House Leaders Roll Out Merged Health Care Reform Legislation

Today, House Democratic leaders unveiled the chamber's final health reform bill (HR 3962), which includes a public health insurance option favored by moderates that would have providers negotiate their reimbursement rates directly with the government, the Washington Post reports.

When announcing the bill, House Speaker Nancy Pelosi (D-Calif.) said, "Today we are about to deliver on the promise of making affordable, quality health care available for all Americans. … We are putting forth a bill that reflects our best values and addresses our greatest challenges" (Murray [1], Washington Post, 10/29).

The final version of the bill is more centrist and less costly than versions of reform legislation passed by two House committees earlier this year (Murray [2], Washington Post, 10/29). House Democrats held a rally Thursday to release the bill and aim to take it to the floor by next week, with a final vote before Veterans Day on Nov. 11 (Pear, New York Times, 10/29).

Public Option

The most contentious issue for Democrats in recent weeks has been what form the chamber's version of a public option would take.

Moderate Democrats advocated including a public option in which doctors directly negotiate reimbursement rates with the government.

Liberals prefer a more "robust" version of the public option in which reimbursement rates would be tied to Medicare rates plus 5%.

A third option would create a negotiated-rate option but would trigger a Medicare-plus-5% system if the negotiated rates failed to generate sufficient savings (California Healthline, 10/28).

Liberal Democrats have said that the more robust option would save $85 billion more than the negotiated rates plan over a decade, according to budget analyses (Allen/Soraghan, The Hill, 10/28).

Moderates counter that Medicare reimbursement rates already are subject to regional disparities that put rural providers at a disadvantage, a problem that would only worsen if the public option utilizes Medicare rates.

Last week, House Speaker Nancy Pelosi (D-Calif.) signaled that she had enough votes to ensure passage of the robust option, which she repeatedly had said would provide her with the most leverage during conference negotiations to meld House and Senate reform bills. But subsequent whip counts showed that the robust plan had fewer than the 218 votes needed to guarantee its passage.

The release of a Senate plan on Monday containing a version of the public option that allows states to determine whether they will participate further softened Pelosi's insistence on including the robust option in the House bill (California Healthline, 10/28).

Liberals offered mixed reactions to the selection of the negotiated-rate plan (O'Connor, Politico, 10/28).

Rep. George Miller (D-Calif.), chair of the House Education and Labor Committee, emphasized the resurgence of political momentum for any form of a public option. "Most of you all thought the public option was dead," he said, adding, "Rumors of its death were greatly exaggerated" (Levey/Hook, Los Angeles Times, 10/29).

Rep. Lynn Woolsey (D-Calif.), co-chair of the Congressional Progressive Caucus and a vocal proponent of the robust option, noted the progress liberals have made in pushing for a public option. "We were laughed at in August," she said, adding, "In May, it was like we didn't even exist" (Politico, 10/28).

But Woolsey also reserved judgment on the final bill, saying that she and other progressives still need to see its specific language. "We'll be insisting on it being as strong as it possibly can. If it isn't, we won't be supporting it," she said (Vaughn, Wall Street Journal, 10/28).

Rep. Raul Grijalva (D-Ariz.), also a co-chair of the Congressional Progressive Caucus, signaled that he would continue fighting for a robust option. "I will insist on a Medicare-plus-5 amendment on the floor so that the full caucus can vote on it," he said, adding, "We are hopeful that the Rules Committee will allow this amendment, which has tremendous public support, to be voted on for the record" (The Hill, 10/28).

Members of the Progressive Caucus, the Congressional Black Caucus and the Congressional Hispanic Caucus will travel to the White House to meet with President Obama Thursday.

Woolsey said that she and other progressives will press Obama to take a firm stance on the need for a public option (Politico, 10/28).

Woolsey said, "He needs to hear from us that he needs to support the public option," adding, "He's not saying it loud enough. We want to make sure he lets the Senate know he wants a public option in the bill" (Los Angeles Times, 10/29).

Even some moderates offered only tepid support for the bill.

Rep. Jim Matheson (D-Utah), a member of the fiscally conservative Blue Dog Coalition, was asked if he would support the bill now that it includes the negotiated-rates plan. "I don't know," he said, adding, "It's an important issue. But it's not the only issue. It has never been the only issue" (Politico, 10/28).

Medicaid

The House bill also would expand eligibility for Medicaid in an effort to reduce the legislation's cost (Murray [1], Washington Post, 10/29). Those who earn less than 150% of the federal poverty level -- about $16,245 annually for an individual and $33,075 annually for a family of four -- would be eligible for Medicaid coverage under the bill (Los Angeles Times, 10/29).

Previous versions of the bill had raised the threshold to 133% of the poverty level. Proponents of the eligibility expansion say that it would be cheaper to provide low-income people with insurance coverage under Medicaid than it would be to offer them subsidies for private insurance coverage.

The bill still would include subsidies for middle-income residents who do not have access to affordable coverage through their employers (Murray [1], Washington Post, 10/29).

Costs, Coverage

Democratic leaders say that the bill would cost less than the $900 billion limit Obama has set for health care legislation and that it would not increase the federal deficit over the next 10 years (New York Times, 10/29).

The bill is projected to provide coverage for 35 million people who are currently uninsured. The bill would include mandates for U.S. residents to purchase insurance and for large employers to provide health benefits for workers (Los Angeles Times, 10/29).

Much of the bill's cost would be paid for with a new surtax on high-income U.S. residents, commonly called a "millionaire's tax."

Earlier versions of House legislation had set the threshold for the tax at annual earnings of $280,000 for individuals and $350,000 for couples. The final bill is expected to raise those levels to $500,000 for individuals and $1 million for couples, meaning it would affect three-tenths of 1% of U.S. households (New York Times, 10/29).

That tax plus changes to Medicare and Medicaid are expected to net $500 billion in cost savings over 10 years, according to analyses from the Congressional Budget Office (Murray [1], Washington Post, 10/29).

Some Senate Democrats oppose the millionaire's tax.

They prefer a tax on insurance plans with high premiums (Wayne/Epstein, CQ Today, 10/28).

Liberals generally oppose this tax, arguing that it would negatively affect union workers (Hunt/House, CongressDaily, 10/29).

According to CQ Today, House Democrats also might suggest creating a single national health insurance exchange instead of state-based exchanges, which are preferred in the Senate.

The House bill also will include a fee on medical device manufacturers. Rep. Allyson Schwartz (D-Pa.) said the fee would raise $20 billion over a decade.

According to House Energy and Commerce Committee Chair Henry Waxman (D-Calif.), the House bill includes a provision to immediately create a federally subsidized "high-risk pool" for people who currently are excluded from purchasing private insurance because of pre-existing conditions (CQ Today, 10/28).

The bill also would prohibit insurers from denying coverage to people based on pre-existing conditions (Los Angeles Times, 10/29).

Abortion, Immigration

House leaders still have not made final decisions about some of the bill's most controversial topics, the Journal reports. Some of those decisions might be hammered out during a meeting of the House leadership scheduled for Thursday afternoon (Wall Street Journal, 10/28).

Abortion is one of two "sticking points in the legislation," according to the Washington Post (Murray [1], Washington Post, 10/29).

The House bill likely will include a provision limiting the use of taxpayer funds for abortion services by forcing insurance companies that cover such services to separate funds used to pay for abortion from funds received from the government (Los Angeles Times, 10/29).

Immigration also remains a contentious issue, with some representatives concerned about whether the legislation would allow undocumented immigrants to receive federally funded health care (Murray [1], Washington Post, 10/29).

Implementation

According to Pelosi spokesperson Nadeom Elshami, some of the bill's components would be implemented before 2013, a change from earlier versions of the House bill. Most of the taxes in the bill would take effect in 2010, and many benefits -- such as insurance industry reforms -- would take effect in 2013 (CongressDaily, 10/29).