Senate Finance Panel Members Inch Closer to Deal on Health Reform

A bipartisan group of six Senate Finance Committee members working to reach a deal on health care reform legislation is considering provisions that would omit an employer mandate and a public plan option -- two top Democratic priorities -- from the committee reform bill but would attempt to control costs, the AP/Detroit Free Press reports (Espo, AP/Detroit Free Press, 7/28).

Sen. Olympia Snowe (R-Maine) emphasized that no final decision on an employer mandate or a public plan has been made (Budoff Brown, Politico, 7/27).

However, Snowe added that "it's safe to say" that instead of a public health insurance option, the final bill is "probably" going to call for the establishment of not-for-profit health insurance cooperatives (Edney, CongressDaily, 7/28).

She said, "There is not a broad-based employer mandate" in the plan, noting that 170 million U.S. residents receive health coverage through their employers. She added, "We don't want to undermine [the employer-based insurance system] or create a perverse incentive where employers drop the coverage because their employees could potentially get subsidies through" a health insurance exchange (Politico, 7/27).

Instead, the committee is considering a "free rider" provision that would require businesses with 50 or more employees to contribute to the cost of tax subsidies provided to workers through an exchange and pay 50% of the national average cost of Medicaid for workers who are enrolled (CongressDaily, 7/28).

Snowe also said, "We're continuing to explore each and every avenue with respect to financing of the various proposals" (Drucker, Roll Call, 7/27).

The group is considering imposing an excise tax on health insurance companies that sell policies that are high above the national average.

According to Snowe, the proposal would affect more than "gold-plated Cadillac" plans that cost $40,000 annually, but also might affect plans that cost "in the vicinity of $25,000" annually (Hulse/Pear, New York Times, 7/28).

Democratic priorities expected to be included in the Senate Finance bill include an individual mandate and rules prohibiting insurers from denying applicants or charging higher premiums based on pre-existing conditions, according to the AP/ Free Press.

The bill also is likely to establish a commission responsible for reining in Medicare costs through recommendations that would have to be approved by Congress without amendments (AP/Detroit Free Press, 7/28).

Snowe indicated that one challenge the group continues to discuss is how to expand Medicaid without burdening state budgets (Roll Call, 7/27).

Other provisions that could be added include:

• Fees on new products from medical device manufacturers and makers of brand name and generic drugs; and
• One year of a long-term plan to adjust Medicare reimbursement fees (AP/Detroit Free Press, 7/28).

Reaction

On MSNBC's "Rachel Maddow Show" on Monday, former Gov. Howard Dean (D-Vt.) said that if the "free rider" provision and the co-op plan are part of the final Senate Finance bill, "I fear for the future of health care reform because that is not health care reform" but rather "health insurance reform." He said a co-op plan is a "fake public option" and a "shame" (Politico, 7/27).

Committee Chair Max Baucus (D-Mont.) said, "Our group of six is making more headway -- more progress," adding, "We're going to get an agreement here. It's just that it's complicated stuff" (Roll Call, 7/27).

According to the New York Times, "The battle over health care is all but paralyzed as everyone awaits the outcome of their talks" (Herszenhorn/Pear, New York Times, 7/28).

U.S. Chamber of Commerce Supports the Finance Committee

The U.S. Chamber of Commerce on Monday sent a letter to key Senate Finance Committee members, praising their bipartisan efforts and encouraging them to "act promptly, preferably before the August recess, to approve a bipartisan bill consistent with these principles, as it is now apparent that we will be forced to oppose the legislation being considered in the House," The Hill reports.

The letter, signed by USCOC's chief lobbyist Bruce Josten, said, "Restructuring one-sixth of the U.S. economy is too important to pursue on a one-party basis." It added, "Unfortunately, the U.S. House has done just that."