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The Latest News On Healthcare Reform

Senate inches forward

On Wednesday, Senate Majority Leader Harry Reid, D-Nev., finally revealed the Senate health reform bill. For the past few weeks, he and three other senators have been working to merge the two bills passed by the Senate Finance and the Senate Health, Education, Labor and Pensions committees: Majority Whip Dick Durbin, D-Ill., and the two committee chairmen, Max Baucus of Montana and Connecticut’s Chris Dodd. The bill is 2,074 pages long, and Reid says an early estimate by the Congressional Budget Office puts the bill’s cost at $849 billion for the first ten years. CBO also says passage of the Senate bill would result in 31 million more Americans being insured. In comparison, the legislation the House passed on Nov. 7 would cost about $1.1 trillion and insure 36 million more Americans.

Reid’s bill has several provisions that were not contained in the House bill or in previous versions of Senate reform bills, including an increase in payroll taxes for couples earning more than $250,000 a year and individuals earning more than $200,000, and a tax on cosmetic surgery. It also pushes back the effective date, from 2013 to 2014.

Among the provisions in its 2,074 pages:

• It mandates individuals buy insurance (although the penalty for not being insured is lower than in the House version)
• Expands the Medicaid program
• Reforms insurance practices
• Contains a public plan that allows states to opt out
• Taxes high-cost “Cadillac” insurance plans
• Cuts Medicare Advantage by $118 billion

The Senate’s schedule conundrum

There still is no definite timetable for when the Senate will begin to debate its version of health care reform. The best guess seems to be what Sen. Tom Harkin, D-Iowa, said in a radio interview early this week: that November 30 – the first day back from the Thanksgiving break – will be “the day it all begins.” Harkin also said that the Senate will work weekends in December to try to get a reform bill passed. The new goal is to pass it by Christmas, although senior Democratic senators are believe it’s unlikely that the chamber will pass a bill this year.

The first hurdle to overcome is the procedural vote to start debate. Reid, Harkin and Senate staff say they’re close to rounding up the 60 votes they need to begin debate. Democrats have exactly 60 members of their caucus, so they can’t afford for any of them to be absent or to vote no. And several senators – including Ben Nelson of Nebraska, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas – have said that they may vote against the Senate bill. But they’ve also suggested they may vote in favor of starting debate: As Nelson put it, if you don’t like the bill, isn’t it better to try to amend it? The procedural vote to begin debate could occur as early as Friday, but is more likely to be on Saturday.

The most optimistic timetable for the bill becoming law now goes like this: The Senate passes its version of reform before Christmas, the House and Senate reconcile their two very different approaches in early January, and a final vote on that final bill takes place before the State of the Union address, which is usually at the end of January.

The cost conundrum

Since the House passed its reform bill on Nov. 7, the issue of cost has gotten more attention. Suddenly it’s not just AHIP and the Chamber of Commerce talking about how the House bill fails to meet the President’s cost-cutting goals.

Last week, a number of economists, policy experts and reform advocates expressed concern that the legislation being considered doesn’t do enough to bend the cost curve, generate efficiencies or significantly change how health care is delivered. In fact, such well-respected experts on health policy as the chief executive of the Mayo Clinic, chief executive of Kaiser Permanente, the head of the Kaiser Family Foundation, and President Obama’s own budget chief, Peter Orszag, pointed out that most cost-cutting strategies either appear in the legislation as demonstration projects, pilot programs or “squeeze the prices a little bit across the board, rather than reforming the way” the system works, as Mark McClellan, who ran Medicare under George W. Bush, told the New York Times.

Meanwhile, the Washington Post published a front-page article called “Health bills too timid on cutting costs, experts say,” in which a number of reform advocates echoed the head of the nonpartisan National Coalition on Health Care, who said, “These bills do very little in terms of reining in long-term cost growth." That led the editor of the Post’s editorial page to write a column saying that although the House bill would “take America a giant step closer to the goal” of getting everyone access to health care, it “also could take America a step closer to bankruptcy.”

In the New York Times story, Obama’s chief of staff, Rahm Emanuel, didn’t argue with what any of these experts said. But he did point out that reform is a political exercise, subject to the will of politicians, which means it’s about what’s practical and possible to pass – not about what’s ideal.

“I’m sure there are a lot of people sitting in the shade at the Aspen Institute…who will tell you what the ideal plan is,” he said. “Great, fascinating….

“Let’s be honest,” he said. “The goal isn’t to see whether I can pass this through the executive board of the Brookings Institution. I’m passing it through the United States Congress with people who represent constituents.”

CMS concerned about services as well as costs

On Saturday, CMS – the federal agency that runs Medicare and Medicaid – weighed in with its report on what the House health reforms would do. The Washington Post described CMS’s report as “the clearest and most authoritative assessment to date of the effect that Democratic health reform proposals would have on Medicare and Medicaid.”

The Post’s analysis of CMS’s analysis found that the House bill “would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others….Medicare cuts are likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare altogether.” CMS pointed out that Congress, of course, could intervene and prevent such big cuts from taking effect, but that would wipe out a big chunk of the savings that are supposed to pay for reforms.

The Business Roundtable weighs in

Business Roundtable members provide health care coverage to more than 35 million American workers and their families. On Thursday, they released the findings of a study by Hewitt Associates, which showed effective reform could save as much as $3,000 per employee in 2019, and that the right reforms could result in health care costs growing at the same rate as overall GDP.

“Reforms that will work,” the report said – that is, help curb costs – include:

• Delivery system reforms and alternative methods of payment
• Financial penalties for preventable hospital re-admissions
• Increased financial participation in individual health-care spending decisions, including health savings accounts
• Cost and quality of care data that is easier for patients and providers to access
• Elimination of sharp regional variations in practice patterns
• Financial incentives to participate in wellness and prevention programs
• Insurance market reforms that promote competition and choice

The Business Roundtable also found that these items in some versions of health reform legislation would increase spending: delayed cost-saving efforts; weak individual mandates; and cost-shifting to the private sector because of reductions in federal payments to providers.

Get involved. Contact Congress about health reform at MyHealthReform.org.

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