November 30, 2009

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

HOLIDAY CHEER

The Senate is set to begin debate today of its proposal for sweeping health care reform.  The Senate's proposal, H.R. 3590, which is titled the Patient Protection and Affordable Care Act, has a tough road ahead.  Advancing the bill will require all Senate Democrats and a small but significant combination of Independents or moderate Republicans to lend their support in order to reach the magic number of 60 votes.  Keep in mind that the Senate's procedural vote to allow debate narrowly passed with only 60 votes.

All Those in Favor Say Aye

The public option and abortion funding are the two issues of many that appear to be affecting whether the Democratic leadership can salvage the necessary 60 votes in order to advance H.R. 3590.  But if Democratic leadership bends on both or either of these two issues, more left or moderate-leaning Democratic Senators may pull their support.

The debate process is expected to begin with each party submitting a series of amendments (dozens are expected) to the proposed bill.  Besides public option and abortion funding, these amendments are expected to address subjects such as drug pricing, malpractice reform, taxes, and graduate medical education funding.  And these amendments will each require 60 votes to proceed.  To be sure, the ensuing debate, both procedurally and substantively, will be complicated. 

Abortion Funding, a Very Sensitive Issue

The issue of abortion funding has taken on a significant role during the health care reform debate.  The crux of the issue being that moderate Democrats have promised to vote against any bill that does not permit illegal immigrants to purchase health insurance through an exchange and that also does not contain tight restrictions on any form of federal funding for abortion.  But more left-leaning Democrats have stated that they will pull their backing for any bill including such provisions. 

H.R. 3590's pre-amendment approach is that federal premium or cost-sharing subsidies may not be used for purchasing insurance coverage except for cases of incest, rape, or where life-endangering to the mother.  Another key element is that federal subsidies must be segregated from any private premium payments used for purchasing coverage beyond the three exceptions.  An alternative approach would prohibit federal premium or cost-sharing subsidies from being used to purchase any insurance coverage through an exchange that covered abortions other than those related to incest, rape or where life-endangering to the mother.  Also, private insurers that offer elective abortion coverage would be required to offer an exchange-participating plan that is "identical in every respect" except for the elective coverage.

Headcount:  Why the Public Option will be a Hurdle

While there are a number of issues that will prove to be hurdles for Senate Democrats to overcome, the presence and structure of a public option will be paramount.   The current proposal crafted under the leadership of Senate Majority Leader Harry Reid (D-NV) contains a public option with a state opt-out provision.  But more moderate Democratic Senators who voted to begin the debate [Senators Mary Landrieu (D-LA), Blanche Lincoln (D-AR), and Ben Nelson (D-NE)] have all indicated that they would not support a final bill containing a public option.  There is some talk on Capitol Hill, however, that a public option alternative is in the works that may appease the likes of Senators Landrieu, Lincoln, and Nelson.  And do not forget Senator Olympia Snowe (R-ME).  She has stated publicly that she would consider a public option "trigger/opt-out" hybrid as an acceptable solution.  Such a solution would permit states to opt-out only after private insurers were unable to achieve certain established standards for coverage and affordability within a specified time period.

How much will this Cost Again?

The Congressional Budget Office ("CBO") has estimated that H.R. 3590 would cost $848 billion over 10 years and reduce the deficit by $130 billion.  Some have been quick to point out, however, that the estimate was calculated based on costs from 2010 to 2019, but the Senate's reform plan would not be fully implemented, and substantial costs would not begin to accumulate, until 2014.  So, critics say, the cost of the bill over the first 10 years should instead be calculated from 2014 to 2023, which amount surely would be much higher than the CBO's current estimate.  Another worry is that any initial revenue generated by Senate's current bill would not be applied against the deficit, but instead would be eaten up by new projects, leaving the bill's eventual costs unmatched by any deficit reduction. 

A copy of the CBO's report can be found here: http://www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf.

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.