Senate Finance Panel Kicks Off Markup of Health Care Reform Bill

As the full Senate Finance Committee on Tuesday began work on marking up its version of health reform legislation, Democrats and Republicans "formed clear battle lines" and more details were revealed on changes made to the proposal by committee Chair Max Baucus (D-Mont.), the Washington Post reports (Murray/Montgomery, Washington Post, 9/23).

According to The Hill, opening statements by 22 senators on the committee "offered more of the same rhetoric" regarding partisan positions on a health system overhaul.

GOP members criticized the legislation as a government takeover of the health care system and criticized the legislation for its potential for tax increases, funding of abortions and allowing undocumented immigrants access to publicly funded care.

Meanwhile, Democrats said the bill would extend health coverage to millions more U.S. residents but expressed skepticism about whether the legislation goes far enough to help middle-income U.S. families afford coverage.

Despite the criticisms, Baucus seemed upbeat as the negotiations began. He said, "My colleagues, this is our opportunity to make history," adding, "Let us make this a time for progress. Let us seize the moment" (Young, The Hill, 9/23).

More Details on Baucus' Concessions Revealed

Meanwhile on Tuesday, more details were revealed about concessions made by Baucus in an attempt to garner more support for the legislation, Politico reports. According to Politico, Baucus compromised on several provisions to appease Democrats on the committee and also accepted part or all of 10 amendments filed by Sen. Olympia Snowe (R-Maine), who could be a "key swing vote" (Budoff Brown, Politico, 9/23).

The changes include:

• Raising the threshold for the amount of unreimbursed medical expenses that U.S. residents can deduct from their taxes from 7.5% to 10% of adjusted gross income, beginning in 2013 (Vaughn et al., Wall Street Journal, 9/23).
• New limits on itemized tax deductions for consumer products, such as condoms and contact lenses, under a proposed tax on medical device manufacturers. However, a proposal to establish a $4 billion annual fee on the medical device industry would remain in the bill (Alonso-Zaldivar, AP/Atlanta Journal-Constitution, 9/22).
• A new "scaled back" threshold on the proposed excise tax on insurers that offer so-called "Cadillac" or highest-priced insurance plans -- which critics have said insurers would pass on to consumers in the form of higher premiums -- so that it would affect fewer people (Wall Street Journal, 9/23). Baucus raised the threshold at which the tax would be triggered for high-risk professionals, such as firefighters, and seniors (Politico, 9/23). However, Baucus proposed raising the excise tax to 40%. In addition, the threshold would be indexed to the consumer price index plus 1% (Wall Street Journal, 9/23).
• A lower penalty for individuals and families who fail to obtain insurance coverage. Under the revised bill, the fee would be reduced from $3,800 to $1,900 for families whose annual incomes are $66,000 or more.
• A lower cap on the portion low- to middle-income U.S. residents would pay toward health premiums, from 13% to 12% (Politico, 9/23). After the change, individual U.S. residents who purchase coverage on the proposed insurance exchange would not pay more than $3,987 annually out-of-pocket for care and families would not pay more than $7,973 annually (Washington Post, 9/23).
• An agreement to reduce the maximum difference between premium prices for younger and elderly U.S. residents. The proposal would cap elderly U.S. residents' premiums at four times what younger U.S. residents are charged. The original draft capped elderly U.S. residents' premiums at five times what younger beneficiaries are charged.
• The elimination of $750 million in annual fees assessed on the clinical laboratory industry, although such labs would still face a temporary reduction in Medicare payments.
• A proposal that would consider quality measures when deciding on Medicare's physician fee schedule, which would begin in 2015.
• A provision that would allow federal employees to purchase health coverage through state-based insurance exchanges instead of the Federal Employees Health Benefits Program.
• A series of proposals that would require the health insurance cooperatives that would be established by the bill to comply with state insurance regulations and would prohibit the use of federal money to lobby Congress or for marketing, intended to give such co-ops fewer advantages over private insurers (Wayne, CQ Today, 9/22).

Baucus said the changes he made to the measure would raise its preliminary cost estimate from $856 billion to $900 billion. However, he noted that it still would result in a net deficit reduction (The Hill, 9/23).

The changes would be financed with $28 billion of the $49 billion the Congressional Budget Office estimated the legislation would have reduced the federal deficit by over 10 years. CBO estimated the first version of the bill would cost $774 billion over 10 years (California Healthline, 9/22).

Snowe Declines To Reveal Position

On Tuesday, Snowe took a middle-of-the-road approach in her opening remarks and declined to divulge her position on the package, Roll Call reports.

She said, "The mark before us is a solid starting point," adding, "But we are far from the finish line."

However, Snowe noted her displeasure with the length of negotiations among the bipartisan "Gang of Six," reiterating a criticism from Sen. Chuck Grassley (R-Iowa). "I, like Sen. Grassley, regretted that those negotiations prematurely concluded," she said (Drucker, Roll Call, 9/22).

Baucus Balks at Suggested Delay for Full Analysis of Bill

As part of the mark-up proceedings on Tuesday, Congressional Budget Office Director Douglas Elmendorf and his staff explained that their financial analysis was of the original bill, not the new version featuring Baucus' changes or the potential effect of the proposed amendments, Time's "Swampland" reports.

Elmendorf was asked several times about the cost of the new bill and the proposed amendments but he declined to provide answers, noting that his team did not have adequate time to analyze them.

Elmendorf said that a preliminary cost estimate of the revised version of the bill could be delivered to the committee in a few days but that a comprehensive and formal assessment would take about two weeks.

Baucus called the two-week estimate "unacceptable" and urged Elmendorf to "get us out of this box."

Elmendorf responded, "I assure you, Senator, we will be working as fast as we can," but "that process invariably takes more time than people like me and you guess it will up front" (Pickert, "Swampland," Time, 9/22).

Amendment Could Jeopardize $80 Billion Deal Between Baucus, Drug Industry

A proposed amendment that would "essentially toss out" a cost-savings deal beached in the summer between the pharmaceutical industry, Baucus and the White House during the summer prompted the first "rollicking brawl" among Democrats over the Finance Committee's draft bill, the New York Times' "Prescriptions" reports (Herszenhorn/Pear, "Prescriptions," New York Times, 9/22).

According to the Washington Post, toward the end of the negotiations on Tuesday, several committee members asked for an amendment to the full bill that would generate larger company rebates on medications the federal government purchases for low-income elderly U.S. residents.

The Post reports that the proposal could jeopardize the original agreement Baucus made with the drug industry (Connolly et al., Washington Post, 9/23).

According to "Prescriptions," several Democratic senators "raced" to attach their names as co-sponsors of the amendment, which was proposed by Sen. Bill Nelson (D-Fla.).