October 5, 2009

This weekly installment of Hall Render's Health Law Broadcast series on health care reform is designed to provide you with a brief update on significant developments from the previous week.

And 564 Amendments Later

Now that the Senate Finance Committee has completed its mark-up of America's Healthy Future Act of 2009, the challenges that lie ahead may display the democratic process at its best – or worst.  The next few weeks will be critical for the likelihood and extent of ultimate health reform regardless of the final product.  And with President Obama's apparent setbacks on the international stage in recent days, pundits are characterizing health reform success as all but necessary for the Obama Administration.  Below are significant developments and areas of interest in health reform from the past week. 

2:08 A.M.

This was the time last Friday (10/2) that the Senate Finance Committee completed its overhaul of the proposal initially submitted by Senator Max Baucus (D - MT) and seasoned with 564 amendments from various Committee members.  An actual Committee vote is expected to occur this week, but given the clear Democratic majority (and support) for the bill, its passage is all but decided.  According to Senator Baucus, "[t]his bill will lower taxes for more than 42 million Americans and reduce the federal deficit.  This bill will protect Medicare benefits for seniors.  This bill will significantly expand health coverage."

Among the more controversial issues addressed by the Committee last week were the public option and numerous Republican amendments aimed at strengthening limits on abortion coverage and medical services for illegal immigrants.  In a 13 to 10 vote, the Committee voted down most Republican amendments.  The Committee also voted down provisions to create a government-run insurance program, the so-called "public option."  This issue has been a key source of contention among members of the Democratic Party.  The Committee's Republicans, all of whom voted to reject the public option amendments, argued that a public option would eventually allow the government to control most health care by continuously growing its own plan at the expense of private insurers.

There was also some discussion among Democratic leadership in the Senate regarding an alternative to both the public option and the non-profit insurance cooperatives proposed by Senator Baucus.  This proposal would potentially give states the option of creating one of three alternatives to private insurance: a government plan, a network of co-ops or a purchasing pool modeled after the Federal Health Employees Health Benefits Plan.  Perhaps such a compromise would close the gap between those who have championed a public option, including President Obama and Speaker of the House Nancy Pelosi (D - CA), and those who have rejected the idea, including some Democrats.

Some consider the hurdles that were overcome in the Senate Finance Committee as pale in comparison to what is needed before a bill can be presented to the full Senate.  The next step in the legislative process is for Senate Majority Leader Harry Reid (D - NV) to merge the Senate Finance Committee's America's Healthy Future Act with the Senate HELP Committee's Affordable Health Choices Act, which was finalized back in July.  This step is being held out as a very rare occurrence – and a feat that many are suggesting is impossible given the complexity of the issues.

Filibuster-proof?

While having 60 votes in the Senate will prevent a filibuster on any proposed health reform legislation, there still remains the possibility that some moderate Democrats may not vote along party lines leaving filibuster as an option for Republicans.  As a result, the discussion of a controversial legislative procedure known as budget reconciliation has been raised as a maneuver Democrats may implore in order to pass reform legislation with at least 51 votes.  The reconciliation process is a political hot potato as it may allow the Democratic Party the ability to pass reform legislation with a simple majority in the Senate.

Reconciliation 101

The reconciliation budget process arises from the Congressional Budget Act of 1974 and applies to legislation affecting tax and spending as part of the federal budget formation.  Originally passed as a budgetary tool to promote deficit-reduction, the reconciliation process is usually invoked to force tax increases or spending cuts, or it can be used to pass special entitlement legislation.  Typically a reconciliation bill is a single piece of legislation that is the merger of different provisions proposed by several committees to address specific federal budget and spending issues.  If the reconciliation process is invoked with respect to health reform legislation, all spending and taxing provisions of the health legislation would likely be placed in a separate reconciliation bill.  The bill would have a reconciliation directive that would force the committee reviewing the legislation to meet certain spending or tax targets.  If the committee fails to hit the directive targets, the Budget Committee Chairperson could then introduce amendments on the floor.  After the Committee reaches consensus on the amendments, the vote goes to the floor for one up-or-down vote with limited ability to bring additional amendments.  After the competing bills are vetted between the House and Senate, a final conference report is considered on the floor of each House and then moves to the President for signature or veto.

The "Byrd-rule" Limitations

Under the reconciliation process, Congress has the ability to bundle together several provisions which may impact funding for many different programs.  The reconciliation process, however, can be hamstrung by the "Byrd-rule," named after Senator Byrd, which can allow a "point of order" contest to any amendment or provision to a bill that is deemed extraneous to the spending aspects of an entitlement or tax law.  In order for the challenged provision to survive a point of order contest, 60 votes must be secured or the provision is stricken from the legislation.

Increasing MedPAC Authority

Discussions on giving the Medicare Payment Advisory Commission (MedPAC) more authority took another step forward last week in the Senate Finance Committee.  In the Chairman's mark, Senator Baucus presented amendments that would prevent MedPAC from ending in 2019, as now scheduled, by instead making it a permanent body.  MedPAC would have oversight for reducing Medicare annual expenditures by 1.5% beginning in 2014.  MedPAC would work in concert with the Department of Health and Human Services where the Congressional Budget Office predicts $25 billion in savings can be realized between 2015 and 2019.  While MedPAC already advises Congress on Medicare financing issues, political leaders such as Senator Jay Rockefeller (D - WV), who introduced legislation earlier this year to empower MedPAC as an independent executive agency, believe giving MedPAC more oversight minimizes the Congressional politics that arises in setting the Medicare budget.  Republicans have voiced concerns over giving MedPAC too much control over the Medicare purse strings as the Commission's decision-making authority and decisions related to Medicare often influence the entire insurance industry.  

Visit our Health Law Broadcast at hallrender.com/reform for a comprehensive listing of health care reform resources.  Also sign up for health care reform alerts and periodic updates as we continue to monitor this important issue. 
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