Health Care Reform in the Senate—What in the World Is Going On?

It’s been a whirl-wind week in the United States Senate relative to health reform developments. On Tuesday, Senate Majority Leader Harry Reid (D-NV) announced that he, along with five more liberal Senators had come to terms on a plan that would replace the public option in the current Senate bill with a new national insurance plan offered by private insurers, and a chance for older Americans to “buy-in” to Medicare.

Much like when Reid announced he and key moderates and progressives had come to terms on the inclusion of a public option with a state-opt out provision (an idea which is apparently now off the table) no real details or legislative language on the “deal” have been released, not even to Senators. However, the group did agree to send information over to the Congressional Budget Office for scoring, a process that is expected to take the weekend and perhaps be completed Monday or even Tuesday, December 15. Reid has told reporters and his caucus that the final details of the proposal, which could be offered as a “Manager’s Amendment” to H.R. 3590 as early as mid-week next week, depending on its cost, will not be released until the CBO has completed its work. Some of the consensus details that are known include:

· The creation of a national insurance plan to be administered by the federal Office of Personnel Management,.

· A trigger option for a government-run plan if private carriers fail to participate in the new program.

· Expanded access to Medicare allowing people 55 to 64 to purchase coverage in the program. Details of who would be eligible within that age group, whether or not they would have to pay more to participate and when the new program would start are still a matter of conjecture.

· A medical loss ratio requirement for insurers to spend at least 90 percent of premium money on medical care, rather than on administrative costs or profits. It is unclear at this time if this requirement would apply to just the new national insurance program or to other markets/the exchanges as well.

· A reauthorization of the Children’s Health Insurance Program, which was set to expire in Oct. 1, 2013. It’s unclear at this time how the program would be impacted, including if the mandatory provision for states to establish programs to subsidize qualified employer-sponsored health plans that is in the current Senate bill will prevail.

Beyond the compromise discussions, the Senate has continued its work this week on amendments to the original bill, H.R. 3590. Currently, the Senate is locked up over an amendment on the reimportation of prescription drugs offered by Senator Bryon Dorgan (D-ND).

In terms of timeframe, there continues to be a tremendous push to get something passed by the Senate before Christmas, and House leadership has sent signals that they may be amenable to the potential compromise plan, and could potentially adopt the Senate passed legislation in order to truncate the conference committee process. However, it is unclear how the still-to-be finalized Senate bill, without a true public option and public financing of abortion language (which the Senate effectively rejected earlier this week), would sit with both the progressive and moderate members of the fractious House democratic caucus.

Other complicating factors include other bills on the Senate schedule, like Transportation Appropriations Conference Report and the other spending bills that have been passed by the House. They also need to address the debt ceiling. Furthermore, the lengthy CBO scoring process, potential concerns with the Democratic caucus about the “compromise deal,” and continued concerns about controversial issues like the abortion financing could all derail the Christmas plans. It is still anyone’s guess as to whether or not the Christmas deadline will happen, but it is important to note that the Senate leadership hasn’t met a deadline its set for itself yet!

Reform “Compromise” Details Seem to Please No One

The release by Senate Majority Leader Reid of some details of the “compromise” proposal on the public option and other issues agreed to by five Democratic moderates and five liberals earlier this week has ignited a firestorm of criticism from all sides of the debate. Already, confidential sources in the Democratic leadership have indicated that they are tweaking the proposal in response to member concerns.

Within the Senate, in addition to blanket opposition by the GOP leadership, several key moderates have announced varying degrees of concern about the proposal, particularly with regard to the proposed buy-in to Medicare for people age 55-64. Moderate GOP member, Olympia Snowe (R-ME), who was not consulted in the most recent negotiating process but is still being courted as a potential cross-over vote, said this week that she was disturbed by the potential increase in the cost-shift to private plans, due to the low reimbursement rates Medicare already pays to providers. She explicitly noted that this provision plus others would in all likelihood ensure her final vote in opposition.

Senator Joe Lieberman (I-CT) told reporters this week that he was growing “increasingly concerned” about the proposal. “I am worried about what impact it will have on the Medicare program’s fiscal viability and also what effect it will have on the premiums paid by people benefiting from Medicare now.”

Senator Ben Nelson (D-NE) noted that the Medicare buy-in has the potential to drive the country towards a single-payer system “which I do not like.” He continued by saying, “I wouldn’t be surprised if this thing does not become a viable option. I think it is going to be the lesser of the popular things, but I am keeping an open mind.”

Even much more liberal Senators whose votes are considered to be “safe,” have expressed concerns about the lack of detail in the proposal and the lack of a true public option and the potential harm to Medicare. Senator Barbara Mikulski (D-MD) commented on Thursday, “What is the impact on the stability of Medicare? If we are going to expand it to 3 million people, then how are we going to pay for it? One of the ideas of health reform was to ensure the stability and solvency and benefit package of Medicare.” And even Senator Russ Feingold (D-WI) who was one of the five liberal Senators negotiating the agreement has indicated to reporters that he hasn’t let go of the public option entirely and released a statement Tuesday indicating that he has also not signed onto the proposal.

In addition to the opinions expressed this week by members of the Senate, many other groups and news media outlets have expressed their strong concerns as well. The private health insurance community is unified in its opposition to the new “plan,” as are key business groups like U.S. Chamber, the NFIB and the National Retail Federation, the Business Roundtable and others.

The compromise is also drawing the ire of leading provider groups. The American Hospital Association, the American Medical Association, the Federation of American Hospitals and the Mayo clinic are all significant provider organizations that have objected to the new deal as described due to Medicare buy-in provisions and the potential payment reimbursement issue. Even AARP, which has previously endorsed versions of subsidized “buy-ins” to Medicare and the House-passed reform bill, said it did not know enough about the new initiative to take a position.

The labor unions also stepped up their criticism of the proposed bill, particularly its proposed excise tax on high-cost health insurance plans. The Governors and state legislators are beginning to express their serious concerns too, particularly over the potential expansion of Medicaid and how it could financially cripple the states, most of whom are already facing record budget deficits.

Finally, and most significantly the American public’s support for the Senate’s work continues to fall. According to CNN’s survey this week, just 36 percent favor the Senate bill while 61 percent oppose it. Seventy-nine percent Americans surveyed also said the bill would increase the deficit and 85 percent said the bill would increase their taxes. Fox reports this week that their survey shows that 57 percent oppose health reforms and 34 percent favor them. Also, their poll indicates 41 percent want Congress to pass reform while 54 percent said they'd rather Congress do nothing. A New York Times survey released this week shows that 34% of the public think the current reform proposals will hurt them versus the just 16% who think it will help them.

According to the Rasmussen polling organization, for the second week in a row only 41% of U.S. voters favor the health care plan proposed by President Obama and Senate Democrats. These two weeks at 41% approval follow a week of 38% approval over the Thanksgiving holiday--the lowest extended period of support for the plan yet. Rasmussen reports, “With the exception of a few days following nationally televised presidential appeals for the legislation, the number of voters opposed to the plan has always exceeded the numbers who favor it.” This week’s Rasmussen survey also shows that 51% oppose the plan, including 40% who strongly oppose the plan, with just 23% strongly in favor.

Wyden and Collins File Joint Amendments with the Potential to Harm the Employer-Based System

Senators Ron Wyden (D-OR) and Susan Collins (R-ME) filed three bipartisan amendments to H.R. 3590 on December 10. They include a variation on Senator Wyden’s previously proposed “Employee Free Choice Amendment,” which could have a devastating impact on the employer-based system of providing health insurance coverage. The amendment would require employers to give their lower-income employees a voucher to use in the individual market or exchange who would normally be ineligible to purchase subsidized coverage through the exchange instead of participating in the employer-provided plan. The employee can also keep amounts of the voucher in excess of the cost of coverage elected in an exchange without being taxed on the excess amount. Under the Wyden-Collins version of the amendment, any employer offering its workers vouchers would have access to the exchange in 2015 rather than 2017, which is the schedule for employer access in the bill.

In addition to the employee choice amendment, the two Senator have also filed an amendment to expand the exchange even further and make it possible for individuals who are not eligible for a subsidy, to purchase a catastrophic plan in the exchange, regardless of age. Their third amendment would amend the $6.7 billion annual fee or national premium tax that will be imposed on all health insurance carriers beginning in 2010 based on premium volume. The amendment does nothing to reduce the overall amount expected to be generated by the new insurer tax, but it does modify the fee structure to create an incentive for insurers to hold down rates. Under the amendment, starting in 2010 the fee per insurer could be varied by as much as 50% based on how aggressively they control costs.

Based on the bipartisan nature of these amendments, and the continued hope of the Democratic leadership to convince at least one GOP Moderate like Senator Collins to vote for their overall plan, there is a very good chance that these provisions will be included in any “Manager’s Amendment” offered by Senate Majority Leader Reid in the coming weeks. If this is the case, we will let you know as soon as possible so that you can get involved in the opposition campaign!

Senate defeats GOP amendment to reverse Medicare cuts in healthcare bill.

The Senate voted yesterday to defeat a GOP amendment to the healthcare bill, sponsored by Sen. John McCain (R-AZ), that would reduce Medicare funding by $460 billion. There was extensive print coverage of the vote, which generally cast the defeat of the amendment in positive terms, although several reports acknowledged Democrats took a political risk. In addition, the Senate approved an amendment by Sen. Barbara Mikulski (D-MD) on women's health.

The AP (12/4, Espo) reports, "Unflinching on a critical first test, Senate Democrats closed ranks Thursday behind $460 billion in politically risky Medicare cuts at the heart of healthcare legislation, thwarting a Republican attempt to doom President Barack Obama's sweeping overhaul." The "bid by the bill's critics to reverse cuts to the popular Medicare program failed on a vote of 58-42, drawing the support of two Democratic defectors." The Medicare vote "came not long after the Senate backed a guarantee for all insured women age 40 and older to receive mammograms with no out-of-pocket costs."

The Washington Post (12/4, Montgomery) reports the Medicare amendment "would have sent the bill back to committee with orders to remove the spending cuts. The amendment effectively would have forced Democrats back to the drawing board after months of negotiations to craft a measure that would extend coverage to 30 million additional Americans without increasing budget deficits." Of "four amendments considered Thursday, McCain's was the most potentially damaging."

Under the headline, "Senate Backs Preventive Health Care For Women," the New York Times (12/4, A21, Pear, Herszenhorn) reports the Senate "voted Thursday to require health insurance companies to provide free mammograms and other preventive services to women, and it turned back a Republican challenge to Medicare savings that constitute the single largest source of financing for the bill." The "61-to-39 vote on health benefits for women would, in effect, override new recommendations from a federal advisory panel that said routine mammograms should begin at age 50, rather than 40."

The Washington Times (12/4, Dinan) reports Democrats "successfully defended more than $400 billion in Medicare cuts, turning back a potentially lethal stab at the measure." Democrats "argued that the cuts -- totaling $464 billion over 10 years -- would not affect the basic services guaranteed by Medicare, and instead would squeeze insurance companies and hospitals that are overcharging for the level of service they are providing." Notably, AARP, "the large and influential seniors lobby, opposed Mr. McCain's amendment."

Politico (12/4, Brown) reports in "response to the McCain amendment, Democrats received unanimous support for an alternative from Sen. Michael Bennet (D-CO) that restates principles in the bill -- that the Medicare cuts would not affect guaranteed benefits for seniors."

Roll Call (12/4, Drucker, subscription required) reports Republicans "vowed to offer measures similar to the McCain amendment to try to force Democrats into tough votes on Medicare, the federal health program for the elderly. McCain said he would keep attacking the issue."

McCain "rebukes" AARP for supporting Medicare cuts in Senate bill. Reuters (12/4) reports that, following the defeat of his amendment to send the health reform bill back to the Finance Committee, Sen. John McCain (R-AZ) attacked AARP for its support of the health overhaul, and for backing Democrats regarding the cuts to Medicare Advantage plans.

Similarly, The Hill's (12/3, Romm, subscription required) Blog "Briefing Room" reported, "Sen. John McCain (R-AZ) on Thursday rebuked the AARP for opposing his amendment to rollback many of the Medicare changes Democrats included in their healthcare bill." In a tweet sent shortly after the measure was defeated, McCain wrote, "I call on seniors to cut up their AARP cards and send them back to them!" The Hill explains that McCain's amendment, first proposed on Tuesday, "quickly earned the AARP's scorn." In response to it, AARP CEO Barry Rand wrote, "The legislation before the Senate properly focuses on provider reimbursement reforms to achieve these important policy objectives. ... Most importantly, the legislation does not reduce any guaranteed Medicare benefits."