Super Tuesday

Senator Harry Reid (R - NV) announced on October 8 that the Senate Finance Committee will vote on its proposed America's Healthy Future Act on Tuesday, October 13.  The Senate Finance Committee is the last of the congressional panels that will consider health legislation before full consideration in the House and Senate.  While it's hard to know what the outcome will be, it appears a passing Committee vote may include at least one key Republican, Senator Olympia Snowe (R - ME) who was part of the famed "gang of six."  Senator Snowe, however, has not yet publicly stated how she will vote.  Another key Republican, Senator Chuck Grassley (R - IA), wasted no time in expressing that the bill will be steeped in new taxes to offset the budget neutrality and signaling that he will likely not vote for the bill.  But not all Democrats are on board as two key Democrats, Senator Jay Rockefeller (D - WV) and Ron Wyden (D - OR), have expressed skepticism over the bill's future.  Neither one has stated how they will vote with Senator Rockefeller wanting a public option and Senator Wyden wanting a more conservative approach to expand coverage through existing insurance companies.  With the bill not requiring small businesses to provide coverage to employees and no public option in play, the bill may perform well with moderate Democrats, especially with positive news from the CBO on the bill's cost-containment.  After the vote in the Senate Finance Committee, the various proposals from both chambers will be merged.  Currently, the House is working on fusing the three bills that were previously passed out of committee. 

That will be $829 billion, please!

The Congressional Budget Office (CBO) released its cost estimate for the Senate Finance Committee's America's Healthy Future Act on October 7.  The cost is a cool $829 billion.  And it will even lower the federal deficit by $81 billion according to the CBO.  While this cost estimate was welcome news to most Senate Democrats, it was a rallying cry for many, including Senate Republicans.  As the CBO notes, most of the costs by far come from a proposed expansion of Medicaid eligibility and insurance plan subsidies.  But there are still a number of unresolved issues that have caused a stir among health industry heavyweights – namely hospitals.  These include the CBO's estimate that the bill would only expand coverage for current non-elderly residents without insurance from its current 83% to 91% over the next 10 years - leaving about 25 million uninsured (with 1/3 of these being illegal immigrants).  Another interesting finding by the CBO is that the touted public option alternative of co-ops would likely have little impact on total enrollment estimates because "they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments."  The American Hospital Association and Federation of American Hospitals have expressed concern that these coverage estimates are inconsistent with an agreement reached with Senator Baucus earlier in the year in exchange for their health reform support.  The agreement, which included $155 billion in payment cuts (2/3 from cuts in adjustments to yearly payment updates and $50 billion from cuts to disproportionate share payments) was "conditioned" on 94% coverage for all residents (97% for U.S. citizens).  This sizeable gap will be a point of friendly discussion over the next few weeks between industry lobbyists and Senate aides to be sure. 

Senator Grassley (R - IA) is apparently feigning his support with the remark that "[u]ninsured individuals would pay a tax for not obtaining government-approved health insurance.  Employers who already offer health insurance would face a penalty if their workers choose subsidy-eligible insurance.  With all of this, the bill spends nearly a $1 trillion and still leaves 25 million people without health insurance.  That's not much bang for the buck."  But of course, CBO Director Doug Elmendorf noted that the cost estimate could change significantly if and when the bill is converted into actual legislative language.  No pressure, Senator Reid (D - NV). 

The CBO Cost Analysis can be found here:  http://www.cbo.gov/doc.cfm?index=10618

Give Me a Break

The Senate Finance Committee's health reform bill has had its fair share of hands on the wheel during the past couple of weeks.  Many interested groups have secured favorable terms through the bill's amendment process, including tax breaks and exemptions from other cost-cutting measures.  For example, hospitals won a 10-year exemption from cost-cutting recommendations that would be made by a federal commission charged with controlling Medicare spending.  Other "winners" include coal miners, emergency workers, and those in "high-risk" jobs, all who received a break on a tax that would apply once the cost of a family health insurance plan exceeded a set limit.  Others include clinical labs, which avoided an annual tax that would have been created under the Senate Finance Committee bill.  And physicians who perform medical imaging tests in their offices side-stepped what would have been more substantial cuts in Medicare reimbursement.  Given the compromise that will be necessary to condense health reform into a final bill, it will be interesting to see which groups or special interests ultimately come out on top.