee negotiations. On July 29, Sen. Mike Enzi (R-WY)
said he would not sign on to any bipartisan agreement that comes out of
the committee without a commitment from Democratic leaders that the
agreements reached would be included in the final bill that is sent to
CBO Delivers Sub-Trillion Health Reform Cost Estimate to Finance Committee
On July 29, Chairman Max Baucus (D-MT) said a
preliminary estimate prepared by the Congressional Budget Office
regarding health reform legislation the Finance Committee is drafting
would cost less than $900 billion over 10 years while providing coverage
to 95 percent of Americans. He said the bill would reduce the federal
budget deficit "by several billion dollars” in its tenth year, and the
number of Americans with employer-sponsored coverage would increase.
Baucus said the preliminary cost estimate does not include several
provisions still being negotiated by lawmakers, and he cautioned that
the CBO score does not indicate a deal on the package is imminent.
CBO: Savings From Medicare Council Proposal Only $2 Billion
In a July 25 letter to House Majority Leader Steny Hoyer (D-MD),
Congressional Budget Office Director Douglas Elmendorf wrote that
enacting the Administration's proposal to give the President broad
authority to change the Medicare program by establishing an Independent
Medicare Advisory Council (IMAC) would yield
modest savings of $2 billion over the 2010-2019 period. However, all of
the savings would be realized in fiscal years 2016 through 2019,
Elmendorf said. The White House sent the IMAC
plan to Congress on July 17, but the plan has faced significant pushback
from many industry stakeholders who disagree with the idea of having
unelected, independent officials, appointed by the President, setting
Medicare policy. As a result of the modest savings and the concerns
raised by stakeholders, many experts believe the plan will not
ultimately be included in health reform legislation.
Read Elmendorf's letter here.
Congressional Action This Week
The House adjourned for the August Recess on July 31. The Senate is
expect to recess on Aug. 7. Lawmakers will return to Washington,
following the Labor Day holiday on Tuesday, September 8th.
Posted: August 11, 2009