Senate Finance Panel Making Progress Toward Health Care Agreement
On Tuesday, the Senate Finance Committee's six-member bipartisan negotiating group tentatively agreed to a plan that would result in an additional $35 billion in cost reductions from Medicare over the next 10 years, along with larger amounts in the years following, the AP/Boston Globe reports.
Under the group's plan, an independent commission would be authorized to annually recommend changes in Medicare that would take effect automatically unless Congress intervened, the AP/Globe reports.
Congressional officials familiar with the group's private discussions said the plan is designed to gradually change Medicare's payment structure into one that more clearly rewards quality of care as opposed to quantity (Espo/Werner, AP/Boston Globe, 7/29).
On Saturday, the Congressional Budget Office said a similar plan by the Obama administration for an independent advisory council that would set Medicare payment rates would save just $2 billion over the next 10 years (California Healthline, 7/27).
Other Elements of the Proposal
According to the Washington Post, the Finance Committee's reform bill likely also will include:
- An incentive plan for businesses that offer employees health insurance coverage instead of a more restrictive employer coverage mandate;
- More targeted tax hikes, instead of a surtax on high-income residents that the House bill (HR 3200) proposes; and
- Tax-deduction caps for high-income taxpayers that the White House is seeking (Murray/Kane, Washington Post, 7/29).
CongressDaily reports that further details emerged on Tuesday about the "free rider" provision that the Finance Committee is considering.
The provision would require businesses that do not offer employee health insurance benefits to contribute to the cost of tax subsidies provided to workers to help purchase coverage through an exchange.
The provision also would include a so-called "firewall" to prevent most employees who might receive insurance from their employers from switching to the exchange, according to CongressDaily (Edney, CongressDaily, 7/29).
Committee Democrats Support Tax on Insurers
A recent proposal to impose taxes on health insurers that offer the most costly plans as a way to help pay for reform appears to be drawing support from Finance Committee Democrats, CongressDaily reports.
Following a meeting Tuesday morning with the members, committee Chair Max Baucus (D-Mont.) said the idea is "gaining a lot of currency."
Sen. John Kerry (D-Mass.), who proposed the plan, said, "There is a consensus building now that it is fair to ask the most expensive plans in America to contribute so that we begin to drive the costs down."
Sen. Debbie Stabenow (D-Mich.) -- who has expressed concerns with an initial proposal to cap the tax exclusion for employer-sponsored benefits because her state is home to major employee unions -- said the committee is mulling the taxes for health plans valued at $25,000 and above.
However, Kerry noted that the specific value of plans that would be affected by the taxes remains a "moving target" (Edney, CongressDaily, 7/28).
Conrad Talks About Co-op Plan
On Tuesday, Senate Budget Committee Chair Kent Conrad (D-N.D.), a member of the Finance Committee, offered more details of his proposal to establish a system of health care cooperatives, CongressDaily reports.
Conrad said that the plan under discussion would allow co-ops to function on state, regional and national levels. He said states would be authorized to establish co-ops at the regional level, but he did not indicate how a national co-op would be established or monitored.
The system would need $6 billion in startup funds and it would be capable of enrolling 12 million residents, he said. He added that HHS would create an interim board to oversee the policies of the system.
CongressDaily reports that it is unclear if the 12 million people would be uninsured residents or people who have private insurance coverage.
Conrad said that actuaries have projected that a co-op would need 25,000 enrollees to be financially stable and 500,000 enrollees to enable negotiations with providers (CongressDaily, 7/29).
According to the Los Angeles Times, the Finance Committee is "leaning" toward the creation of a co-op system in its bill because it would offer consumers more choice while also relieving Republicans' concerns that a public plan option would lead to increased government interference in health care matters.
In addition, the committee's leadership and members insist that their bill would offer the only hope of reaching a bipartisan consensus that would avert a GOP-led filibuster, the Times reports.
Conrad said, "Every single Republican is opposed to a public plan," adding, "If one just does the numbers, it's very clear to get the votes, you've got to find some compromise here" (Levey/Hook, Los Angeles Times, 7/29).
White House Addresses Co-op Plan
The Obama administration appears to be more open to the idea of the co-op system as progress on health reform slows in Congress, CQ Politics reports.
On Tuesday, White House press secretary Robert Gibbs said administration officials have not yet reviewed the Finance Committee's draft outlines for its bill. Gibbs added that he is unaware of any efforts by White House strategists to convince committee negotiators to reconsider a government-administered insurance plan.
Gibbs insisted that President Obama will closely review all congressional bills for health reform that are delivered to him, saying, "The president wants something that accomplishes the principles and the goals that he set forth in this process ... that honestly cuts costs, honestly changes the direction of spending on health care both for families, small businesses and for governments" (Bettelheim, CQ Politics, 7/28).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.