With debate on the Senate healthcare bill to begin this week, media reports indicate that Senate Majority Leader Harry Reid (D-NV) faces a difficult challenge in herding the 60 votes needed to advance the legislation. The AP (11/30) reports, “The 60 votes aren’t there any more. With the Senate set to begin debate Monday on healthcare overhaul, the all-hands-on-deck Democratic coalition that allowed the bill to advance is fracturing already.” The AP notes the fractures include divisions on abortion and the public option, and the stakes for Reid. The public is “ambivalent about the Democrats’ legislation. While 58% want elected officials to tackle healthcare now, about half of those supporters say they don’t like what they’re hearing about the plans, according to a new Kaiser Family Foundation poll.”
Politico (11/30, Brown) reports the “next phase in the Democrats’ healthcare push will be waged in the privacy of the Senate leadership office,” where Reid “will attempt to do something that has eluded him all year: negotiate a compromise on the public insurance option that can garner 60 votes and win over a public still leery of reform.” Republicans want “six weeks of debate — which would be enough to push the final vote past Christmas — and have an arsenal of stalling tactics. But Democrats can short-circuit the debate all at once, simply by reaching a deal on the public option and filing cloture on the bill, which would set up the final crucial test vote before final passage.”
The Hill (11/30, Young) lists seven issues likely to come up in the amendments to the Senate bill, including the public option, abortion, the health insurance excise tax on “high-cost health insurance plans,” which “may enjoy support in the White House but many Democrats and labor unions remain staunchly opposed to what they view as a middle-class tax hike”; prescription drugs, affordability, insurance exchanges and Medicare cuts. The Wall Street Journal (11/30, Bendavid, subscription required) also reports on amendments that will likely affect the course of the bill, noting that proposals made by both conservative and liberal lawmakers will complicate the bill’s progress. Meanwhile, USA Today (11/30, Fritze) discusses the senators who are expected to play a key role in the debate.
Senate leaders face challenges in passing healthcare reform. CQ Weekly (11/30, Wayne, Armstrong, subscription required) reports, “Despite a narrow and hard-won victory in their quest to bring healthcare overhaul to the floor, Senate backers begin this week effectively facing an impasse over the legislation.” CQ adds that the “Democratic leadership barely mustered the 60 votes — on strict party lines — needed to keep Majority Leader Harry Reid’s bill alive and move it forward.” Notably, moderate Democrats who supported Reid have “served notice…that he cannot count on them to vote for passage unless the legislation is made more to their liking.”
Senate bill would delay implementation of many reforms. The Washington Post (11/30, Hilzenrath) reports, “Measured against the promises President Obama and congressional Democrats have made about healthcare reform, the bill the Senate begins debating this week could be setting Americans up for disappointment: Some of the main reforms would not take place for several years, and even when they do, some observers say, the bill does too little to make sure they would be enforced.” Until 2014, “insurance companies could continue to deny coverage or charge higher premiums based on people’s medical history.” Another “highly touted reform — banning annual and lifetime limits on coverage — would take effect in 2010, but it would permit significant exceptions.”
On November 7, 2009, the House of Representatives passed H.R. 3962, the Affordable Health Care for America Act, by a vote of 220-215. The vote is historic because no chamber of Congress has approved such a sweeping expansion of coverage since the passage of Medicare and Medicaid in 1965. Rep. Anh “Joseph” Cao (R- Louisiana) was the only Republican to vote in favor of the bill. Many Democrats were convinced to vote for the proposal after an amendment was adopted limiting the use of federal funds for abortion services. The Congressional Budget Office (CBO) estimated the cost of the bill at $1.05 trillion over 10 years.
Proponents of the bill are touting the legislation as a way to accomplish President Obama’s goals for health care reform. They state that the bill will contain health care costs, keep coverage affordable and insurers accountable by introducing competition into the marketplace, protect people’s choices of doctors and health plans and assure all Americans access to quality, stable, affordable health care. Opponents of the legislation argued that the bill would lead to the government takeover of the private health care system. They are also concerned that the legislation will increase families’ health care costs, increase the deficit, increase taxes and cut Medicare.
Key Provisions
Key provisions of H.R. 3962 are outlined below. The bill provides that expansion of coverage would be funded through cuts to Medicare spending and a variety of new taxes, including a 5.4 percent tax on annual income over $500,000 for individuals and $1,000,000 for families.
Exchange – The proposed legislation would create a national “Health Insurance Exchange” to be effective in 2013. The Exchange would be operated by a new federal agency known as the “Health Choices Administration (HCA).” Individuals may use the exchange to purchase health insurance if they are not covered by employer-sponsored insurance, Medicare or Medicaid. Small employers may also purchase insurance through the exchange; within three years, the Exchange would be open to employers with up to 100 employees. Over time, the Exchange may be available to larger employers as well. States may opt out of the federal Exchange if they operate their own exchange that meets federal requirements. Public Health Insurance Option – Unlike the bill that passed the Senate Finance Committee last month, the House bill contains a public health insurance option. The public option would compete with other plans in the Exchange. The Secretary of Health and Human Services will administer the public option and negotiate rates for providers that participate. Start-up funding will be provided for the public option, but the public option will be financed only by its premiums.
Benefit Plans – Individuals may keep their current coverage if they so choose, as long as there are no changes made to cost-sharing, contract terms, or benefit levels. However, a new Health Benefits Advisory Committee will be tasked with recommending an essential benefit package based on actuarial standards outlined in the bill. This benefit package will be the basic benefit package offered in the Exchange and would eventually become the minimum standard for employer plans. The Exchange would have four plan levels with the same essential benefits and various levels of cost-sharing.
Coverage Mandates – Beginning in 2013, individuals would be required to obtain health insurance coverage, either through their current plan, a government plan like Medicare or Medicaid, an employer-based plan or an individual or group plan that meets minimum benefit requirements. Those who choose not to obtain coverage would pay a penalty of 2.5 percent of their income. Certain exceptions are available, including an exception based on financial hardship. Employers with an annual payroll over $500,000 would also have to provide coverage with certain minimum benefits or face a penalty up to 8 percent of payroll tax. A tax credit will be available for certain small businesses that provide health coverage to employees.
Affordability Measures – To increase affordability of health coverage, the bill provides for affordability credits to some low- and moderate-income individuals and families. The credits are offered on a sliding scale through the Exchange. The bill also contains caps on out-of-pocket spending of $5,000 for individuals and $10,000 for families.
Insurance Market Reforms – The new legislation would implement various insurance market rules with effective dates ranging from 2010 to 2015. Changes would include government review of health plan premiums, enforcement of an 85 percent medical loss ratio, and coverage of children as dependents through age 26. The reforms would also prohibit lifetime benefit limits and insurance rating based on health status or pre-existing conditions, limit age rating to 2:1, and prohibit cancellation or rescission of coverage except in cases of fraud. States may also choose to permit the sale of health insurance across state lines.
Medicaid and Medicare – Under H.R. 3962, Medicaid would be expanded and improved. Additional individuals and families would be eligible for coverage. Medicare would also be improved with elimination of certain cost sharing provisions, increased primary care access and better coverage for prescription drugs.
What’s Next?
The debate on health care reform next moves to the Senate. Despite a goal of bringing a proposal to the Senate floor by Thanksgiving, it is possible that a new proposal will not be ready before the end of the year. It is unlikely that any legislation that passes the Senate will mirror the bill passed by the House. Many Senators have expressed their plans to block legislation that includes a public option.
If the House and Senate both manage to pass health care overhaul bills, a conference committee then will negotiate a final version requiring approval from both chambers before going to President Obama for his signature.
ES 11/09
This Cohen-Seltzer Inc Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
In a 53-47 vote, the Senate Wednesday dealt what media reports are describing as a blow to President Obama’s plans for healthcare reform. While the procedural vote concerned a popular Medicare bill to increase payments to doctors by $247 billion, the media coverage notes that many of the Democrats who voted against the bill expressed concern that the bill was not funded and simply added to the deficit.
The New York Times (10/22, A25, Pear, Herszenhorn) reports that Democrats “lost a big test vote on healthcare legislation on Wednesday as the Senate blocked action on a bill to increase Medicare payments to doctors at a cost of $247 billion over 10 years.” Senate Majority Leader Harry Reid (D-NV) managed to win “only 47″ votes of the 60 needed for cloture, and he “could not blame Republicans,” as 12 Democrats and one independent, Sen. Joseph Lieberman (ID-CT), were opposed. By “addressing doctors’ fees in a separate bill, Senate Democrats could hold down the cost of the broader health legislation, keeping it within the limits set by President Obama,” but Republicans “said it was a transparent ploy to hide the cost of a healthcare overhaul.”
The Los Angeles Times (10/22, Hook, Levey) likewise reports the “setback for Reid represented a warning about the unpredictable road ahead for the far more controversial and expensive propositions at the core of President Obama’s healthcare overhaul.” Senate Democrats also “delivered a clear and important message to the AMA that the organization’s top priority cannot be included in the bill without jeopardizing an overhaul that many in the medical profession believe is critical to preserving the nation’s healthcare system.” The Washington Post (10/22, Murray) calls the vote “rare bipartisan agreement…as 13 Democrats joined all 40 Republicans to block a permanent repeal of Medicare’s payment formula for doctors.”
The Hill (10/22, Bolton) says that Reid “blamed the American Medical Association (AMA) for giving him bad information on the number of Republicans expected to support the measure.” But AMA President J. James Rohack said, “The reference to 27 votes was made well before S. 1776 was introduced and in the context of bipartisan health reform legislation.”
The Washington Times (10/22, Haberkorn, Rowland) reports the Senate “blocked an expensive change to the way doctors are paid under Medicare over concern about the mounting deficit, in what Republicans called the first defeat for President Obama’s healthcare plan.”
CongressDaily (10/22, Friedman, subscription required) says, “Senate Republicans portrayed Wednesday’s trouncing of a Democratic effort to invoke cloture on a bill to fix a Medicare payment formula for physicians as an early win in their effort to defeat healthcare reform legislation.” In fact, several “Republicans suggested Reid pushed for the cloture vote even though he knew he would lose as part of an agreement that AMA and AARP would back the larger health bill.”
Reid vows to find “new solution” to Medicare physician payment issue. Bloomberg News (10/22, Rowley, Jensen) reports, “Democrats are looking for a new solution so they can hang onto the support of doctors and seniors for the broader healthcare legislation.” Sen. Reid said, “We’re going to take care of senior citizens and the doctors, whether it’s a 1-year fix, or a 10-year fix.” Bloomberg adds, “In the Medicare-reimbursement issue, doctors say they are already underpaid by the federal program, and many refuse to see those patients as a result. Without a permanent solution that averts further cuts, seniors will have a difficult time finding care, said David Sloane, a vice president at AARP, which represents 40 million seniors.”
Similarly, CQ Today (10/22, Armstrong, subscription required) reports that “AARP said the Senate’s failure to act could threaten seniors’ ability to see the doctor of their choice by making physicians more reluctant to serve Medicare patients.” Notably, “Senate Democrats are trying to blame Wednesday’s ‘doc fix’ vote on Republicans — and taking pains to assure the two powerful lobby groups pushing the bill that it will be revived and passed.” But, “AARP portrayed Wednesday’s developments as a failure caused by Democrats and Republicans.”
On October 13, 2009, the Senate Finance Committee approved Senator Max Baucus’s (D-Montana) health care bill, the America’s Healthy Future Act, by a vote of 14 to 9. Senator Olympia Snowe (R-Maine) was the only Republican to vote with the committee’s 13 Democrats in favor of the bill. The Congressional Budget Office (CBO) estimated the cost of the bill at $829 billion over 10 years.
The stated aims of the legislation are to lower costs, provide quality, affordable health care coverage, make purchasing health insurance easier, prohibit discrimination due to health factors and improve the way the health care system delivers care. However, many in Congress are divided on whether the bill can meet these objectives. Opponents of the bill have argued that it will increase costs for many Americans, rather than making health care more affordable.
Key Provisions
Key provisions of the bill are outlined below. One provision that is conspicuously absent is the “public option.” Instead, the legislation provides for nonprofit, consumer-run cooperatives to fill that role. These cooperatives would be eligible for federal grants and start-up funds.
Insurance Market Reforms – Insurance companies would be required to issue coverage to all individuals, regardless of health status and would no longer be able to limit coverage based on pre-existing conditions. Limited variation in premium rates would be permitted for tobacco use, age and family composition. Rates could vary between geographic areas, but not within the same area. These reforms would apply to the individual and small group markets. Large and midsize employers with group health plans would be precluded from imposing unreasonable annual and lifetime limits on coverage and would be required to cap out-of-pocket costs.
Exchanges and Tax Credits – The bill would create state-based web portals or “exchanges” where individuals purchasing coverage on the individual market could review every coverage option available in their zip code. The exchanges, which would have to be established by 2010, would provide standardized forms and materials, as well as customer support through a call center. Certain individuals would be able to receive a tax credit for purchasing coverage through an exchange. Some small businesses that provide health coverage would be eligible for tax credits as well.
Individual and Employer Mandates – Beginning in 2013, all U.S. citizens and legal residents would be required to have health insurance, either through the individual market, public programs, or their employers. Those who choose to keep their current insurance are able to do so. An excise tax would be imposed on those who fail to comply, unless they qualify for a religious or income-based exemption. There is no requirement that employers offer coverage, but certain employers must automatically enroll employees if they do provide plans and some employers may be assessed a fee if their employees receive premium tax credits.
Medicaid and Medicare – Under the bill, Medicaid would be expanded to cover additional individuals and States would receive federal assistance to help address the additional costs. The bill provides for annual wellness visits for Medicare beneficiaries and encourages coverage of preventive services for Medicare and Medicaid beneficiaries.
Next Steps
This bill is not likely to be the final word on health care reform. A number of other bills are in consideration by various Congressional committees. If the House and Senate both manage to pass health care overhaul bills, a conference committee then will negotiate a final version requiring approval from both chambers before going to President Obama for his signature.
With health care costs at a crisis stage, there is no shortage of sweeping health care reform ideas in Washington and throughout the nation. No one will argue that reforms need to take place, but the fundamental question is what type of reform Americans want? The reality is that every health care reform idea takes one of two roads – increased government intervention or a private market solution. Each reform provides a means to a very predictable end; therefore, the debate over the next few months will focus on what end we wish to achieve. Will we continue to buy our health care in the free market, or will we allow the government to take over our health care system?
Whether you are discussing a single payer system, or a state plan, every government solution calls for increased regulation and government control regarding how we finance our health care. These plans begin with radical changes to our current financing system (insurance), and in many of the reforms, completely do away with our current insurance system. This is alarming for two reasons. First, health care costs are not expensive because of insurance; rather, insurance is expensive because of rising health care costs, and by the increased demand created by unhealthy lifestyles. Attempts to fix the financing mechanism, rather than trying to fix the rise in health care costs, does not address the real problem. Second, while most Americans do not want government-run health care (a socialistic approach), the reality is that this is the ultimate end to any government solution. The architects of these specific types of reforms do not necessarily aspire to create government-run health care; yet, it is the only realistic way any government solution can control rising health care costs.
Private market reform solutions focus on creating competition and transparency to reduce or eliminate these fee increases. The government solution for reducing or eliminating the increases is government control over the health care providers. This is called government-controlled health care; where the government owns hospitals and physicians are employees of the government. This creates a health care system in which care is rationed. We certainly do not want the government to control or ration health care; and, though some Americans support government reform plans, these individuals are unaware of the negative impact such plans will have on the quality of American health care. Most of us have, or know someone who has experienced enhanced quality (and length) of life due to the advances in our medical systems. A government run health plan would greatly diminish the improvements in treatment, research, development, and innovation that Americans have enjoyed.
Thus far, government reform solutions have failed to: provide transparency; reduce rising insurance premiums, or reduce the uninsured rate; however, private market solutions have succeeded.
We already have government run plans (such as Medicare and Medicaid), and can look to them for an idea of how larger government plans might fare. So far, they have controlled costs mainly by artificially limiting payments. Essentially, paying less than the cost of care. While that does hold the lid down on spending for those plans, it does not save costs in the big picture, as those underpayments are “cost shifted” to the insured plans and private companies who are paying the bills for their employees. If the whole country went to one government system, that (cost shift) strategy—applied to the entire market, instead of around half—would essentially blow up the whole system.
The private market was the inventor of transparency, as it created the tools by which consumers monitor both the cost and quality of the health care they receive. Additionally, the private market understands why health care costs are rising.
Any health care reform idea takes the road of government intervention, fails to address the fundamental problem of rising health care costs. We need to be sure that any reform chooses the path of a private market solution so that we can ensure our health care can be purchased in the free market both today and in the future.
The Washington Post (10/5, Connolly) reports Sens. Ron Wyden (D-OR) and John D. Rockefeller (D-WV) “have refused to pledge support for the healthcare reform bill scheduled for a vote this week” in the Senate Finance Committee, “underscoring the hard work ahead for President Obama as he tries to enact the most ambitious domestic policy legislation in more than a generation.” Chairman Max Baucus (D-MT) “said he has the votes to pass the 10-year, $900 billion bill out of the committee,” but if “all 10 Republicans on the panel vote no, two Democratic defections would be enough to send Baucus and the Obama White House scrambling to regroup.”
Democratic leaders pressure moderates to support public option. Roll Call (10/5, Drucker, Pierce, subscription required) reports moderate Senate Democrats “face increasing pressure to support a healthcare bill that includes a public insurance option, and many appear prepared to fall in line with Democratic leaders — provided they are presented with a bill that can withstand public scrutiny in their home states.” To “seal the endorsement of moderates, Democratic leaders are working to wrap the controversial elements of reform in a politically attractive message to the centrists’ conservative-leaning constituents.” Both Senate Democratic Conference Vice Chairman Charles Schumer (D-NY) and Majority Leader Harry Reid (D-NV) “indicated that state-specific or Senator-specific sweeteners might be added to secure centrist votes.”
Democrats face new hurdles as healthcare overhaul moves closer to fruition. In a front-page story, the New York Times (10/4, A1, Pear, Herszenhorn) reported that after the Senate Finance Committee approves “its healthcare bill this week,” Democrats will be “closer than ever” to a major healthcare overhaul. However, party leaders “still face immense political and policy challenges.” For one, they must “combine rival proposals — two bills in the Senate and three in the House.” Moreover, Senate Democrats must address “intricate details” and are likely to face “big hurdles” as they seek to “secure the 60 votes needed to overcome a possible Republican filibuster.” Policy challenges “are also daunting.” Over the course of “one year, the Democrats are trying to restructure one-sixth of the economy,” and writing a bill that “will affect almost every American, every business and every doctor and hospital in the country.”
Similarly, Politico (10/3, Brown) noted that although Chairman Max Baucus (D-MT) “brought Congress closer than it ever has been to passing” comprehensive reform, the panel “didn’t even come close to finishing” work on the bill, ending Friday with “long and complex” list of “unresolved” issues. Complicating the matter is that fact that the process has “begun to move to the discreet backrooms of the Capitol,” where Senate Majority Leader Harry Reid (D-NV) will “begin huddling next week with other top Democrats to meld two competing Senate bills.”
House Democratic negotiations seen as hindered by party divisiveness. The Hill (10/3, Soraghan) reported that House Democratic leaders, despite “60 hours worth” of “behind closed doors” caucus meetings in September, still have many “problematic issues…unresolved.” The most “public debate is about the ‘public option,’” as Speaker Nancy Pelosi “tries to mediate a burgeoning feud between liberals and centrist Blue Dog Democrats about what form the government-run plan should take in the legislation.” But the “tax question” — they “have not decided what taxes to raise, or whether to raise them at all” — could be “even more divisive…pitting union allies against business-minded centrists who believe that a tax-the-rich strategy will backfire by hitting small business.”
As the President continued his call for action and compromise on healthcare reform over the weekend, his top spokesman, Robert Gibbs, appeared on CNN’s “State of the Union” and echoed Obama’s statements that the so-called public option is not a deal-breaker for the White House. The AP (9/14) reports that “the White House and its Democratic allies on Sunday tried to play down the role of a government insurance option in healthcare legislation as the party in power worked to reclaim momentum.” Gibbs “described the public option as just one way to achieve Obama’s goal of providing coverage to about 45 million uninsured Americans.” Gibbs said the public option as “a means to an end, but it is not all of healthcare,” and “echoing that sentiment, Sen. Claire McCaskill (D-MO) said the focus on this specific issue has become a distraction in a debate over how most people receive healthcare coverage.” Other Democrats, including Sens. Sen. Jeanne Shaheen (NH), Dianne Feinstein (CA), and Kent Conrad (SD), offered similar opinions.
Another AP (9/14) article, meanwhile, notes that David Axelrod, “the top adviser to…Obama,” said on CBS’s “Face the Nation” that “the White House is ‘not willing to accept’ that Congress will reject a government-run public option in the healthcare overhaul.” Axelrod said on CBS’s Face The Nation (9/13, Schieffer) that Obama “continues to believe it’s a good idea. He continues to advocate it. … But what he also said…is that this is not the whole of health insurance reform. And we should not let the whole debate devolve into this one question.”
However, the New York Times (9/14, Berger) reports that Axelrod also said, “We should not let the whole debate devolve into this one question, circulate around this one question, and lose the best opportunity we’ve had in generations to do something very significant about a problem that just — that is just getting worse.” The Times also reports that “in other television appearances, several Democratic lawmakers also played down the necessity of devising a government-run health plan as part of a healthcare package.”
Snowe wants public option “off the table;” Collins opposed to “trigger option.” ABC World News (9/13, lead story, 2:55, Harris) reported that “more cracks were developing in a central pillar” of the healthcare reform plan. ABC’s Kerley added that “the President’s call for a public option received another nail in the coffin, from the very Republican Senator considered essential to pass healthcare reform.” Sen. Olympia Snowe (R-ME) said, “I urge the President to take the public option off the table. There’s no way to pass a plan that includes the public option.” And “while refusing to call the option dead, even the President’s men…downplayed its necessity.” The New York Times (9/14, Berger) notes that Snowe said that “clinging to the public option…’leaves open a legislative possibility that creates uncertainty in this process.’” The Hill (9/14, Soraghan) notes, however, that Snowe said “she could support a so-called ‘trigger’ that would enact the government-run plan to compete with private insurers if the private insurance market fails to become more competitive.”
President Obama’s speech to Congress is generating mostly glowing media reviews. While some argue the President failed to provide a sufficient level of detail on his healthcare reform views, his delivery is earning widespread media praise, with a number of analysts predicting that the address will energize the debate in both the House and Senate. The Washington Post (9/10, Balz), for example, reports that the President “almost certainly will get a boost in the polls from Wednesday’s speech,” even as “much work remains.” Along similar lines, the New York Times (9/10, A42) editorializes that “the president finally found his voice,” but “will need to do more than orate. He needs to twist arms among timid Democrats in Congress to get a strong bill passed, most likely with little support from Republicans.”
In a separate report, the Washington Post (9/10, Connolly, Shear) also noted that Obama cast himself “squarely in the political center,” while the New York Times (9/10, A27, Nagourney) describes the speech as “an attempt by this still new president to display his authority to a Congress that had begun to question his fortitude, to show that he was as strong a political leader as he was a political candidate and to show that he was not — to use the shorthand of the day — another Jimmy Carter: professorial, aloof, a micromanager who perhaps was not ready to be the nation’s chief executive.” And Obama “managed to invest his case with both economic and emotional urgency…without getting bogged down in too many details.”
USA Today (9/9, Wolf) reports that “Obama used Wednesday’s speech to get specific about his plan. He endorsed tax credits for those who need help buying insurance, mandates that individuals get insurance and large companies provide it to workers or pay a fee, and a new tax on the most expensive insurance policies.”
A third story from the Washington Post (9/10, Murray, Kane) reports that the speech “gave the healthcare debate a much-needed shot of momentum, but the direct appeal won’t erase the rancor of recent months, both within the Democratic Party and among Republicans.” Yet “with Obama fully engaged, Democrats were newly confident they could deliver a bill by the end of the year.”
In BusinessWeek’s (9/10) The Debate Room blog, Paul Kitchen writes, “The only way to truly reduce healthcare costs is to put as many healthcare dollars in consumers’ pockets as possible through consumer-driven health plans (CDHPs), aka high-deductible health plans (HDHPs). The empirical evidence of this is overwhelming: According to a study by the American Academy of Actuaries, premium costs for CDHPs have trended as much as 40 percent lower than managed-care insurance, and multiyear premium savings reached $21 million per 10,000 employees, according to a study conducted by Aetna (AET).” In contrast, Brian Klepper notes, “As an employee-benefits survey by Towers-Perrin discovered…user satisfaction” with HDHPs “is low. Patients’ costs are high and they generally don’t get information for better decisions.” In addition, he notes, “People with chronic diseases…may exhaust their HSA money nearly as fast as they deposit it, never building a surplus.”
Coverage of the run-up to President Obama’s speech to Congress tends to focus on the “public option” debate, and reflects statements from key Democrats that suggest the intra-party split on that issue presents a growing challenge for the President. The New York Times (9/9, A17, Calmes, Pear) notes that “Democratic Congressional leaders voiced optimism Tuesday afternoon after meeting with…Obama to plot strategy on healthcare legislation,” but “despite the Democratic leaders’ remarks, the political reality seems to be that the more liberal House will not pass a healthcare bill without a public insurance option — while the Senate will not pass one with it.” The Washington Times (9/9, Miller) points out that “the public option has become the biggest sticking point in the debate, with liberal Democrats insisting on it and moderates and Republicans balking.” That division “extends to the top ranks of the House.” The AP (9/9, Alonso-Zaldivar) likewise reports that “divisions among Democrats undercut…Obama’s effort to regain traction on his healthcare overhaul.”
AFP (9/9) notes that House Speaker Nancy Pelosi (D-CA) said after meeting with Obama that “a government-run insurance option was ‘essential’ to passing…health reform.” Pelosi, the Washington Post (9/9, Murray, Montgomery) reports, said that the President Tuesday “indicated support for a public option,” and that “he will convey in his speech that ‘if you have a better idea, put it on the table.’” Meanwhile, Blue Dog leader Rep. Mike Ross (D-AK), “said he could no longer support a government-run plan, a shift from his position a few months ago.” House Majority Leader Steny H. Hoyer (D-MD) “said he still supports a public option but could back legislation without it — a remark that ran counter to Pelosi’s insistence Tuesday that a government plan ‘is essential to our passing a bill.’”
In a front-page story, the Wall Street Journal (9/9, A1, Weisman, Adamy, subscription required) reports that Obama will come out strongly in favor of the public option tonight.” The Politico (9/9, Brown) notes that “at some point, Obama will need to go with one faction or the other — but so far has been reluctant to definitively pick sides, something that appears unlikely to change in Wednesday’s address.” Obama “appears intent on threading the needle of voicing support for a public option, while making clear he’ll sign a bill without it,” and “that will likely embolden liberals to hang on to the public option until the president unequivocally tells them no — which could prolong the agony for Democrats, and the weeks needed to get a final deal.”
More optimistic is a front-page analysis in the New York Times (9/9, A1, Stolberg), which reports that the “conventional wisdom” that healthcare reform “is on life support and that only a political miracle could revive it…might be wrong:” The Times adds that “critical players in the healthcare industry remain at the negotiating table,” and “despite tensions between moderate and liberal Democrats, there is broad agreement within the party over most of what a package would look like.”
At least 23 House Democrats have said they will oppose healthcare overhaul. The Hill (9/9, Soraghan, Gleeson) reports, “At least 23 House Democrats already have told constituents or hometown media that they oppose the massive healthcare overhaul touted by…Obama.” That means that “if Republicans offer the blanket opposition they’ve promised,” Pelosi “can afford to lose only 38 members of her 256-member caucus and still pass the bill.”
The Hill (9/1, Alarkon) reports, “The House health bill would raise insurance premiums for seniors but save money for those who spend more on drugs, a CBO study found.” CBO director Douglas Elmendorf “said Medicare recipients would pay less out of pocket for prescriptions under the legislation. But for those who do not spend as much annually on drugs, the changes could result in higher insurance premiums without any added benefits.” The House bill “would increase drug insurance coverage under the Medicare Part D drug program by closing the ‘doughnut hole.’ … While the proposed changes would lead to lower drug costs for some Medicare beneficiaries, the push to increase coverage would increase costs for drug and insurance companies, resulting in higher drug benefit premiums for seniors. The average premium would increase by approximately 5 percent in 2011 and by 20 percent over the next decade.”
The Boston Globe (8/22, Lazar) reported, “Massachusetts has the most expensive family health insurance premiums in the country,” according to a report by the Commonwealth Fund. The analysis revealed that “the average family premium for plans offered by employers in Massachusetts was $13,788 in 2008, 40 percent higher than in 2003.” Meanwhile, “premiums nationwide rose an average of 33 percent.” The report also “projects that without significant cost reforms, an annual family premium in Massachusetts will soar to $26,730 by 2020.” But, the report noted that “costs do not eat as big a hole in the typical family budget as in most other states,” because “household income in Massachusetts is much higher than the national average.” The state’s “landmark 2006 law that mandated coverage for nearly everyone,” is “often cited as a model for a national healthcare overhaul,” and “advocates on various sides of the issue said the report underscores the urgency of including cost controls in any large-scale federal or state overhaul.”
Media reports on the healthcare debate continue to paint a grim picture of the President’s reform push. The White House is being cast as beset by conflicting agendas in the House and Senate, and comments Sunday by Sen. Joe Lieberman (D-CT) are being interpreted as a signal that Senate moderates may in the end not be on the President’s side. A senator “counted on by Democrats in the healthcare debate showed signs of wavering,” says the AP (8/24, Daniel). ABC World News (8/23, story 3, 2:10, Harris), the only network newscast that aired Sunday, reported that the goal of “universal health coverage…seems as illusive as ever.” ABC’s Cochran added that on the issue of bipartisanship “the President appears to have intentionally sent conflicting signals. Fearful of losing liberals in the House, the White House says he wants an option for government-run insurance. Fearful of losing moderates in the Senate, the President signals he is willing to consider other options.”
USA Today (8/24, Fritze) says that “lawmakers said Sunday that…Obama must scale back ambitious plans to overhaul healthcare because ballooning budget deficits are undermining support for more comprehensive and costly legislation.” USA Today adds that “even Democrats in Congress said that whatever healthcare bill emerges this fall will have to cost less than the $1 trillion price tag contemplated earlier this year.” Sen. Kent Conrad (D-ND) said on CBS, “It’s going to have to be significantly less than what we’ve heard talked about. … We’ve got to have the deficit reduced as a result of this effort. That is absolutely imperative.”
Asked on CNN’s State of the Union (8/23, King), “Is it time for the President to hit the reset button” and back a more modest reform package, Sen. Lieberman answered, “In a word, yes. I give the President tremendous credit for taking on the healthcare problem,” but “he took it on at a very difficult time that was not of his making. In other words, we’re in a recession.” Later, Lieberman added, “I think it’s a real mistake to try to jam through the total healthcare reform plan that the public is either opposed to or of very, very passionate mixed minds about. It’s just not good for the system, frankly, it won’t be good for the Obama presidency.”
The New York Times (8/24, Berger, Henry) reports that “Lieberman’s comments could further complicate Democratic efforts to get a healthcare overhaul passed in Congress. They had been depending on the independent senator to support their efforts, even though he often aligns with Republicans.” AFP (8/24), the Washington Times (8/24, Lobianco), and the Wall Street Journal (8/24, A4, Fields, subscription required) also cover the story.
The Oregon State run plan denied this subscriber the drug Tarceva. The private market covers the cost of this drug. We looked at two major carriers to see whether the drug is covered and it is. Take a look at the video.
With the private market you have a voice and a choice. With a state run plan there is no where to go.
This report is from Milliman. Milliman reviews claims data and provides analysis. Over the last several years there has been Medicare funding cuts in the federal budget. Well, when that money is cut from the budget hospitals and providers have to make it up from private plans. This is called cost shifting. There is no negotiating with Medicare. Doctors and Hospitals have to accept these below market reimbursement rates. So when you hear someone say if we had a single payer, the US would save 30%. If that would happen we would see a reduction in wages for doctors, nurses, staff, and hospitals. Hospitals would operate at a deficit. People will see rationing because in this type of system you have no choice and no voice. Hospitals and doctors will ration care based on the payment reductions. Obama calls these efficiencies. Remember, as much as we would like to say that Healthcare is not a business, we do have cover costs. Profits fund new technology, expansion, and staff training to name a few things. The other aspect that gets lost is the innovation of the US medical system. We support the world with innovation.
Here are items that you need to take into consideration with the public option and why it would lead to a single payer system.
1. Medicare cost shifts 30% to private plans and public option would be set at Medicare rates. So we will see more cost shifting. The gap between premiums would grow.
2. Taxes for private insurance would not be in the public option. This makes the public option cheaper. Since these taxes go to fund Firehouses, schools, social programs, etc where will the legislators go to find a new source of tax revenue.
3. The public plan would not have to provide state mandated benefits which increase the cost. Some of the mandates are Autism coverage, Diabetic Supplies, IVF, and others.
Our system may not be perfect but we do have a voice and choice. Please take a look at the report on Medicare Cost Shifting.
The Washington Times (8/7) editorializes that Daniel Hannan, member of the European Parliament, “made a convincing case that the American healthcare system is far superior to the British one, and thus should not move down Britain’s path toward government control.” The Times notes, “It’s his advice that we should not buy into the notion of establishing a state-run system as just one option competing for business. ‘It expands and expands until it squeezes out every other system,’ he said.” The Times concludes, “The system we Americans already enjoy is the best in the world. Allowing the state to take over the immensely personal realm of healthcare could strike a mortal blow against the liberty we hold dear.”
Posted by Mike Braun 
Posted by Mike Braun 
Posted by Mike Braun 
