December 9, 2009
Democrats reach a deal
A group of 10 Senate Democrats – five liberals and five centrists – emerged from a meeting room Tuesday night and said they had reached a “broad agreement” that could unite the party in support of health reform. But one key question remained – does the deal include a public plan or not?
The Associated Press reported that negotiators scrapped a public plan in favor of an insurance program run by private companies, but supervised by the federal agency that oversees health insurance for federal employees – the Office of Personnel Management.
But at an impromptu news conference, Senate Majority Leader Harry Reid, D-Nev., said the emerging compromise "includes a public option and will help ensure the American people win in two ways: one, insurance companies will face more competition, and two, the American people will have more choices." Reid declined to provide any additional details about the agreement.
Could it mean that Senate Democrats have finally found a “have the cake and eat it too” compromise that allows liberals to say they’ve included a public option but at the same time lets centrists assert there is no public option?
Reid did say he would ask the Congressional Budget Office to analyze the compromise bill and provide a cost estimate. “But believe me that we've got something that's good,” said Reid. “It moves this bill way down the road."
The agreement would also reportedly allow people aged 55-64 to “buy into” the Medicare program, which right now serves those 65 and older, as well as disabled individuals. But there will be no additional expansion of Medicaid for people making up to 150 percent of the federal poverty level. Although the idea was discussed in recent days, Governors objected because states share in the cost of Medicaid.
Meantime, two large hospital trade groups declared their opposition to the Medicare buy in, citing the program’s low reimbursement rates. "Adding millions of people to these programs at a time when they already severely underfund hospitals is unwise and should be opposed," wrote the American Hospital Association to its members. The Federation of American Hospitals adopted a similar position.
The Senate compromise is likely to form the basis of a manager’s amendment that would lead to a series of cloture votes that would in turn force a vote on final passage of the health reform bill. But the whole process of filing cloture and holding votes might stretch out over more than a week, meaning it may still be difficult for the Senate to finish its work on health reform by Christmas.
Abortion amendment fails
On Tuesday, the Senate voted down an amendment to restrict abortion coverage by a margin of 54-45. The bipartisan amendment from Sen. Ben Nelson, D-Neb., and Sen. Orrin Hatch, R-Utah, would have limited abortion coverage to cases of incest, rape or when a mother’s health is in danger.
The amendment rejected by the Senate is similar to a provision adopted by the House in its health reform bill, meaning the two bills are now at odds on the emotional abortion issue.
Also, one of the amendment’s sponsors – Sen. Nelson – has said he will filibuster any health reform bill that does not include strong restrictions on federal funding for abortion coverage. “I had no Plan B, and I’m not looking for a Plan B,” Nelson said, adding that he does not plan to draft compromise language, but would listen to any proposals brought to him.
It will take the votes of all 58 Democrats, plus the two Independents who caucus with them, to head off a filibuster and ultimately pass health reform. If Sen. Nelson breaks ranks over the abortion issue, it means Democrats would need to win the support of at least one Republican, such as Sen. Olympia Snowe, R-Maine. Sen. Snowe was the only Republican to back health reform when it passed the Senate Finance Committee, but she has also said that does not necessarily mean she’ll vote “yes” on the final bill.
Amendment fever
The Senate debate has being described as “sometimes bitter” (the New York Times) and as featuring “heavy political skirmishing” (Reuters). But despite the rancor, the Senate is working its way through a list of several hundred amendments. A number have already gone to a vote, including these:
- A Democrat-sponsored amendment to improve women’s access to preventive care passed 61-39. It would eliminate insurance co-pays and deductibles for screenings for diseases like cancer and diabetes.
- A Republican-sponsored amendment to remove provisions from the bill that would cut Medicare spending by $400- to $500 billion was defeated 59-41. (This includes $118 billion in Medicare Advantage cuts.) Had it passed, it would have sent the reform bill back to the drawing board, since these cuts are the primary way the Senate would finance reform.
- In response to that amendment, a Democrat-sponsored amendment was introduced that says Medicare savings have to be returned to the Medicare program, and that Medicare benefits guaranteed under current law will still be guaranteed after reform. It passed 100-0.
- The Senate rejected an amendment that would have limited the tax deductions that insurance companies can take for salaries paid to highly compensated executives. The amendment sponsored by Sen. Blanche Lincoln, D-Ark., failed 56-42 on a measure that needed 60 votes.
- A Republican amendment to limit plaintiff lawyers’ fees in medical malpractice cases went down on a 66-32 vote.
- By a vote of 98 to 0, the Senate approved an amendment by Sen. Mark Pryor, D-Ark., that would require the Department of Health and Human Services to develop a survey to evaluate enrollee satisfaction with health plans offered through the exchanges.
- The Senate defeated a motion from Sen. John McCain, R-Ariz., that would have sent the entire health reform bill back to the Senate Finance Committee with instructions to protect Medicare Advantage members from proposed funding cuts. The vote was 57-42.
Senate works overtime
Reforming health care is now a 7-day-a-week, nearly ‘round-the-clock job for U.S. Senators. Debate of the Senate health reform bill – the Patient Protection and Affordable Care Act – began last week, continued through Saturday and Sunday, and is expected to run at least into next week, if not well beyond. Senate Majority Leader Reid has told Senators not to make any weekend plans until the health reform debate wraps up.
And on Sunday, President Barack Obama addressed Senate Democrats in a 45-minute closed-door session. A White House spokesman said Obama thanked them for their work and encouraged them to move the reform bill forward. Obama said this is "the most significant social legislation in decades — so don't lose it," according to Sen. Joe Lieberman, I-Conn., who caucuses with Democrats.
Reid’s remarks draw fire
Senate Majority Leader Harry Reid, D-Nev., blasted health reform opponents on Monday, comparing them to lawmakers who opposed women’s suffrage, civil rights legislation or the abolition of slavery.
In remarks delivered on the Senate floor, Reid said: "Instead of joining us on the right side of history, all the Republicans can come up with is, 'slow down, stop everything, let's start over.' If you think you've heard these same excuses before, you're right. When this country belatedly recognized the wrongs of slavery, there were those who dug in their heels and said 'slow down, it's too early, let’s wait, things aren't bad enough.'
“When women spoke up for the right to speak up – they wanted to vote – some insisted slow down. There will be a better day to do that. Today isn't quite right. When this body was on the verge of guaranteeing equal civil rights to everyone regardless of the color of their skin, some senators resorted to the same filibuster threats that we hear today."
Republicans fired back. “If he is going to stand by these statements, the Democrats must immediately reconsider his fitness to lead them," said Sen. Saxby Chambliss, R-Ga. And, Sen. John Cornyn, R-Texas, said simply "It is an indication of desperation.”
Republicans insist on their rights; Democrats accuse them of obstructing
Sen. Judd Gregg, R-N.H., sent his Republican colleagues a letter reminding them of their rights as minority members of the Senate. “We, the minority party,” he wrote, “must use the tools we have under Senate rules to insist on a full, complete and fully informed debate on the health care legislation – as well as all legislation – coming before the Senate.” He details the rules that form “a cornerstone of protection” here.
“We are at an important crossroads both for the economy and for the health care system,” he wrote. “Therefore, it is imperative that our voices are heard during this debate.”
Meanwhile, in a closed-door meeting, Majority Leader Reid told Democrats to prepare for legislative trench warfare because Republicans are not interested in passing a bill.
But Sen. Lamar Alexander, R-Tenn., chairman of the Senate Republican conference, responded, “That’s an odd charge about a bill that would cost $2.5 trillion when fully implemented, and restructure one-sixth of the economy.” He noted that the Senate had spent a month debating the agriculture bill, seven weeks on an education bill, and eight weeks on an energy bill. “Surely we can expect at least that much time on a comprehensive health care bill,” he said.
What are doctors thinking about reform?
The American Medical Association, the country’s largest physician group, came out in favor of the House health reform bill – but expressed a number of reservations about it, too. Now the AMA’s executive vice president and CEO Michael Maves has sent a letter to Senate Majority Leader Harry Reid regarding the House and Senate proposals, saying, “We do not believe that maintaining the status quo is an acceptable option for physicians or the patients we serve,” but expressing the organization’s concerns again. This time, there is no declaration of support for the Senate’s bill.
Dr. Maves’ concerns include the fact that the Senate bill doesn’t repeal the Medicare law that automatically cuts physician payments each year when budget targets aren’t met, but also the House proposal to create an independent Medicare advisory board that would have the power to mandate physician payment cuts, the plan to create barriers to physicians owning hospitals, and the Senate’s proposed tax on elective cosmetic surgery. Read the entire AMA letter here.
Meanwhile, 19 specialist organizations representing 240,000 doctors also sent Sen. Reid a letter. It said, “We must oppose the legislation as currently written,” for a list of reasons that included “the absence of a permanent fix to Medicare’s broken physician payment system.” The associations that signed the letter included the American College of Surgeons, the Congress of Neurological Surgeons and the American Association of Orthopedic Surgeons.
And the California Medical Association also announced it opposed the Senate bill. Its executive committee determined it would raise local health care costs and hinder access to care for seniors and low-income patients. Other state medical associations oppose the reform proposal as well, including Texas and Florida.
More news on cost controls
Two recent reports paint vastly different pictures of the impact reform legislation might have on health care costs.
On Monday, the Commonwealth Fund and the Center for American Progress Action Fund released a new study titled “Why Health Reform Will Bend the Cost Curve.” As its name implies, the study is optimistic about what health reform can accomplish. It estimates that “the combination of provisions in the House and Senate bills would save $683 billion or more in national health spending over the 10-year period 2010–2019 and lower premiums by nearly $2,000 per family. Moreover, the annual growth rate in national health expenditures could be slowed from 6.4 percent to 6.0 percent.”
Meantime, an analysis for the Blue Cross Blue Shield Association by Oliver Wyman, Inc. echoes what the Congressional Budget Office recently said about premium costs: Under the reforms being considered by the Senate, premiums would rise significantly for families and individuals that buy insurance on their own.
The organization says that if the bill passes in its current form, average annual claims in the individual health insurance market would be expected to increase by 54 percent in five years. That’s largely because the bill says insurance companies must take everyone who wants insurance, regardless of their health status – but then has a very weak enforcement mechanism to make sure everyone buys and maintains coverage. Without a strong mandate for participation in the system, there is little incentive for healthy people to purchase insurance until they need expensive health care. So without healthy people to subsidize the sick, premiums for everyone would increase: by $3,300 a year for families and $1,500 for individuals, Wyman says.
The report also said that because of new rules that would prevent old people from being charged more than three times as much as young people, premium rates for the youngest 30 percent of the population would increase by 35 percent, giving them little incentive to buy insurance, since most are healthy.
“Significantly restricting age discounts coupled with a weak mandate will cause young people, who are critical to providing cross subsidies, to forgo coverage, resulting in higher premiums for everyone," said Kurt Giesa, director of Oliver Wyman, Inc.
The report also said that rates for small business would increase by 20 percent.
The White House immediately pushed back against the findings of the report. "While the new study contains many of the same arguments that were debunked in previous sham reports, this one contains a new twist: It attacks the independent Congressional Budget Office and the conclusions of health experts across the political spectrum," White House communications director Dan Pfeiffer wrote in a blog post.
The CBO had said that Senate reforms would cause insurance premiums in the individual market to increase by 10 to 13 percent by 2016, compared to what they’d be under the current system – an increase of $300 for individuals and $2,000 for families. Small business premiums, the CBO said, would remain about the same.
Some of the differences in the conclusions of the Oliver Wyman and CBO reports are due to different assumptions about the health of the people entering the individual insurance market, and the number of healthy people who will wait until they’re sick to buy insurance.
