Federal Healthcare Update

June 8, 2009

Pardon Our Dust

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The latest news in the health care reform debate today is Senate Health Committee Chairman Kennedy’s draft bill, which was released on Friday. With the Obama administration beginning to push Congress to complete a bill soon, a comprehensive health care reform bill could be on the floors of both the House and Senate by August. The recent release of Senator Kennedy’s health care reform draft may provide a roadmap for the final bill. However, there is still much to be worked out. The 170-page document is being called a “draft of a draft” because it is incomplete, with many specifics left blank.
One of the most controversial aspects of the bill, the government-run insurance plan, is the least finalized. The lack of detail in this portion of the bill reflects the reality of a lack of consensus among Democrats; resolving this debate will be one of the biggest hurdles on the road to health care reform.  In addition to the ideological differences among Democrats, the public option is strongly opposed by many Republican Senators and private industry, who say that the public option would doom competition and inevitably lead to a single government-run plan.
Senator Kennedy’s draft borrows from a variety of sources to create a comprehensive bill. Modeled on the successful state-level insurance clearinghouse Massachusetts Connector, the bill has as its starting point a system by which employers and individuals would choose health care plans called the American Health Benefits Gateway. This system would be administered by the states, which would determine many of the details of the plans, and the system would include government subsidies, although the specifics of the subsidies have yet to be determined.
The draft contains a “Patients’ Bill of Rights,” which encompasses many Republican priorities on the health care debate. This includes ensuring that patients may choose their own doctors, and that doctors and nurses may choose the course of treatment for their patients without government interference.
The cornerstone of the draft, however, is the government-run option for health insurance, called an “affordable access plan”.  There are few specifics in this part of the draft other than that it would be run by the Secretary of Health and Human Services, and would pay health providers at rates similar to Medicare. 
The draft will likely change a great deal before it sees floor action in either house.  In addition to the government-run option, revenue measures must still be worked out, and changes to Medicare payments are also being discussed. The Obama administration has stated its intention to get a bill done this year. If this is to happen, hearings must begin very soonAs a result, the congressional health committees are in a holding pattern, awaiting a complete bill before they can begin hearings.
In our next email, we will provide a more comprehensive overview of the political context in which the health care debate will take place.  We invite you to contact us immediately if you have any questions about the debate or its direction.