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Healthcare Reform Update January 14-20, 2010


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January 20, 2010

Compiled by Nicole DiMaria*

Republican Brown Wins Massachusetts Senate Seat
January 19, 2010

The Boston Globe: "Republican Scott Brown tonight pulled off one of the biggest upsets in Massachusetts political history, defeating Democrat Martha Coakley to become the state's next United States senator and potentially derailing President Obama's hopes for a health care overhaul." The race was called with 73 percent of precincts reporting. Brown had 53 percent of the vote to Coakley's 46 percent" (Viser and Estes, 1/19).

The New York Times : "The election left Democrats in Congress scrambling to salvage a bill overhauling the nation's health care system, which the late Mr. Kennedy had called 'the cause of my life.' Mr. Brown has vowed to oppose the bill, and once he takes office the Democrats will lose their filibuster-proof majority in the Senate." Beyond the health overhaul effort, the election outcome is also viewed as a reproach of President Obama's first year in office (Cooper, 1/19).

Los Angeles Times: "Even before the polls closed, Republicans received a bit of good news. Secretary of State William Galvin said he would declare an unofficial winner as quickly as possible. Senate rules require that a senator be certified by the state before he or she can be sworn in. Brown had charged that Democrats would stall as long as possible to allow Kirk to cast a vote in favor of the healthcare bill" (Oliphant and Barabak, 1/19).

The Washington Post : "Brown will give Republicans a 41st seat in the Senate, robbing Democrats of the filibuster-proof majority the party had used to pass President Obama's health care plan late last year. In the immediate lead-up to tonight's vote, Democrats . . . insisted that the party would move forward on health care but it is unclear whether that bravado will carry over in the coming days as the party seeks to deal with Coakley's stunning upset (Cillizza, 1/19).

Politico : Some House members were already saying Tuesday night that they were not interested in "approving the already-passed Senate version of health reform in the House," which was one of the often-mentioned strategies discussed when Brown's victory was only a possibility. An idea now being floated is "a two-step process--passing the Senate bill in the House in step one, then passing a second 'clean-up' bill to fix the things in the Senate bill that House members don't like." The Senate, Politico notes, would then use reconciliation to pass the clean-up measure so that it would only require 51 votes. "But the deep resistance to the Senate bill among many House members shows that even this legislative tactic would be difficult to pull off" (Budoff Brown and O'Connor, 1/19).

Health Reform: Divided Democrats Consider Next Steps
January 20, 2010

The Washington Post : "Unless Democrats can thread a very narrow legislative needle, Republican Scott Brown's upset victory over Martha Coakley in Massachusetts on Tuesday could lead to the collapse of a health-care bill that, only weeks ago, appeared close to becoming law." Though Democratic leaders have tried, in public, to be positive that the health bill "could remain on course," there are increasing concerns that moderates will now "begin to back away from the legislation, fearing its political effects."

Democrats met briefly after Coakley's concession and lawmakers said "they will spend the coming days considering an array of long-shot scenarios, each with serious downsides." Pelosi said that the House is unlikely to take up the Senate-passed version of the bill, which is one way Democrats could still pass a bill (Murray and Montgomery, 1/20).

The New York Times reports that the idea of pushing the Senate-passed plan through the House "was favored by some lawmakers and strategists as a way to quickly deliver the president a bill on a signature domestic achievement, since it would require just one final House vote." A second measure would be advanced to address remaining problems. But "Democrats now face decisions on whether to give up on the health care fight--an approach few lawmakers appear willing to entertain--or perhaps pull together a scaled-back measure and use special procedural rules that would eliminate the need for 60 votes in the Senate" (Hulse and Herszenhorn, 1/20).

The Wall Street Journal : "'The Senate bill clearly is better than nothing,' House Majority Leader Steny Hoyer (D., Md.) told reporters early Tuesday. Mr. Hoyer stressed that he wasn't predicting the House would approve the Senate bill as written. By late Tuesday, House Democrats signaled that would be a tall order" to convince House lawmakers to pass the Senate version of the health bill. Liberal Rep. Anthony Weiner (D., N.Y.) said Democrats should hold off on pushing ahead with health care for now. 'I don't think I can vote for the Senate bill, and I don't think there are the votes in the House for the Senate bill,' he said" (Adamy and Bendavid, 1/19).

The Hill reports on the possibility of a "proposal that the House would then pass a second measure making changes to the Senate bill. That measure could then pass through the upper chamber at a later date under special budgetary rules known as reconciliation, which allow legislation to pass with a simple majority" (Bolton, 1/19).

The Boston Globe : Some Democrats are also recognizing the "very real possibility the effort could collapse." But the differences in opinions among members of the caucus are quickly emerging. "'It would be wrong substantively and politically for Democrats to try to pass the bill despite the election,' said Representative Barney Frank, Democrat of Massachusetts. 'I think we now have to begin some negotiations over a different bill.' He said the next step should be to see whether Republicans will make good on their persistent offers to start anew on a bipartisan deal." Rep. Patrick Kennedy, son of Sen. Ted Kennedy, said he thought the best way forward would be to pass the Senate bill in the House and fix it later with reconciliation (Wangsness, 1/20).

Politico : Democrats' options now "are few, and extremely complex, mostly involving legislative tactics that would be difficult to pull off in the best of circumstances, let alone at a time when members are worried they could be the next Martha Coakley. . . . And already Tuesday night, Democrats were being forced to come to terms with the prospect that their decades-long goal of health reform might once again fall short, despite getting closer to becoming law than ever before" (Budoff Brown and O'Connor, 1/19).

The New York Daily News reports on other signs of division. "Prospects for President Obama's foremost legislative priority suffered a second body blow moments after Republican Scott Brown's win over Martha Coakley when Sen. Jim Webb (D-Va.) broke with his party. 'I believe it would only be fair and prudent that we suspend further votes on health care legislation until Sen.-elect Brown is seated,' said Webb, who squeaked into the Senate four years ago and faces a tough reelection race in 2012" (McAuliff, 1/20).

Los Angeles Times: Others are asking that jobs legislation and other priorities take center stage. "'It is really time now,' said Rep. Rick Boucher (D-Va.), 'for Democrats to shift their attention to issues that will enjoy broad public support.' Most worrisome for the party is polling data that indicates Obama's healthcare bill has helped turn independent voters--who fueled his presidential campaign to victory--into antagonists" (Hook and Levey, 1/20).

The Associated Press: "But David Plouffe, who directed Obama's presidential campaign, rejected calls to scrap the bill. 'We have a good health care plan,' he said. 'We need to pass that. We have to lead'" (Johnson and Sidoti, 1/20).

CongressDaily: Some House Democratic leaders remained steadfast. "'The reports of [healthcare reform's] death, as Mark Twain would say, have been exaggerated,' said House Democratic Caucus Chairman John Larson of Connecticut. 'So, we're going to move forward and we're going to pass healthcare reform,' he said" (Edney and House, 1/20).

Democrats Reportedly Settle Key Issues On Health Bill But No Final Accord Yet
January 16, 2010

Politico reports: "President Barack Obama and senior Democratic lawmakers closed in Friday on a final health care reform package, finishing a week of intensive negotiations on tax and coverage issues that had once threatened to derail the bill. . . . Obama and congressional leaders do not plan to negotiate through the weekend, signaling that they had wrapped up talks on major portions of the bill and were preparing to send it to the Congressional Budget Office for a cost estimate.

"'We've worked through the gamut of issues in great depth, but there are no final agreements and no overall package,' the White House said in a statement. 'The next step in the process is to evaluate the costs and savings associated with the various proposals for each tenet of the legislation.'"

Meanwhile, Politico reports, "at least one industry group is threatening to pull its support for the bill. Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, sent an email to board members saying the group would pull its endorsement if lawmakers reduced the proposed 12-year monopoly on biologic drugs as part of the health care deal" (Budoff Brown and O'Connor, 1/15).

Roll Call reports that a source says although "tentative deals on most major issues appear to have been worked out, . . . 'key' outstanding issues . . . concern abortion and immigration provisions" (Pierce, 1/15).

The Washington Post: Democratic leaders hope "to settle lingering disputes before Tuesday, when a special election in Massachusetts could hand Republicans their 41st vote in the Senate and the power to defeat Obama's top domestic initiative."

Democrats have begun plotting "a health-care strategy if they lose their supermajority in the Senate. Senate aides said House Speaker Nancy Pelosi (D-Calif.) has shut down talk of the most obvious option: avoiding the need for another Senate vote by having the House approve the Senate-passed version of the health bill, rather than merging the two and having each chamber vote again. Pelosi has repeatedly said she could not rally the votes" to approve the package. They have also considered delaying the process to seat Republican Scott Brown if he wins the office formerly held by the late Sen. Edward Kennedy, the Post reports. But "senior Senate aides acknowledged it would be difficult to justify a postponement long enough to push the health bill to final passage."

Others have said they could use the "fast-track procedure, known as reconciliation, that would permit the bill to pass the Senate with 51 votes. . . . But reconciliation would require lawmakers to start over, dismantle the bill and scale it back dramatically." (Montgomery, 1/16)

In another article, The Washington Post reports: Former president Bill Clinton Friday added his voice to the critics of the Senate health care bill's provision to give Nebraska a special deal in which the federal government would "pay forever for extra poor people to join Medicaid" under the expansion of the program. "'Get as much gunk out of the Senate bill as possible. That Nebraska thing is really hurting us,' Clinton told House Democrats in a closed-door speech at the Visitors' Center at the Capitol, according to a House aide who attended the session. . . . He also warned Democrats that they should not attempt to separate themselves from President Obama in their reelection campaigns, as Clinton felt Democrats did back [in 1994] to him" (Bacon, 1/15).

The Wall Street Journal reports: Among the key issues in talks Friday was 'how to pay for a deal giving a five-year reprieve on a new tax on expensive health plans to as many as 12 million union members. The agreement cleared away a significant hurdle to reaching a final deal on a health-care overhaul. But unions estimated that softening the tax would reduce revenue by $60 billion over a decade. The deal would exempt workers in collective bargaining agreements, as well as state and municipal government workers, from the tax until 2018. The tax would kick in for other workers in 2013. . . . Officials said negotiators were looking at raising fees and cutting reimbursements to various industries, as well as applying the Medicare tax to unearned income for the first time for upper-income Americans" (Meckler and Bendavid, 1/15).

The New York Times reports: "President Obama has taken full control of the health care negotiations, casting himself for the first time in the role of mediator between the House and Senate during a 72-hour marathon of talks that have turned his White House into a de facto Congressional conference. . . . 'It was always our sense that once the bills were passed that he would have to play a much more direct role in helping work out the details,' his senior adviser, David Axelrod, said in an interview, as the talks went on down the hall from his West Wing office. 'This has been a prodigious task from start to finish; we knew it would be.' . . . Senator Dianne Feinstein, Democrat of California, in a telephone interview from her home state, said, 'I think the president has to do this or there won't be a bill, candidly.'" (Stolberg and Herszenhorn, 1/15).

Opponents Threaten Constitutional Challenge To Individual Mandate
By David Welna, NPR News
January 19, 2010

This story comes from our partner NPR.

A major component of the health bills grinding through Congress right now is a new requirement that nearly everyone buy health insurance--a so-called individual mandate. But conservatives who oppose the health care overhaul have threatened to challenge this mandate on constitutional grounds.

"For the first time in the history of our country, 225 years, the federal government's saying you've got to buy something," Iowa Republican Sen. Chuck Grassley said. "That's never been before. You as an individual can do whatever you want to, buy whatever you want to, when you want to, where you want to get it, but now the federal government's saying you have to buy health insurance."

Grassley's position on the individual mandate has changed in recent months. Last June, he told Fox News Sunday he thought everyone should have to buy health insurance, because, as he put it then, "There's no free lunch."

"I believe that there is a bipartisan consensus to have individual mandates," he said.

At the time, Grassley was still deep in negotiations with Senate Democrats on the Finance Committee over a health care bill. But by the time that panel's legislation came to a vote, Grassley had turned against both the bill and the requirement that everyone buy insurance.

Since then, a lot of other Republicans have joined Grassley in questioning the individual mandate, including Florida's Republican attorney general, Bill McCollum.

"I view the individual mandate as a living tax. I call it a tax on living," he said.

To The Supreme Court?

Two weeks ago, McCollum wrote fellow state attorneys general and urged them to explore a constitutional challenge.

"I'm assuming there will be a bill that becomes law, and . . . if it does include a individual mandate, or what I call a living tax, then at that point we have to make a decision: Do we challenge it in court?" he said. "The first step would be to go into federal court and seek that challenge, and I would expect, if that were to be the case, we'd have a sizeable number of attorneys general joining us."

A legal battle could end up in the Supreme Court. Georgetown University law professor Randy Barnett is already gearing up for that. He maintains Congress would be overstepping its powers enumerated in the Constitution if it required people to buy health insurance.

"Never in the history of the United States has the federal government ever required someone to engage in an economic activity with a private party. It's never been done, and anything that's never been done before has no precedent for it," he said. "It would have to be a new decision by the Supreme Court to uphold this new extension of power. And if they uphold this, then there's pretty much nothing that Congress can't do and that's the end of the enumerated power scheme."

But William Treanor, the dean of Fordham University's law school, said he's confident an individual mandate would be held constitutional if it went to the Supreme Court. Treanor said the mandate to buy health insurance would be seen by the high court as part of Congress' power to regulate interstate commerce.

"The view that it's not consistent with the enumerated powers is at odds with well-established precedent that runs back more than 70 years," he said. "I think this is very clearly something that Congress can do under the commerce clause power."

"A First Time For Everything"

Wake Forest University constitutional expert Mark Hall says almost every legal scholar he knows considers an individual mandate for health insurance consistent with Congress' power to regulate.

"An individual who goes out and tries to purchase health insurance cannot buy a policy that covers pre-existing conditions or that asks no medical questions. Such a product is simply not sold in most states, and it can't really be sold economically unless we require most people to have insurance," he said. "So the requirement is really part and parcel of the regulation of the structure and conditions of the marketplace that would allow a very desirable kind of product to be sold."

And Yale legal scholar Akhil Amar said the fact that a requirement to buy health insurance would be enforced through fines shows Congress is exercising an even more fundamental constitutional power: its power to impose taxes.

Amar says courts should not be concerned that such a mandate has not been used before.

"There's a first time for everything. Before there was a federal bank, there was no federal bank; before there was a Social Security Administration, there was no Social Security Administration," Amar said. "Have we ever had a law just like this before? No. That's why it's being proposed. That's true of many laws."

Still, should the individual mandate become law, opponents are saying: See you in court.

Unions, Democratic Leaders And White House Reach Agreement On 'Cadillac' Health Insurance Plans
January 15, 2010

Los Angeles Times : "The White House and labor leaders agreed Thursday on a formula to tax high-cost insurance plans, removing one of the last obstacles to President Obama's healthcare overhaul, officials said." Organized labor had staunchly opposed the proposed "Cadillac" tax, but as part of the agreement, "reached after an intense round of negotiations this week, union leaders dropped their opposition . . . in exchange for concessions to limit its scope." Under the compromise, the threshold for family plans subject to the tax would be increased from $23,000 to $24,000. The cost of dental and vision plans would be exempt. Based on the agreement, a 40% excise tax would be applied to "individual healthcare plans valued at $8,900 or more and family plans worth $24,000" (Hook and Levey, 1/15).

The New York Times : The "negotiations produced changes to a tax included in the bill passed by the Senate last month. The changes would lessen and delay the impact of the tax on workers and would reduce the amount of revenue collected. The revenue would help finance coverage for millions of people who are uninsured. Labor leaders hailed the deal and said they were prepared to fight for passage of the legislation." AFL-CIO President Richard L. Trumka said changes "would reduce the amount of revenue from the tax by about 40 percent, to $90 billion over 10 years. The tax in the Senate bill would have generated $149 billion over 10 years."

"The agreement has not been vetted by rank-and-file members of the Democratic caucus in either house of Congress. Nor has the Congressional Budget Office reviewed it. The proposed tax could be further modified based on feedback from lawmakers and the budget office" (Pear and Greenhouse, 1/14).

CongressDaily: "Senate language also is preserved that would raise the threshold for high-risk workers and allow plans in the 17 highest-cost states to hit a higher threshold that diminishes over time" (Edney, 1/14).

The Hill : "State and local government health plans and the plans of unions that are part of collective bargaining units would be shielded from the tax until Jan. 2018. The taxable threshold for health plans would be increased on the basis of age and gender--the tax on the plans of older workers and female workers would kick in at a higher cost than for average plans. . . . The taxable threshold for a family plan would be increased by $3,000 for each retiree in the plan not yet eligible for Medicare benefits. People between the ages of 55 and 64 who are not eligible for Medicare must pay high private insurance costs."

Unions sought to appear unified behind the agreement when it was announced during a conference call with reporters, which included representatives from the AFL-CIO, the American Federation of State, County and Municipal Employees and the National Education Association. "But there are some in the labor movement, including the International Association of Fire Fighters, who are not on board yet with the deal" (Bolton and Bogardus, 1/14).

McClatchy/The Miami Herald : The accord gives "collective bargaining units a five-year delay before they're subject to the excise tax. Over time, more Americans could get their insurance through a government-managed private insurance exchange, especially if they live in states with high insurance costs or participate in collective bargaining units. The aim, as union bosses see it, is to tax high-end health insurance plans carried by wealthy business executives while shielding middle-class workers who bargained away their salaries in exchange for high-end health-care coverage" (Lightman and Talev, 1/14).

USA Today : "The agreement on the controversial tax . . . partly answered how lawmakers will pay for billions of dollars in subsidies that will help millions of uninsured Americans afford coverage." "White House communications director Dan Pfeiffer said the agreement represents an improvement because it makes needed adjustments for some employers and workers but still puts downward pressure on long-term health care costs, which Obama has insisted on" (Fritze, 1/15).

Politico reports that for "a day at least, the White House could claim a significant victory on the road toward passing a health care reform bill, with a deal that averts a standoff on one of the most contentious issues standing in the way of a final compromise. . . . 'We will endorse it, and we'll do that proudly,' said (Trumka) of the health care bill, assuming it stays true to negotiations. 'We've been at this for 60 years, and we are extremely proud of the constructive role that labor's played in advancing health care reform'" (Budoff Brown, 1/14).

The Wall Street Journal reports on the dissent from Republicans and some business groups. "J.P. Fielder, a spokesman for the U.S. Chamber of Commerce, said that like the unions, the business community didn't like the tax and supported scaling it back. But he said it seemed unfair for unionized workers to be exempted for five years when others were not." Annual increases on the excise tax threshold will be tied to one point above the Consumer Price Index or further if health costs rise at a faster rate between now and 2013, officials said (Meckler and Bendavid, 1/15).

*We would like to thank Nicole DiMaria, Esquire (Wolff & Samson, West Orange, NJ), for selecting the articles for this week's update.

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.


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