Federal Healthcare Update

October 2, 2009

Pardon Our Dust

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By Mona Mohib
This morning, the Senate Finance Committee completed its mark up of the health care reform bill. Over the course of the two week mark up, the Committee considered more than 500 amendments. On Wednesday, the Committee rejected two amendments that would have included a public option in the bill. Senator John Rockefeller’s (D-WV) amendment was rejected 15-8, and Senator Chuck Schumer’s (D-NY) was rejected 13-10, with a number of Democrats voting against each amendment. In explaining his nay vote, Senator Max Baucus (D-MT), Chairman of the Committee, said, “In the Senate, my job is to put together a bill that gets 60 votes. I can count. No one has been able to show me how they could count up to 60 votes with a public option in a bill.”
On Thursday, the Committee accepted an amendment that the GOP is calling a watered-down version of the public option. The amendment, offered by Senator Maria Cantwell (D-WA), would allow states to use federal funds to set up public health insurance plans for individuals whose income places them between 133% and 200% of the federal poverty line (FPL). The state plans would then contract with private insurers to provide the coverage.   Sen. Cantwell called the provision “a public plan, but negotiated with the private sector.” The amendment was approved by a 12-11 vote, with Sen. Blanche Lincoln (D-AR) the only Democrat voting against it. Senate Republicans and the Association of Health Insurance Providers (AHIP) have objected to the plan, saying that the unintended consequences of the amendment would cause budget shortfalls, skyrocketing premiums, and waitlists to enroll for coverage. Note: Some Senators, including Majority Leader Reid and Sen. Schumer, have insisted that there is enough support for the public option to pass a version on the floor.
The Committee also voted to accept an amendment from Senator Olympia Snowe (R-ME) and Sen. Schumer to reduce the penalties on those who failed to purchase health insurance. In the original mark, the penalty carried criminal status, and the fee, in the form of an excise tax, for not purchasing health insurance could amount to $1,900 a year for a family. In the new bill, the maximum penalty for a family would start at $200 in 2014 and rise to $800 in 2017. The amendment also excepted a greater number of people from this requirement, stating that individuals are exempt if they have to pay more than 8 percent of their adjusted gross income for the cheapest available insurance plan.
The modified bill is now in the hands of the Congressional Budget Office (CBO), which will score the bill for a final vote. The Committee could be ready to vote on the final bill as early as Tuesday of next week. The bill is likely to pass on partisan lines, although Sen. Snowe’s vote is still in play. It must then be merged with the Health, Education, Labor, and Pensions (HELP) Committee bill, a process that will likely involve Senate Majority Leader Harry Reid and top White House officials in addition to the Chairs of the two Committees.
Merging the two bills into a final product that will satisfy enough Democrats to get 60 votes will be a tricky process. The public option in particular will likely be a flashpoint for controversy. One possible solution for that problem could be found in a proposal from Senator Tom Carper (D-DE), who has formulated a ‘third way’ proposal for the public option. His proposal would allow states to individually decide whether to create a private-insurance competitor such as a government plan and a nonprofit insurance cooperative, or to open up state-based insurance pools for government workers to every resident. This is similar but not identical to Sen. Cantwell’s amendment that was included in the Finance Committee bill. Other challenges in formulating the final bill will include the deal that the Finance Committee made with the Pharmaceutical Research and Manufacturers Association (PhRMA), which has faced challenges in recent weeks. Sen. Byron Dorgan (D-ND) has stated his intention to introduce an amendment on the floor to allow the importation of drugs from Canada, which was expressly ruled out in the $80 billion deal.