Federal Healthcare Update

July 14, 2009

Pardon Our Dust

We recently launched this new site and are still in the process of updating some of our archived content. Some details of this article may be incomplete, links may be broken, and other elements may not display properly yet. We appreciate your patience and understanding.


For the last week, Washington has been focused on figuring out how to pay for health care reform. The Senate Finance Committee’s negotiations continue, as legislative language was again delayed. Senate Majority Leader Harry Reid (D-NV) got involved in the negotiations last week, telling Senate Finance Committee Chair Max Baucus (D-MT) on Wednesday that he should be careful of giving up too much in the name of bipartisanship. Democratic leadership had expressed concerns over reports that the Finance Committee bill would include a tax on health benefits and would not have a public option. Sen. Reid asked Sen. Baucus to find a way to pay for health care reform, and Sen. Baucus delivered, presenting more than a dozen alternative payment options to his committee on Thursday. Although this caused a delay that puts the already-behind Senate Finance Committee even further off its schedule, the Committee has announced that a markup will go forward the week of July 28th.
House Democrats also turned to the question of paying for their Tri-Committee bill last week. Rep. Charlie Rangel (D-NY), Chair of the Ways and Means Committee, announced plans to pay for the bill that included a graduated income surtax on wealthy Americans starting in 2011 and cuts to Medicare and Medicaid payments. The graduated tax would consist of one, two, and three percent levied on households with incomes over $350 thousand, $500 thousand, and $1 million respectively. Over the weekend, Health and Human Services Secretary Kathleen Sebelius expressed support for the plan over the weekend, saying on CNN’s State of the Union, “Well, I think the bottom line is, it’s got to be paid for. And we all have a shared responsibility that we all need to play a role.” 
In addition to the tax, another PhRMA-style deal, this time with U.S. health insurance providers, is in the works as a way to pay for health care reform. The Senate Finance Committee today reports that it is in discussion with health insurers to save $100 billion over the next ten years with reforms and cuts to Medicare. The discussions focus on subsidies for Medicare beneficiaries who get their coverage through private Medicare Advantage programs. These plans receive subsidies at a cost greater than through traditional Medicare programs. This would be the third such deal cut by the Finance Committee, and these deals are not without controversy. Recent commentary has pointed out that the savings achieved in these bills are much less than what President Obama asked for, and significantly less than what the industry associations stand to gain if universal coverage is achieved. House Energy and Commerce Chair Henry Waxman (D-CA) has also recently announced that the deals stuck between industry and the Senate Finance Committee would not be a part of his plan.
The release of the Tri-Committee bill, scheduled for Friday, was delayed in part due to concerns on the part of the Blue Dogs Democrats. Rep. Mike Ross (D-AR), who chairs the Blue Dogs’ health care task force, met with leadership for two hours Thursday night to discuss concerns such as altering reimbursement rates under a proposed public option so that they are not based on Medicare rates. Meetings continued Friday with the chairs of the three Committees involved. 
Meanwhile, the Senate HELP Committee took up several Republican amendments to their health care bill last week. The votes on these amendments followed a uniform party line. Although this is the only one of the three health care reform bills nearing completion, the President is still optimistic about finishing health care reform this year, saying “It is my highest legislative priority over the next month.” It is, in fact, a high legislative priority for everyone; both Senate and House aides have been quoted as saying that if more progress isn’t made soon, the August recess could be delayed.