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Healthcare Reform Update - September 10-16, 2009

 

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Compiled by Scott Mertie*

September 16, 2009

Senate Health Bill On The Floor Within Two Weeks
By Eric Pianin, KHN Staff Writer
September 14, 2009

Senate Finance Committee Chairman Max Baucus, D-Mont., will unveil his long awaited health care overall bill by midweek and told reporters this morning that the overall cost would come in below $880 billion over the next 10 years, about $20 billion less than the price tag used by President Barack Obama in a major speech to Congress last week.

The Finance Committee could begin work on the bill as early as next week, according to Senate leadership aides, and then it would be melded with a second bill approved earlier this summer by the Health, Education, Labor and Pensions Committee for action on the Senate floor the following week.

Baucus has been negotiating for months with a small group of key Democrats and Republicans in hopes of drafting a bipartisan bill that might become the template for a final agreement later this fall, although there are still no firm signs that any of the three Republicans—Charles Grassley of Iowa, Mike Enzi of Wyoming and Olympia J. Snowe of Maine—will sign onto the bill. Baucus emerged from a morning meeting with the so-called "Gang of Six" declaring that the group was making good progress and that "we're working towards a bipartisan solution."

The remaining sticking points in the negotiations include Medicaid funding, immigration, medical malpractice, abortion and more general affordability issues, according to senators and aides.

One of the biggest problems is working out a compromise with governors over sharing the cost of Medicaid coverage over the next 10 years. Baucus and Senate Budget Committee Chairman Kent Conrad, D-N.D., said that the negotiators have come up with a possible solution for easing the cost burden of the states that they will discuss with governors in a conference call tomorrow. Conrad said that the "vast responsibility" for the cost sharing should fall to the federal government.

Negotiators are also working on language that would make it emphatically clear that illegal aliens would not be able to obtain health care coverage under the program and that the government would experiment with Medicare malpractice pilot projects to try to bring down the cost of malpractice verdicts and settlements—a major initiative of the Republicans and one that Obama said has merit.

Last week, Baucus released a framework of possible legislation that would cost less than $900 billion over 10 years, that would impose new fees on insurers and that would create a network of consumer-owned insurance cooperatives.

Today, Conrad said that the emerging Finance Committee bill would be fully paid for, meaning it wouldn't add to the federal budget deficit, and that an analysis by the Congressional Budget Office pegged the total cost at below $880 billion.

The Baucus framework does not include a public insurance option—an initiative favored by the president and many liberal Democrats in the House but is opposed by virtually all Republicans and many moderate to conservative Democrats in the Senate. Many Americans spoke out against a public option during town meetings in August, and polling shows that Obama would have a much better chance of passing legislation this fall if the Democrats dropped the proposal from their legislation.

Obama's Speech Leaves Room For Snowe's Compromise To Put Off Public Option
By Eric Pianin and Mary Agnes Carey, KHN Staff Writers
September 10, 2009

By signaling his flexibility last night on a government-run insurance plan, President Barack Obama gave new impetus to a fallback "trigger" approach that some believe could be essential to passing health care legislation this year. In a nationally televised speech to a joint session of Congress, Obama said he would attempt to "keep insurance companies honest" by creating a not-for-profit public alternative to compete with them. But the president stressed that the public option was only a means to the end of eliminating discriminatory practices by insurers and making health coverage more affordable. "And we should remain open to other ideas that accomplish our ultimate goal," he added. One alternative under serious consideration, strongly promoted by Republican Sen. Olympia Snowe of Maine, would hold the public plan in reserve, activating it only if affordable insurance wasn't made available to most Americans by the time the legislation is fully implemented in 2013. Some political analysts and health care experts say this fallback approach might be the best way for Obama and Democratic leaders to navigate the treacherous political waters of health care and get something enacted this year.

"If this trigger mechanism is what stands between getting a health reform plan and not getting one, it would be worth doing under those circumstances," said Paul Van de Water of the Center on Budget and Policy Priorities, a left-leaning Washington think tank. "It would not produce a terrible result, but it would be less than [the public option] advocates want."

Robert Moffit, a health policy expert at the conservative Heritage Foundation, said the trigger is a bad idea that has little to do with reducing the number of uninsured and making coverage more affordable and much to do with government's effort to assert more control over health care financing and delivery.

"The reason why this whole thing is happening is that proponents of the public plan can't win this debate," Moffit said. "They want to set up this mechanism that will . . . automatically get what they can't win today sometime tomorrow."

In recent months, Obama has come under intense pressure from opposing factions within his party to take a firm stand on the public plan. Liberal Democrats say such a government-run insurance plan is essential to guaranteeing affordable insurance to most Americans. But many moderate and conservative Democrats agree with Republicans that a government-run plan would be a dangerous precedent that could undermine private insurers.

In his speech, Obama said, "I have no interest in putting insurance companies out of business" but that "I just want to hold them accountable" while making health insurance available to those who can't afford it. "It's worth noting that a strong majority of Americans still favor a public insurance option of the sort I've proposed tonight," he said. "But its impact shouldn't be exaggerated—by the left, or the right or the media. It is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles."

He said he would remain open to other ideas that accomplish his goals, and urged Republicans to work with him to address their concerns, "rather than making wild claims about a government takeover of health care."

In a specific reference to Snowe's trigger proposal, Obama said that "some have suggested that the public option go into effect only in those markets where insurance companies are not providing affordable policies." Others, he added, have proposed "a co-op or another non-profit entity to administer the plan. These are all constructive ideas worth exploring. But I will not back down on the basic principle that if Americans can't find affordable coverage, we will provide you with a choice."

Proponents have long argued that without the competitive pressure of a public option, private insurers would resist calls to lower premiums and eliminate such discriminatory practices as denying coverage to older Americans or people with pre-existing medical conditions. But with most Republicans and many moderate Democrats adamantly opposed to increased government involvement in the insurance market, Snowe and others insist that a trigger would be a reasonable compromise.

"I think it's a good means of ensuring that people have access to affordable plans, ultimately," Snowe said in an interview earlier this week. "It does inject a measure of competition but it also creates incentives because you know it's there."

Here's how a trigger would likely work: Health care legislation would create a non-profit government corporation to assess what health insurance options are available to residents, how much those policies cost and whether they would be affordable to 95 percent of residents of every state in the country. It would be up to Congress to determine what was affordable, and lawmakers likely would set state-by-state, sliding-scale thresholds based on income and census data. If affordable coverage were not available to 95 percent of a state's residents, the government entity would give insurers a second chance to offer coverage at affordable rates. If they failed to do so, the agency would contract with hospitals, physicians and other health care providers to create a government-sponsored health insurance plan designed to help reach that 95 percent target. The government entity overseeing this public option would negotiate payment rates with doctors, hospitals and other health care providers that would likely be higher than those offered by the Medicare or Medicaid programs.

Snowe has conferred repeatedly with Obama and White House officials in the past week to try to work out the details of a trigger that would achieve several important goals: finding a way to placate conservative critics of the public option without alienating the president's liberal base; using the threat of a public option to force the insurance industry to make reforms without forcing Democrats from conservative swing districts to vote for a bill with a public option, and keeping Snowe on board the health care overhaul effort in the face of what appears to be near-unanimous Republican opposition to comprehensive legislation.

Snowe said in an interview with MSNBC yesterday that she agrees with her Republican colleagues that a public option should not be part of the health care legislation, and that she had proposed the trigger to Obama as a way of breaking a political deadlock and moving the legislation along.

Several Republicans supported creation of the Medicare prescription drug benefit in 2003, which included a trigger provision that never went into place because the payment rates were high enough in the bill to lure insurers to offer coverage throughout the country. Many of those Republicans remain in Congress today and may take comfort in their earlier vote and the experience of the Medicare drug bill.

But the approach is far from cut and dried, and critics see many problems in working out the details. Some fear that, over time, political pressures could force the trigger mechanism to be used more than intended, which could disrupt market forces and possibly increase health insurance costs. Sen. Ben Nelson, a centrist Democrat from Nebraska whose vote is being eagerly sought by the Obama administration, has said he might go along with health care legislation with a public option trigger, provided it wasn't "a hair trigger" easy to pull.

Creating a trigger could cause problems in the marketplace, said Dean A. Rosen, who was chief health care advisor to former Senate Majority Leader Bill Frist, R-Tenn.

"I worry that once you have that mechanism in place it could be triggered by the government or by Congress in the future by lower criteria or different criteria.," he said. "What happens once the government comes in after a certain number of years? If it went away how would it go away? If it went away would that be disruptive to coverage?"

Some insurers worry that provisions in the pending health care bills, such as those limiting an insurer's ability to vary premiums by age or proposed fees on industry, may make policies more expensive for people to buy. "There are a lot of pieces that are important and if things aren't designed properly it's going to have an affordability problem," said Alissa Fox, senior vice president, office of policy and representation, for the Blue Cross and Blue Shield Association. "There are a lot of moving pieces here that have to work, so we're very wary of the trigger."

But proponents of a trigger say that putting a public option in place immediately could lead to fewer rather than more choices for consumers. In smaller states where one insurer may currently have a large share of the market, inserting a government-run public plan would provide little incentive to insurers to enter the market because they would fear that they could not compete against a well-established insurance carrier and the federal government. A February 2009 Government Accountability Office report found that, when combined, the five largest carriers in the small group market represented three-quarters or more of the market in 34 of the 39 states that participated in the GAO survey. Those companies represented 90 percent or more of the market in 23 of those states, GAO found.

House Speaker Nancy Pelosi, D-Calif., has repeatedly declared it would be impossible to pass a bill in the House that doesn't include a strong public option. And she has warned that the insurance industry would be better off accepting a public option now rather than taking a chance on facing a "tougher" public option down the road under a trigger mechanism.

But several senior House Democratic aides predicted this week that Pelosi and other House Democrats would support the trigger approach if it becomes clear there's no other way to enact legislation this year. "At the very end of the day, she and other House Democrats would go along with a trigger if that were the price of getting comprehensive legislation passed," said one Democratic aide.

Obama's Malpractice Proposal Falls Flat For GOP And Democratic Contributors
September 15, 2009

Trial lawyers have used lobbying and fundraising clout to avert malpractice reform for decades, reports Politico. "Given that their political donations went overwhelmingly to Democrats—generally, by a 3-to-1 ratio—this should be a period of respite. But it won't be, now that President Barack Obama has injected tort reform into the health care reform debate" (Cummings, 9/15).

The New York Times asks whether the likely inclusion of malpractice reforms will squelch contributions from lawyers. "Time will tell, of course. But so far in the 2010 election cycle, lawyers and law firms have given incumbent members of Congress more money than any other industry has given—$13.8 million, according to the Center for Responsive Politics." So far, 84 percent of those contributions have gone to Democrats (Seeyle, 9/14).

The tort reforms Obama proposed came in an address to Congress last week. The president said his health department would test such reforms in demonstration projects. Doctors and Republicans asked why the efforts required demonstrations, given that many states have already adopted variations of medical malpractice reform, FOX News reports (9/14).

The Washington Times reports that the president "managed to disappoint both Republicans, who saw it as an empty gesture, and trial lawyers, who felt betrayed by a Democratic ally." Obama's proposal was first suggested by President Bush, and includes giving states funding for alternative, malpractice courts to settle claims. Republicans nevertheless "balked that the president's plan was a tactic to delay more sweeping reform measures" (Miller, 9/15).

Early News Reports Suggest Those With Entrenched Views Were Not Swayed By Speech
September 10, 2009

A new poll, conducted before President Barack Obama's speech Wednesday night, finds rising unhappiness with his handling of health care.

The Associated Press reports: "Public disapproval of President Barack Obama's handling of health care has leaped to 52 percent, according to Associated Press-GfK poll that underscores the country's glowering mood as the White House made a renewed pitch for an overhaul. Just 42 percent approve of the president's work on the high-profile health issue. The survey was released Wednesday before his nationally televised effort to persuade Congress and voters to back his drive to reshape the nation's $2.5 trillion-a-year medical system. Spotlighting how Obama lost ground this summer, his latest approval figures on health were essentially reversed since July, when 50 percent approved of his health effort and just 43 percent disapproved. The poll was taken over five days just before Obama's speech to Congress" (Fram, 9/9).

Meanwhile, several newspaper report on people reaction's to the president's speech.

The Washington Post/AP reports: "While some were moved to tears by the president's soaring rhetoric, others were moved not at all. Where some saw a new clarity, others saw more vagueness. And while some praised him for reaching out to Republicans, there were those who felt he was overreaching in some ways and not reaching far enough in others. Americans listened intently to President Barack Obama's much-anticipated speech on health care reform Wednesday night, and not surprisingly, their reviews varied. Few said they had changed their minds" (Breed, 9/10).

The San Jose Mercury News reports "that his words had inspired Bay Area supporters of reform—from Silicon Valley's Democratic congressional delegation to average folks—while opponents said he did nothing to change their minds. 'He dispelled a bunch of tsunami lies and the tsunami sound bites that are on the airwaves,' said Alberto Carrillo of San Jose, a 40-year community activist. 'I really think the Latino community is going to buy into what the president said tonight'" (Goldston and McLaughlin, 9/9).

Kaiser Health News interviewed eight Americans about their reactions to the president's speech and focused on whether the speech was persuasive and how the president's proposals may affect those people and their families (9/10).

The Washington Post reports on reaction in Northern Virginia: "In Stafford, as in other Northern Virginia exurbs, Obama had surprising electoral success during last year's presidential contest. . . . But Obama's personal appeal in the region has not translated into support for health-care reform, according to a Washington Post poll showing that voters here mirrored those nationally in their divide on the issue. Overall, 49 percent of residents of Northern Virginia's exurbs called health-care reform a worthy effort, and 48 percent said it would do more harm than good" (Rucker, 9/10).

The Tennessean reports that many locals remained unswayed by the president's speech and "fear it will lead to a costly government take over of health care" (Broden, 9/10).

The New York Times reports on people's reaction from South Florida to Washington State (9/9).

Wall Street Journal found that people are sympathetic, but worry about the cost of health care reform (Belkin, Esterl and Johnson, 9/10).

Baucus Works To Iron Out Medicaid, Abortion, and Costs In Health Reform Bill
September 15, 2009

Sen. Max Baucus is addressing the final questions in his Senate Finance Committee health care reform bill and plans to offer it Wednesday, opening the way for a committee vote next week and a floor vote the week after.

CongressDaily: "Baucus and his group of five other senators have a list of about 12 to 15 member concerns with the bill that they need to work to clear up, Senate Budget Chairman Kent Conrad said Monday. Baucus met with Finance Committee Democrats Monday evening to discuss their issues. . . . One of the thornier issues remaining to be worked out with Republicans is abortion and language that would prohibit the use of federal funds for them. Baucus said Monday the group of six negotiators is looking at an amendment adopted by the House that would explicitly prohibit using federal dollars to fund abortions. . . . The Senate negotiators also will talk with governors later (Tuesday), which is part of the reason for the mark coming out Wednesday instead of today, to assuage fears that their already stretched budgets will not be able to handle the Medicaid expansion that will be part of the overhaul. Baucus was not specific but said the senators are 'pretty satisfied' with the expansion" (Edney, 9/15).

Bloomberg: "Baucus wants to expand Medicaid so that those making below 133 percent of the federal poverty level qualify, with states and the federal government sharing in costs. States would pick up a greater share of the cost over time. Baucus said yesterday governors will find that the impact on states won't be as large as initially expected. 'The Medicaid expansion won't cost states nearly as much as they initially feared,' he told reporters" (Litvan, 9/15).

The Wall Street Journal: "Conrad (D., N.D.), a key senator in the negotiating group, said the bill would cost less than $880 billion. Mr. Baucus confirmed that the nonpartisan Congressional Budget Office told the group the overall price tag for the proposal was lower than earlier estimated, but said that it is 'still moving a bit'" (Yoest, 9/14).

The New York Times: Baucus said he'd "include in his bill a proposal by the Obama White House to bar illegal immigrants from buying health coverage through a new insurance marketplace, or exchange, even if the illegal immigrants were willing and able to pay the full cost. The White House said that hospitals would still be required to provide emergency treatment to illegal immigrants and that the federal government would continue to reimburse hospitals for unpaid bills, a cost that now runs $250 million a year" (Herszenhorn, 9/14).

The Associated Press: "The three Republicans—Mike Enzi of Wyoming, Chuck Grassley of Iowa and Olympia Snowe of Maine—are under intense pressure from leaders of their own party, some of whom have publicly dismissed Baucus' framework as a Democrat's plan. Baucus may not be able to get any of them to agree. But all three have invested much time and energy in the talks, and Baucus seems to have a chance of persuading at least Snowe" (Werner and Alonso-Zaldivar, 9/14).

Roll Call: "But courting the GOP Senate trio has proven difficult. The White House and Senate Democrats are willing to have an exclusive relationship with Snowe, but she doesn't seem so sure herself and appears to prefer safety in numbers. Asked Monday how important it was for Grassley and Enzi to support the package as well, Snowe said, 'I think it's important for us to reach a consensus within the group, if that's at all possible'" (Pierce and Drucker, 9/15).

The New York Times reports that Enzi and Grassley "have requested numerous major changes" in the proposal. The Times adds: "A summary of the senators' views, prepared by the Finance Committee, says Mr. Enzi believes that the federal government should pay '100 percent of the cost of the Medicaid expansion, in order to avoid an unfunded mandate' for states, which ordinarily share Medicaid costs with the federal government. Mr. Enzi and Mr. Grassley have also objected to the fees that Mr. Baucus wants to impose on health insurance companies, clinical laboratories and manufacturers of medical devices. Such fees would help finance coverage of the uninsured" (Pear and Herszenhorn, 9/14).

The Washington Post: "But the chairman said Monday night that he will move forward Wednesday with or without Grassley, Enzi and Snowe, the most moderate Republican involved in the negotiations. He said the bipartisan group, known as the Gang of Six, would continue to negotiate until the full committee begins work on the bill next week" (Montgomery and Murray, 9/15).

This information was reprinted from kaiserhealthnews.org 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 Scott Mertie, Esquire (Kraft Healthcare Consulting LLC, Nashville, TN), for selecting the articles for this week's update.

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