This Week in Health Care Reform : EasyToInsureME Health Insurance

This Week in Health Reform

Republican Scott Brown’s victory over
Massachusetts Attorney General Martha Coakley (D) in the January 19
special election to fill the seat of the late Senator Edward Kennedy
(D) might prove to be a game-changer for the health care reform debate.
The loss of the 60th Democratic vote now robs Senate Democrats of a
filibuster-proof majority. Last week, Democrats were rushing to wrap up
a House/Senate agreement on the bill, likely due to reports that
Coakley’s lead had diminished.

Congressional leaders are still
aiming to have the controversial points in the health care reform bill
settled as soon as possible, so they can send the compromised bill to
the Congressional Budget Office (CBO) for scoring. The CBO will then
need 12 days to analyze the legislation.

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In
addition to Senate Majority Leader Harry Reid (D-NV) and Speaker of the
House, Nancy Pelosi (D-CA), lawmakers participating in the White House
meetings include: House Majority Leader Steny Hoyer (D-MD), House
Majority Whip James Clyburn (D-SC), House Energy and Commerce Committee
Chairman Henry Waxman (D-CA), House Ways and Means Committee Chairman
Charlie Rangel (D-NY), House Education and Labor Committee Chairman
George Miller (D-CA), Assistant Senate Majority Leader Richard Durbin
(D-IL), Senate Finance Committee Chairman Max Baucus (D-MT), Senate
HELP Committee Chairman Tom Harkin (D-IA), and Senate Banking Committee
Chairman Christopher Dodd (D-CT).

A main point of contention between the two houses of Congress pertained to the
40
percent excise tax on high-cost health insurance plans passed by the
Senate. Since many labor union members would be affected by the tax on
high-cost health insurance plans, the House of Representatives was not
supportive of this provision in the Senate bill. Union leaders have
also been included in key negotiations on this provision, and on
January 14, signaled that they are ready to support the merged
legislation with the compromised provision.

The main revenue
source for the Senate’s health care reform bill (H.R. 3590) would be
from an excise tax – beginning in 2013 – on employer-provided,
high-cost health insurance plans costing more than $8,500 for
individuals and $23,000 for a family. The reported compromise on the
legislation now makes the tax kick-in on policies costing $8,900 for
individuals and $24,000 for families. The tax threshold would still
rise at inflation plus one percentage point, as is currently written in
the Senate bill. Additionally, dental and vision benefits would be
removed from the calculation of threshold costs, and plans offered by
state and local governments, as well as plans covered by collective
bargaining agreements, would be exempted from the excise tax until
2018. This would allow current agreements to expire and allow for
negotiation of new contracts.

In an effort to make up the lack
of revenue from the modification of the excise tax provision,
leadership will have to come up with new funding to finance the merged
bill. Some reports have mentioned that the pharmaceutical industry has
agreed to provide more money than the $80 billion they have already
negotiated with the White House. Medical device companies could also
face additional fees. Portions of the main revenue source in the House
bill – a Medicare payroll tax on wealthy U.S. residents – could be
added as well.

On January 14, Richard Trumpka, president of the
AFL-CIO, said, “Union leaders approached negotiations with the White
House and congressional leaders with one overriding goal in mind –
getting a bill signed into law.” Gerald McEntee, president of the
American Federation of State, County and Municipal Employees (AFSCME),
said, “We do like the way it’s shaping up, but it’s still not finished.
We’ve got to see a final product.”

There also has been
significant discussion – but no resolution so far – about the question
of whether to establish a single national health insurance exchange or
allow each state to operate its own exchange. Blue Cross and Blue
Shield of Texas continues to support a state-based approach to
exchanges.