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Healthcare Reform Update - February 18-24, 2010


Email Alert

February 24, 2010

Compiled by Brian Betner*

Obama Builds On Senate Health Bill In Hopes Of Broader Support
February 23, 2010

President Barack Obama's health care proposal, an effort to resuscitate the debate, merges the separate legislation passed in the Senate and House "into a final version that could pass muster in both chambers," The Washington Post reports. "Obama's proposal takes the more modest Senate bill as his basic framework. But, in what is perhaps his proposal's most notable feature, he scales back the Senate bill's main revenue source, a tax on high-cost insurance that he has strongly supported. Instead, he would impose a new tax on the unearned income of the wealthy" (MacGillis and Goldstein, 2/23).

The proposal would change the definition of high-cost "Cadillac" health plans from $23,000 for families in the Senate version to $27,500, USA Today reports. It also increases fees to drug manufacturers and adds a 2.9 percent tax on investment income from $200,000-plus earners to help pay for Medicare. It would charge employers (with over 50 workers) $2,000 a year for each employee without coverage who ends up receiving federal subsidies. The plan would take a deeper bite out of Medicare Advantage premiums than the Senate bill and strip out certain special deals, such as a provision that favored Nebraska's Medicaid program (Fritze, 2/23).

The New York Times : "The director of the Congressional Budget Office, Douglas W. Elmendorf, said on Monday that the White House had not provided enough detail about President Obama's health care plan for the C.B.O. to make a full analysis. . . . Senior White House officials said that they expected the insurance coverage provisions in the president's plan would cost $950 billion over 10 years and that by 2019 the proposal would extend coverage to 31 million people who are currently uninsured" (Herszenhorn, 2/22).

Los Angeles Times : "The package could also include traditional Republican healthcare priorities, including new efforts to clamp down on waste and fraud in government healthcare programs. The extent to which GOP ideas are incorporated could depend on the outcome of Thursday's summit. Even without GOP support, Democrats believe that the package could be advanced through a process known as budget reconciliation, which requires only 51 votes in the Senate . . . " (Levey, 2/23).

The (Mont.) Missoulian has an analysis of the major elements of the proposal, which also include a plan to close a coverage gap in the Medicare drug program, known as the "doughnut hole," and increases Washington's power to control insurers' premium rates (Dennison, 2/22).

The Minneapolis Star Tribune also offers a primer (2/22).

The plan seeks support from state officials, Health News Florida reports. "The President's proposal would pay 100 percent of the cost of Medicaid for newly eligible recipients from 2014 to 2017, 95 percent through 2019 and 90 percent for 2020 and thereafter. In effect, it extends the favorable treatment that had been accorded to Nebraska in return for the vote of Sen. Ben Nelson to all the states" (2/22).

The proposal reaffirms a provision to create a long-term care insurance program, including the disability insurance program known as the CLASS Act," McKnight's reports (2/23).

Read the full text of the president's proposal, as released yesterday by the White House (Kaiser Health News, 2/22).

The White House Weighed Political Risks In Health Plan Calculation
February 23, 2010

The Washington Post : "The president's proposal is striking for the extent to which it hews to the basic scale and framework of the bills on which Congress has toiled for months. That decision--to go big one last time, rather than small--emerged quickly inside the White House after senior advisers to President Obama concluded privately that his goals for comprehensive changes to the health-care system could not be done piecemeal" (Kornblut and Shear, 2/23).

"Continued pursuit of a comprehensive health-care overhaul had been uncertain following the victory last month of Republican Scott Brown," of Massachusetts, who opposes the health overhaul, The Wall Street Journal reports. Key advisers, including Chief of Staff Rahm Emanuel, pushed the president to consider a less ambitious plan in the wake of that loss, and Obama publicly considered it. But, "[t]he proposal, unveiled Monday, reaffirmed Mr. Obama's support for the policy's sweeping objectives: expanding health-care coverage to some 30 million Americans, new efforts to control health spending and new rules for health insurers (Meckler and Weisman, 2/23).

But, it's unclear whether the big gamble will succeed in moving health legislation. "[B]y day's end, President Barack Obama was staring down all the same old problems," Politico reports. Republicans "called it more of the same drafted-behind-closed-doors policy that Americans dislike and continued to push for Democrats to start with a blank slate--a demand Obama has emphatically rejected."

"And Obama's plan did nothing to answer the central question facing Democrats: how to get a bill through the Senate--now one vote shy of a filibuster-proof majority--in one of the most toxic environments for incumbents in recent memory" (Brown and O'Connor, 2/22).

The Christian Science Monitor : "Within moments of the release of President Obama's healthcare plan Monday morning, top Republicans came out swinging." The top Senate Republican, Mitch McConnell, of Kentucky, criticized the proposal because it "further expands the role of government," while his House counterpart, John Boehner, R-Ohio, said the plan "crippled the credibility of this week's [health care] summit by proposing the same massive government takeover of healthcare" that Congress has considered (Feldmann and Chaddock, 2/22).

McClatchy/Miami Herald: "Democratic loyalists were enthusiastic, viewing Obama's nearly $1 trillion proposal as a sign that his yearlong reluctance to engage in shaping the bill had ended. . . . Obama's blueprint, or a bipartisan summit to discuss healthcare scheduled for Thursday, seemed unlikely to trigger a new bipartisan effort to pass a bill, however" (Lightman and Thomma, 2/23).

The Associated Press: "Many Democrats said that despite all the bad-news polls and the loss of their filibuster-proof Senate supermajority in a special-election upset, it would still be better to pass a sweeping bill than make small changes or none at all" (Werner, 2/23).

In a separate story, The Wall Street Journal explains more details about the "legislative contortions" and "adjustments" that would be necessary in order for Democrats to use budget reconciliation process to navigate around a filibuster (Hitt, 2/23).

GOP Plans To Attend Health Summit As Obama Calls For Compromise
February 22, 2010

President Barack Obama warned during the weekend that both Republicans and Democrats should be careful not to turn this week's health care summit into "political theater" but to work to find "common ground" on the issues, The Washington Post reports. "The Thursday event, scheduled to be televised live on C-SPAN, could prove a pivotal moment in the year-long effort to overhaul the health-care system. . . . While the parties agree broadly that the health-care system is broken, they have found little consensus on more detailed questions, such as how best to provide insurance to people who don't have access to affordable coverage through an employer. Obama's plan is expected to provide subsidies to people who can't afford coverage, incentives for businesses to offer insurance and expanded Medicaid coverage for the poor" (Murray and Shear, 2/21).

Politico : "And yet Obama is unveiling a health care bill just days before the six-hour summit that wouldn't require a single GOP vote, with plans to short-circuit the Senate rules and push it through without Republicans if necessary. That's left some Republicans angrily questioning whether the summit is a sham and even Democrats uncertain and noncommittal." Democrats are using the summit as a way to get Republicans to talk and "to debunk many of the GOP's talking points about their bill by walking viewers through shortfalls in the Republicans' own legislation; for example, the House GOP bill covers about 3 million uninsured Americans while the Democrats' bills would cover more than 31 million" (O'Connor, 2/22).

The Los Angeles Times reports that GOP senators, who were publicly questioning their summit attendance, have decided to participate despite reservations--"but the chamber's GOP leader is far from resigned to the Democrats' idea of cooperation on the hot-button issue." Senate Republican Leader Mitch McConnell said Sunday that Democrats were still acting "arrogant" in not tossing out reforms that have passed before and starting over. "Asked if the Republicans would slow down the consideration of health reform, McConnell said there were 'a variety of different options available'" (Parsons, 2/21).

Roll Call : "House Republican Conference Chairman Mike Pence (Ind.), who was not invited to attend the meeting with President Barack Obama at Blair House on Thursday, said on NBC's 'Meet the Press' that Democrats should scrap the House and Senate bills and use the summit to start over. . . . 'But what we can't help but feel like here is that the Democrats spell summit S-E-T-U-P and all this is going to be just some media event used as a preamble to shove through Obama care 2.0. We aren't going to have any of it'" (Kucinich, 2/21).

The Washington Times : "But with the White House expected to release a plan it hopes Democrats can support and Republicans firmly opposed to any of the Democrats' proposals, few health policy experts or lawmakers expect the summit to lead to policy compromises. . . . Republicans have steadfastly opposed a large comprehensive bill and prefer a step-by-step approach that includes proposals such as tort reform and allowing insurers to sell across state lines. They have several small-scale bills" (Haberkorn, 2/22).

Fox News on McConnell's comments on using budget reconciliation to pass reform and the summit: "'You know, we've witnessed the "Cornhusker kickback," the "Louisiana purchase," "the Gatorade," the special deal for Florida. Now they are suggesting they might use a device which has never been used the for this kind of major systemic reform. We know it would be--the only thing bipartisan about it would be the opposition to it,' he said" (2/21).

Los Angeles Times , in a news analysis: Obama "is struggling with the consequences of one of his most important early decisions: letting Congress take the lead in designing his signature policy proposal. . . . That's one reason Obama has called a healthcare summit this week--to try to renew the debate on more pristine terms. Even if nothing comes of the talks, they are designed to spotlight on national television precisely the bipartisan, high-minded debate that Congress' year-long process was not. . . . Critics fault Obama and Congress for taking so long with the task, pointing to the standard set by President Lyndon B. Johnson, when such landmark measures as Medicare and the Voting Rights Act were passed seven months into 1965. . . . At the healthcare summit Thursday, Democrats hope to neutralize complaints that the process so far has been too partisan and secretive. But hardly anyone in Washington expects major decisions or compromises to be made on camera" (Hook, 2/22).

Public Option Again Gains Steam; Cadillac Tax Would Fall Equally On Non-Union Plans
Feb 22, 2010

The public option is gaining steam again, while a new study on the "Cadillac tax" suggests it would fall equally on union and non-union health plans.

"The recess week ended up providing liberal activists and their allies on Capitol Hill with a surprise opportunity to breath life into the proposal to create a government-run health insurance plan--a proposal that had been declared all-but-dead two months ago," The Hill reports. "Ironically, it's a shift that would have been unthinkable before Sen. Scott Brown (R-Mass.) won the late Sen. Edward Kennedy's (D-Mass.) seat in a special election last month." Without the crucial 60th vote to overcome a Republican filibuster, Democrats are turning to reconciliation, which requires only 51 votes and may give liberals an opportunity to insert the public option again.

"Over the course of three days, 18 Democratic senators signed on to Sen. Michael Bennet's (D-Colo.) Wednesday letter to Majority Leader Harry Reid (D-Nev.), requesting a floor vote on the public option should the upper chamber consider a healthcare reconciliation bill. . . . Even Reid appears to be on board." His office issued a statement Friday indicating Reid would "bring the public option to the Senate floor." In addition, the "Obama administration appears to be ready to give it a go. 'If it's part of the decision of the Senate leadership to move forward, absolutely,' Health and Human Services Secretary Kathleen Sebelius said on MSNBC Thursday" (Young, 2/20).

Meanwhile, a new analysis studies another hot-buttom reform issue--the so-called "Cadillac tax" and finds that "the conventional wisdom about the tax [on high-cost insurance plans] is wrong: The tax would actually fall equally on nonunion plans," The Washington Post reports. "At least 80 percent of the workers whose plans would be subject to the tax in 2019 would be in nonunion jobs, according to the analysis by Ken Jacobs of the University of California at Berkeley Labor Center and William H. Dow, a professor of health economics at Berkeley who was a member of President George W. Bush's Council of Economic Advisers. This impact is roughly in line with the overall breakdown of nonunion vs. union workers with employer-provided plans. And it would be true under both the version of the tax passed by the Senate and a more labor-friendly one the White House agreed to last month" (MacGillis, 2/22).

Governors On Health Reform: "We Want In"
February 22, 2010

"Some governors, frustrated by halted federal efforts to overhaul the U.S. health-care system" and by lingering budget shortfalls deepened by rising health costs, "are introducing their own changes at the state level," The Wall Street Journal reports. While some states, such as Massachusetts, have already taken on health care, others, such as Colorado, Pennsylvania and Republican-led Utah, are now tackling the issues, including cost. "Some governors suggested they may be better equipped to work with one another on health care than congressional leaders who have been at an impasse over federal legislation" (Thiruvengadam, 2/22).

Governors continue to worry that some federal "reform proposals could deepen the budget woes that many states face," Reuters reports, adding: "Medicaid, the healthcare program for the poor jointly administered by the states and government, is already one of the largest single budget items for many states. Governors fear more people will be forced to rely on the program if they are compelled to get health insurance." The governors, who were meeting in Washington this weekend, plan to present that concern to President Obama Monday. But, "[o]n the other hand, they also fear that doing nothing will also worsen their financial situations" (Lambert, 2/21).

Governors also used this weekend's meeting to tout "progress in their own jurisdictions to reduce healthcare costs and improve quality," according to Modern Healthcare . Gov. Deval Patrick challenged other states to catch up with Massachusetts' rate of insurance coverage, 98 percent. And, "Pennsylvania Gov. Edward Rendell said his state now requires that emergency department facilities provide a non-emergent care facility that's accessible around the clock," which saves money (Lubell, 2/21).

NPR interviewed Gov. Gary Herbert, R-Utah and Gov. Joe Manchin, D - W.Va., who said: "We've got to change health care. Health care has double digit inflation for every state. I don't believe that we've bottomed out as states. We know we have tougher times ahead of us." Herbert said: "I think some of the concerns that we have in Utah and other states is the overreach of the federal government. It's not like we're looking for anything. In fact, sometimes we're looking just, you know, kind of stay away" (Lyden, 2/21).

This information was reprinted from with permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery . © Henry J. Kaiser Family Foundation. All rights reserved.

*We would like to thank Brian C. Betner, Esquire (Hall Render Killian Heath & Lyman, Indianapolis, IN), for selecting the articles for this week's update.

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