Senators Submit More Than 500 Amendments to Health Reform Bill

Members of the Senate Finance Committee on Friday submitted 564 amendments to the financing, coverage expansion and delivery system reform portions of the draft health reform bill that committee Chair Max Baucus (D-Mont.) released last week, Politico reports (Budoff Brown, Politico, 9/19).

The proposed changes illustrate the "seemingly irreconcilable differences" of opinion on the bill among Republicans, Baucus and most Democrats, according to the New York Times.

Markup of the bill is scheduled for Tuesday (Herszenhorn, New York Times, 9/21).

According to Politico, Republicans favor a less costly bill with fewer taxes, changes to existing medical malpractice laws, reduced regulation on flexible savings accounts and the elimination of unfunded mandates on states as a result of the expansion of Medicaid.

GOP lawmakers also oppose the inclusion of a public plan within reform legislation, or even a private not-for-profit network of health cooperatives, which Baucus included in the measure.

Some Democrats have proposed changes that would strengthen the provision that would create the co-ops, while others want it replaced with a public plan.

Democrats also want to raise the amount of tax credits that would be offered to low- and moderate-income people to buy coverage and amend the proposed 35% excise tax on the highest-priced insurance plans (Politico, 9/19).

Snowe's Stake in Debate Increases

According to the Times, Baucus' challenge in the coming weeks will be to discourage Democrats from amending the reform bill so much that it prevents the plan from receiving a filibuster-proof 60 votes. As it stands, Democrats have 59 votes, and the 60th vote could come from Sen. Olympia Snowe (R-Maine), who is a member of the Finance Committee's "Gang of Six" bipartisan negotiating group and, although she submitted a number of amendments, "appears ready to get behind" the proposal, the Times reports.

Snowe submitted 21 amendments on her own, four others with Democrats, and one with a Democrat and a Republican, providing further proof that she could align with Democrats on the bill (New York Times, 9/21).

In one amendment, Snowe proposed creating "a nonprofit government corporation through which a 'safety net' plan would be provided in any state in which affordable coverage was not available" to a minimum of 95% of state residents (Pear, New York Times, 9/20).

Democrats Cite Concerns Over Cost to Taxpayers

A key sticking point among Finance Committee Democrats is the cost to taxpayers of a provision that would require all U.S. residents to obtain health coverage, CQ Today reports.

According to CQ Today, Baucus' draft has been criticized as being "too stingy" because it would require families with annual incomes up to 400% of the federal poverty level to contribute as much as 13% of their income toward premiums before they qualified for tax credits to help cover the cost of coverage.

However, the Congressional Budget Office's preliminary estimate found that the bill would reduce the federal deficit by $49 billion over 10 years and that the bulk of the savings could be used to increase the subsidies that U.S. residents would receive, according to CQ Today.

Sen. John Kerry (D-Mass.), a member of the Finance Committee, said, "We have to make this as affordable as possible to the people in middle America, the people who have incomes of $88,000 and down," adding, "They can't be paying an unfair chunk of that total income to health care" (Armstrong, CQ Today, 9/18).

Other Cost Concerns

Six moderate Senate Democrats who are not on the Finance Committee on Thursday sent a letter to Baucus urging him to focus on the bill's cost during the markup sessions scheduled to begin on Tuesday, CQ Today reports.

The letter stated that "in the past, cutting costs has been difficult due to the powerful opposition of the many special interests whose profits would be affected."

The senators -- Evan Bayh (Ind.), Mark Begich (Alaska), Amy Klobuchar (Minn.), Herb Kohl (Wis.), Claire McCaskill (Mo.) and Mark Pryor (Ark.) -- wrote, "This is our number one priority. If we pass health reform legislation without addressing the issue of health care spending, we will have failed."

They added that "there are many, wide-ranging options" that would resolve the issue of cost, and they offered Baucus their help "in making the necessary and tough decisions" (Vadala, CQ Today, 9/18).

Tax on 'Cadillac' Health Plans Has Far-Reaching Effect

A provision that would establish an excise tax on so-called "Cadillac" plans in Baucus' bill could affect more than the "well-heeled" for whom it was intended because many of the country's middle-income families and earners are recipients of such high-cost insurance policies, the New York Times reports (Abelson, New York Times, 9/21).

The proposal, developed as the bill's largest revenue generator, would enact a 35% non-deductible excise tax on insurance companies that offer coverage plans that cost more than $8,000 annually for individuals or $21,000 annually for families. Critics of the proposal are concerned that insurers would pass on the cost of the tax to customers in the form of higher premiums (Adamy/Hitt, Wall Street Journal, 9/19).

The provision is expected to raise about $214.9 billion and would affect about 8% of taxpayers. It would be implemented in 2013 over a three-year transition period in 17 states with the least-affordable health benefits as determined by the White House (California Healthline, 9/18).

People who likely would be affected by the tax include firefighters, coal miners, older workers at small businesses and owners of union shops, the Times reports (Abelson, New York Times, 9/21).

McCain Adviser Issues Memo on Insurer Fees

Last week, Douglas Holtz-Eakin, the chief economic adviser to Sen. John McCain's (R-Ariz.) 2008 presidential campaign, circulated a four-page memo among Republican senators criticizing a provision in the Finance Committee draft bill's that would collect $6 billion in fees from health insurers, the Journal's "Washington Wire" reports.

In the memo, dated Sept. 18, Holtz-Eakin suggests that the provision would cost consumers as much as $130 billion over 10 years because "the higher insurance fee will likely quickly and nearly completely be incorporated into higher insurance premiums" (Bendavid, "Washington Wire," Wall Street Journal, 9/19).