This Week in Health Insurance Quotes Reform : EasyToInsureME

JANUARY 8, 2010

This Week in Health Care Reform

While
still technically in recess, members of Congress trickled back to
Washington, D.C. this week to get a jump start on reconciling the
health care reform bills passed by the House and Senate last year.

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On
Tuesday, Democratic leaders began conversations around a final package,
pledging to overcome differences and aiming to have a bill passed by
the President Barack Obama's State of the Union Address, anticipated in
early February. Members of the news media, however, have highlighted
the difficult negotiations ahead, given some major differences in the
proposed packages and the time pressure being imposed by President
Obama.

We continue to encourage you and others to engage members
of Congress during this debate by visiting the Health Action Network.

Health Reform Negotiations

Senate
Passes Reform Bill: At 7:05 a.m. on Christmas Eve, Senate Majority
Leader Harry Reid (D-NV), along with 59 other Senate members, voted to
pass reform legislation that, according to the Congressional Budget
Office (CBO), would expand health coverage to approximately 31 million
people at a cost of $871 billion over 10 years. The bill passed on
party lines (60-39), without a single Republican vote in favor.
Republicans believe the bill would impose many regulatory and financial
burdens on taxpayers and businesses while increasing government debt.

Reconciliation
Poses Difficult Road Ahead: Before lawmakers can present a final health
care reform bill to President Obama, the approved Senate bill needs to
be merged with the House version passed in November 2009, which extends
coverage to 36 million Americans at a cost of about $1 trillion.
However, the bills have some major differences that will need to be
addressed as lawmakers shape the final package, including:

*
Insurance market reform and exchanges - Both bills would bar insurers
from denying coverage to those with pre-existing conditions and from
dropping coverage for those who get sick. Both would also create
insurance exchanges through which small businesses and individuals
could shop for insurance. The Senate bill would create state-based
exchanges, however, whereas the House bill would create a national
exchange with an option for states to run state-based programs if they
meet certain requirements.
* The government-run plan - A
government-run plan was a central component to the House bill. The
Senate bill would instead direct the U.S. Office of Personnel
Management to contract with private insurance companies to offer
policies on the exchanges. Despite much commotion over the need to
include the public option, House leaders conceded Tuesday that they may
be willing to agree to a bill without a public option if other parts of
the bill fulfill the same goals, with the hope of expanding available
subsidies.
* Reform financing - Members of the House would pay for
the reform effort - which carries a price tag of about $1 trillion -
through a 5.4 percent surtax on individuals making more than $500,000 a
year and couples making more than $1 million and by imposing a 2.5
percent excise tax on medical devices. Members of the Senate, on the
other hand, plan to pay for their $871 billion plan through several
measures:

- a 40 percent excise tax on high-cost health insurance plans;
- an increase in payroll taxes for Medicare on individuals making more
than $200,000 a year and couples making more than $250,000 per year;
- fees on insurers, medical device manufacturers and drug companies;
- and, a 10 percent tax on indoor tanning salons.

On Wednesday, President Obama expressed his preference for the
insurance tax contained in the Senate bill, but the excise tax is
strongly opposed by labor unions.

* Coverage Mandates - Both
bills require that individuals obtain health insurance and impose a
penalty on those who do not. The House bill also includes an employer
mandate for companies with payrolls above $750,000. The Senate bill
does not include this mandate but would require companies with more
than 50 employees to pay a fine if employees obtain federally
subsidized coverage on the insurance exchange.
* Medicaid expansion
- Both bills expand Medicaid. The Senate bill makes Medicaid available
to those with incomes up to 133 percent of the poverty level, whereas
the House allows for coverage for those with incomes up to 150 percent
of the poverty level.
* Abortion - While both bills bar the use of
federal funds for abortions, the House bill includes stricter language
requiring anyone seeking abortion coverage to buy separate insurance
riders. The Senate bill would let the states choose whether or not to
include plans with abortion coverage in the insurance exchange and
would require those with abortion coverage to write a separate check
for this insurance.

President Obama Pushes Swift Action: In a
meeting at the White House Tuesday, President Obama encouraged House
Speaker Nancy Pelosi (D-CA) and House Majority Leader Steny Hoyer
(D-MD), as well as Senate Majority Leader Harry Reid and Sen. Dick
Durbin (D-IL), who participated via phone, to bypass the traditional
conference committee used to negotiate reconciliation, in the interest
of time. The move, which creates a three-way negotiating construct
involving top Democrats in the House and Senate and the White House,
will exclude Republican lawmakers from the debate and reduce their
ability to delay the voting.

Further, President Obama indicated
that he would be taking a hands-on approach to the final stages of the
negotiations. The President held another meeting with leading Democrats
on Wednesday to help iron out differences between the House and Senate
bills. Democrats also held a noon meeting and conference call on
Thursday to discuss how reconciliation will proceed and some of the
priorities for the final bill.

Additional Activities

C-SPAN
Calls for Transparency: Noting that President Obama mentioned several
times during his campaign that health care negotiations would be
transparent and broadcasted on C-SPAN, Brian Lamb, C-SPAN CEO, sent a
letter to House and Senate leaders on December 30 asking for
negotiations to be opened up for public viewing. Republicans pointed
out that the most critical discussions on health reform have taken
place behind closed doors so far. Top House Democrats deflected the
C-SPAN request, saying the process has been highly transparent through
more than 100 public hearings held by the House. They pledged to make
the final stages transparent in part via the Internet.

Opponents
Question Constitutionality: On Wednesday, December 30, Republican
attorneys general in 13 states - including Colorado, Florida, Idaho,
Michigan and Virginia - sent a letter to Sens. Nancy Pelosi and Harry
Reid stating that Congressional leaders must remove the amendment
exempting Nebraska from having to pay for the state's Medicaid
expansion. The prosecutors are calling the deal unconstitutional and
threatened legal action. Members of the news media report that South
Carolina Attorney General Henry McMaster and Oklahoma top prosecutor
Drew Edmondson are asking attorneys general across the country to call
on Sens. Pelosi and Reid to remove the provision.

In addition, a
contingency of legal scholars as well as many Republican lawmakers are
calling the measures passed by both the House and the Senate
unconstitutional , primarily due to the inclusion of an individual
mandate. "In the history of this country, the federal government has
never required every American to enter into a contract with a private
company," said Randy Barnett, a professor of constitutional law at
Georgetown University Law Center.

Looking Ahead

Formal
sessions in Congress are scheduled to begin January 19, 2010. Sen.
Pelosi, however, plans to continue to work with key committee chairs
and other Democratic leaders prior to the official sessions..