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States Keep Close Eye on Medicaid Expansion in Reform Debate

It’s been a busy week on Capitol Hill as members of Congress continued work on health care reform proposals and the public debate heated up after a number of interest groups launched advertising campaigns. 

The Senate Finance Committee is still putting together its proposal, though Chair Max Baucus (D-Mont.) has resisted pressure to say when his committee will complete work on the legislation and begin markups.

In the House, Energy and Commerce Committee Chair Henry Waxman (D-Calif.) canceled scheduled markup hearings yesterday to continue private negotiations with Blue Dog Democrats who are concerned about the cost of the reform proposal.

Outside of Washington, D.C., stakeholders are trying to shape public opinion on health care reform. 

For example, the U.S. Chamber of Commerce and other groups are asking whether the plans under consideration will actually bring about improvements to the health care system, while the Democratic National Committee’s Organizing for America is leading the charge in questioning whether the country can afford to delay action on reform.

In Biloxi, Miss., last weekend, the National Governors Association convened its summer meeting, and the Obama administration dispatched officials in hopes of boosting support for the proposed overhaul within this key group.

State budgets — the very topic that prevented NGA President Ed Rendell (D-Pa.), California Republican Arnold Schwarzenegger and a number of other governors from attending the meeting — and how health care reform might affect them were a key point of discussion in the weekend’s proceedings.

An overview of the House’s reform plan outlines changes to Medicaid and spells out what the federal government will contribute to help expand the program.

Under the House bill, anyone whose annual income doesn’t exceed 133% of the federal poverty level would be eligible for Medicaid. The federal government would assume the full cost of covering the newly eligible Medicaid beneficiaries.

The federal government also would pick up the tab for increasing Medicaid reimbursement rates to 90% of Medicare payment rates in 2011 and 100% beginning in 2012. Medicaid payment rates are set to be 80% of Medicare payment rates in 2010.

Details of these provisions are sure to draw careful scrutiny from state officials, who will be looking for an indication of how long states can expect the additional federal funding and what conditions will apply. 

While that work proceeds, here’s a rundown of debate in Congress, administration actions and efforts to influence public opinion on health care reform.


  • Following a closed-door meeting with a bipartisan group of six Senate Finance Committee members, Finance Committee Chair Max Baucus (D-Mont.) said on Monday that they have “tentatively” reached an agreement on four or five of the 12 outstanding health reform issues, Roll Call reports. Senators did not discuss the details of the negotiations with reporters, but Sen. Kent Conrad (D-N.D.) said, “It’s very clear the work over the weekend was very productive and got us a lot closer” (Drucker, Roll Call, 7/20). Baucus declined to give an estimate for when negotiations would be completed and markups on the legislation would take place (Rubin, CQ Today, 7/20).
  • On Monday, a bipartisan group of Senate Finance Committee members considered a proposal by Sen. John Kerry (D-Mass.) that would help finance health reform by imposing a tax on health insurers that offer the most costly plans, CongressDaily reports (Cohn/Edney, CongressDaily, 7/21). The proposal, offered as an alternative to capping the tax exclusion for employer-sponsored health benefits, is similar to one that former Sen. Bill Bradley (D-N.J.) proposed during the health care overhaul attempt in 1994. Details of Kerry’s proposal have not been released, but Conrad said that a premium tax plan is being discussed (Reichard, CQ HealthBeat, 7/20).
  • On Thursday, Senate Majority Leader Harry Reid (D-Nev.) said that he wants to introduce health care reform legislation on the Senate floor the week of July 27, saying that it is “doable” to pass the bill by the August recess. Reid said, “We’ve had this schedule for months now and I think we can meet the schedule that has been set,” adding, “We’re not interested in deadlines. We’re interested in trying to improve the health care delivery system of our country” (Bolton, The Hill, 7/16).
  • On Thursday, NPR’s “Morning Edition” featured a discussion with Sens. Christopher Dodd (D-Conn.) and Orrin Hatch (R-Utah) about the partisan divides related to the Health, Education, Labor and Pensions Committee health reform legislation (Inskeep, “Morning Edition,” NPR, 7/16).

House Energy and Commerce Committee

The House Energy and Commerce Committee is considering a number of amendments as it marks up the House bill. Highlights appear below.

  • Committee Chair Henry Waxman (D-Calif.) ruled out of order an amendment by Rep. Michael Burgess (R-Texas) that would have capped non-economic damages — such as pain and suffering awards — in medical malpractice cases at and above the level of $250,000.
  • The committee approved by voice vote an amendment designed to help former military medics get jobs as civilian paramedics.
  • Rep. Frank Pallone (D-N.J.), chair of the committee’s Health Subcommittee, offered an omnibus amendment, comprised of provisions from 13 separate bills drafted by committee Democrats.
  • The committee approved by voice vote an amendment from Rep. Gene Green (D-Texas) that would instruct the HHS secretary to create a program for mental and behavioral health training.
  • Rep. Tammy Baldwin (D-Wis.) offered an amendment that would create a program for HHS to award grants for educational campaigns on end-of-life issues (Nylen/Wayne, CQ HealthBeat, 7/17).
  • By voice vote, the committee approved an amendment to the House bill that would create a new voluntary insurance program meant to help families with the costs of long-term health care, the AP/Las Vegas Sun reports. The program would be funded by a voluntary payroll deduction. The Senate HELP Committee recently approved a similar measure (AP/Las Vegas Sun, 7/20).

Blue Dog Coalition

  • Despite two House committees approving health reform legislation (HR 3200) last week, it is not clear whether it will pass the House Energy and Commerce Committee, CongressDaily reports. Eight members of the fiscally conservative Blue Dog Coalition sit on the panel, and the group has expressed concern with the legislation. If Blue Dogs voted as a bloc with Republicans, opponents of the bill would have a 31-28 majority on the panel. No Blue Dogs on the two House committees that passed the legislation — Education and Labor, and Ways and Means — voted for the legislation (Wayne, CQ Today, 7/19).
  • The “most serious threat” remaining for House reform legislation might be from members of the Blue Dog Coalition who want deeper cost cuts, a more limited public plan option and a solution to regional disparities under Medicare, Roll Call reports. The Blue Dog Coalition continues to advocate for these changes in the House Energy and Commerce Committee — the final House committee yet to finish marking up its portion of the bill and hold a vote on the legislation before it can be sent to the floor (Roll Call, 7/20). Late last week, Rep. Mike Ross (D-Ark.), chair of the Blue Dogs’ Health Care Task Force, said that he believes the markup has only a 50% chance of continuing through this week (Edney, CongressDaily, 7/17).
  • NPR’s “All Things Considered” on Saturday reported on Blue Dogs‘ resistance to the House reform bill. The segment includes comments from Ross, who said the coalition’s health care task force would need to see more protections for small businesses and rural health care providers before his group would support the bill (Raz, “All Things Considered,” NPR, 7/18).
  • During markup last week, six Blue Dogs helped to approve a Republican amendment on the bill despite objections from Energy and Commerce Committee Chair Henry Waxman (Roll Call, 7/20). The 29-27 vote approved an amendment from Rep. John Sullivan (R-Okla.) that would require the HHS secretary to end duplicative government health programs (Hunt, CongressDaily, 7/17).
  • House lawmakers are considering attaching the pay/go bill (HR 2920) to the health care reform bill, according to House Majority Leader Steny Hoyer (D-Md.), CQ Today reports. The bill would require any tax cuts and mandatory spending increases that add to the deficit to be offset. Some observers question whether including pay/go legislation in a health reform bill could entice certain members of the fiscally conservative Blue Dogs (CQ Today, 7/14).Other House
  • During an appearance on CBS’ “Face the Nation” Sunday, Rep. Charles Rangel (D-N.Y.) — chair of the House Ways and Means Committee, one of the five congressional panels crafting the reform legislation — reiterated the chamber’s intention to meet the August deadline (Dennis, Roll Call, 7/19).
  • On Friday, 22 freshmen House Democrats sent a letter to Speaker Nancy Pelosi (D-Calif.) stating their strong objection to a proposal to fund health care reform partly through a surtax on high-income Americans, Roll Call reports.  The group met with Pelosi twice last week to argue that the surtax would hurt small businesses (Dennis, Roll Call, 7/17). In addition, several freshmen Democrats met with President Obama and White House Chief of Staff Rahm Emanuel on Friday to discuss the proposed tax (Weisman, Wall Street Journal, 7/20).
  • At least 30 House Democrats and Republicans said they will oppose House reform legislation unless it specifically excludes abortion funding, Roll Call reports. The lawmakers said that draft versions of the House bill included the option for the Health Benefits Advisory Committee to recommend that abortion services be included as part of a benefits package for the government-subsidized health plan (Bendery, Roll Call, 7/14).

Other House

  • During an appearance on CBS’ “Face the Nation” Sunday, Rep. Charles Rangel (D-N.Y.) — chair of the House Ways and Means Committee, one of the five congressional panels crafting the reform legislation — reiterated the chamber’s intention to meet the August deadline (Dennis, Roll Call, 7/19).
  • On Friday, 22 freshmen House Democrats sent a letter to Speaker Nancy Pelosi (D-Calif.) stating their strong objection to a proposal to fund health care reform partly through a surtax on high-income Americans, Roll Call reports.  The group met with Pelosi twice last week to argue that the surtax would hurt small businesses (Dennis, Roll Call, 7/17). In addition, several freshmen Democrats met with President Obama and White House Chief of Staff Rahm Emanuel on Friday to discuss the proposed tax (Weisman, Wall Street Journal, 7/20).
  • At least 30 House Democrats and Republicans said they will oppose House reform legislation unless it specifically excludes abortion funding, Roll Call reports. The lawmakers said that draft versions of the House bill included the option for the Health Benefits Advisory Committee to recommend that abortion services be included as part of a benefits package for the government-subsidized health plan (Bendery, Roll Call, 7/14).

President Obama

  • On Thursday, Obama met separately with moderate lawmakers Sen. Olympia Snowe (R-Maine) and Sen. Ben Nelson (D-Neb.) in an effort to garner support for health reform legislation, Roll Call reports. Obama held his first session on health care with Nelson, who did not speak with reporters. Following a 45-minute session with Obama, Snowe said that she disagrees with Obama’s push for a Senate floor vote on reform legislation before the August recess (Koffler, Roll Call, 7/16). According to Snowe, Obama’s push for a vote before the recess is a “Herculean goal.” However, she added that she is optimistic about crafting a bipartisan bill and merging the two Senate reform bills. Following her meeting with Obama, Snowe met with Sens. Kent Conrad (D-N.D.), Mike Enzi (R-Wyo.) and Chuck Grassley (R-Iowa) in a closed-door session (Wolf et al., ABC News, 7/16).
  • In a White House Rose Garden press conference last week, President Obama restated his call for completing health care legislation by the congressional August recess, Roll Call reports (Koffler [1], Roll Call, 7/15). Obama said, “It’s time for us to buck up Congress, this administration, the entire federal government to be clear that we’ve got to get this done” (Alonso-Zaldivar, AP/Atlanta Journal-Constitution, 7/15). NPR’s “All Things Considered” reported on the press conference (Liasson, “All Things Considered,” NPR, 7/15).
  • Last week, Obama also met with Republican Sens. Saxby Chambliss (Ga.), Susan Collins (Maine), Bob Corker (Tenn.) and Lisa Murkowski (Alaska) to discuss health care reform legislation. According to a White House aide, Obama and the senators “discussed different ways in which the health care delivery system can be reformed to eliminate waste and lower costs while also improving quality of care” (Koffler [2], Roll Call, 7/15).
  • Last week, ABC’s “World News with Charles Gibson” featured an interview with Obama on health care reform (Johnson, “World News with Charles Gibson,” ABC, 7/15). “World News” also reported on Obama’s need for Democrats to be united on health care reform (“World News with Charles Gibson,” ABC, 7/15).
  • CBS’ “Evening News with Katie Couric” also featured an interview with Obama on health care reform last week (LaPook, “Evening News with Katie Couric,” CBS, 7/15).


  • On Friday, White House National Economic Council Director Larry Summers said that the Obama administration will insist on the use of “hard scoreable measures” to analyze the cost of health care reform legislation. He added that while he understands that Elmendorf could not “give credit” for preventive health care in his analysis of reform legislation, White House officials “are going to insist on doing the difficult things that don’t score” (CongressDaily, 7/17).
  • In an appearance on “Fox News Sunday,” White House Office of Management and Budget Director Peter Orszag said, “I think the chances are high” that the August deadline will be met (Henry, New York Times, 7/20). On the program, Orszag also said that he is “not prepared to say explicitly” that health care reform legislation would prohibit the use of federal tax revenue to fund abortion coverage.  The National Right to Life Committee issued an analysis of the House bill, stating, “There is no doubt that coverage of abortion will be mandated, unless Congress explicitly excludes abortion from the scope of federal authority to define ‘essential benefits'” (Pear/Liptak, New York Times, 7/20).
  • In remarks later on CNN’s “State of the Union,” Orszag said, “It’s still the goal. We think we can make that” (New York Times, 7/20). Orszag also acknowledged that White House officials met with members of the House Blue Dog Coalition and Senate Finance Committee over the weekend to respond to concerns about reform efforts (Scully, CongressDaily, 7/19).
  • Speaking on NBC’s “Meet the Press,” HHS Secretary Kathleen Sebelius said President Obama is “very clearly urging the House and Senate to stay at the table and work.” She added, “They’re working very hard. … We think this can be done; the House and Senate are on track and on time” (Lengell, Washington Times, 7/20).

Republican Opposition

  • A dozen members of the House Republican Doctors Caucus sent a letter to the American Medical Association late last week criticizing its endorsement of the House reform bill. The members wrote that AMA should not be satisfied with the choice of plans that would exist in the national health insurance exchange because the government-run public plan option would have an unfair advantage over private insurers and eventually run them out of business (Norman, CQ HealthBeat, 7/17).
  • In remarks prepared for an address to the National Press Club, Republican National Committee Chair Michael Steele criticized Obama and congressional leaders for planning to “start building a colossal, closed health care system where Washington decides,” the AP/Atlanta Journal-Constitution reports. He added, “Republicans want and support an open health care system where patients and doctors make the decisions” (Espo, AP/Atlanta Journal-Constitution, 7/20).
  • The RNC on Thursday launched a Web site called to rally grassroots opposition to Democrats’ health reform plans, Politico reports (Frates, Politico, 7/16).
  • The Senate HELP Committee health overhaul bill “has turned the basic goals of reform upside down” because it “upends the current employer-sponsored insurance system, ends patients’ choices, and puts a bureaucrat between you and your doctor,” HELP Committee member Judd Gregg (R-N.H.) writes in a Washington Times opinion piece. He adds that the bill “would allow continuation of flawed policies that incentivize quantity over quality”  (Gregg, Washington Times, 7/16).

Public Outreach

  • Today, Organizing for America will begin airing a series of 30-second advertisements to gather public support for health care reform, the AP/USA Today reports. OFA is a unit of the Democratic National Committee built off of Obama‘s network of supporters from his presidential campaign. The ads — featuring U.S. residents who describe the hurdles they face with the existing health care system and call for changes to the system — will air in Washington, D.C., and on nationwide carriers. A version of the ads also will air over the next two weeks on local stations in eight states — Arkansas, Florida, Indiana, Louisiana, Maine, Nebraska, North Dakota and Ohio — to encourage lawmakers to support health reform efforts (AP/USA Today, 7/15).
  • The grassroots organizations Democracy for America and Progressive Change Campaign Committee today will begin airing ads in Montana charging that Baucus is siding with special interests rather than voters who want a public health insurance plan as part of health reform legislation, Politico reports. An online membership poll by the organizations found that, out of eight Democratic senators, members said Baucus needed to be pressured the most on adopting a public plan option (Budoff Brown, Politico, 7/21).
  • On Monday, the health insurance industry rolled out a seven-figure national cable television ad campaign, calling for “affordable bipartisan health reform that can cover everyone” but also reminding lawmakers that the industry can “weigh in at any time, with messages pro or con,” Politico reports (Frates/Budoff Brown, Politico, 7/20).
  • In addition, the DNC has begun running cable TV ads to target senators who are wavering in their support of the party’s reform legislation (Eggen/Bacon, Washington Post, 7/18).
  • The RNC has launched an advertising campaign aimed at raising voters’ opposition to health care reform bills and proposals by the White House and congressional Democrats, CongressDaily reports. The RNC ad is airing in Arkansas, Nevada and North Dakota, and opposes the creation of a public insurance plan option.
  • Last week, Americans for Prosperity Foundation and Patients United Now launched a $3 million ad buy asserting that reform efforts could create a health care system designed like the government-administered Canadian system (Edney, CongressDaily, 7/20).
  • Meanwhile, the U.S. Chamber of Commerce this week plans to launch a multimedia ad campaign that targets Democrats’ proposals for the public plan option and the surtax proposed in the House reform bill for high-income residents. The television and print ads are set to be distributed in the Washington, D.C., area and the six states — including Arkansas, Louisiana, Maine and Nebraska — of several influential lawmakers in the reform debate. COC Executive Vice President Bruce Josten declined to specify the group’s exact budget on the campaign, but he said the group will spend “a couple million” dollars on the initial ad roll-out (Adamy, Wall Street Journal, 7/20).
  • In a Newsweek cover story, Sen. Edward Kennedy (D-Mass.) writes about the “cause of his life” — health care reform. Kennedy writes that the “conditions now are better than ever” for health reform. He notes several “essential” elements to any reform plan, including covering the uninsured; implementing an individual mandate and providing subsidies to help individuals buy coverage; reducing health spending; rewarding doctors for quality and outcomes, instead of volume; ensuring people can keep the coverage they currently have; and preventing disease (Kennedy, Newsweek, 7/27).
  • As President Obama has focused on health care in the last few months, first lady Michelle Obama has had an increased role in promoting health care policy, the New York Times reports. Jocelyn Frye, the first lady’s policy director, said Michelle Obama wanted to “draw the connection between this massive conversation that’s happening about health reform and what’s really happening to people on the ground.” The first lady, however, is not seeking to make public policy, her aides say (Swarns, New York Times, 7/19).
  • Harry and Louise — the fictional television ad couple who were the face of opposition to the Clinton administration‘s health care reform effort in the early 1990s — will star in a new $4 million advertising campaign aimed at supporting current reform efforts, CQ Politics reports (Norman, CQ Politics, 7/16). The new commercial began airing last weekend and continues over the next three weeks on national cable and news network shows.  Families USA and the Pharmaceutical Research and Manufacturers of America are jointly funding the ad (Singer, New York Times, 7/17).
  • On Thursday, the actors playing Harry and Louise joined Senate Democrats at a rally on Capitol Hill to celebrate the passage of the Senate HELP Committee‘s reform bill (CongressDaily, 7/16). NPR’s “All Things Considered” on Thursday reported on the Capitol Hill rally (“All Things Considered,” NPR, 7/16).


  • The American College of Surgeons last week joined the American Medical Association in endorsing the House’s reform bill, The Hill reports. According to The Hill, ACS’ support is “strongly tied” to the House provision that would alter the way physicians are reimbursed under Medicare (Young, The Hill, 7/17).
  • A coalition of state medical associations and specialty physicians’ organizations has said AMA has not taken an aggressive enough stance in opposing a public plan option in Democrats’ health care reform proposals and will start its own lobbying campaign against the proposal, CongressDaily reports. The coalition includes 17 state medical associations and three specialty physicians’ groups. In a draft letter, the coalition also said it is opposed to government-funded comparative effectiveness research to determine which medical procedures should be eligible for coverage (Dann, CongressDaily, 7/16).
  • Last week, Obama announced the support of the American Nurses Association for health care reform legislation, The Hill reports. Representatives from the group joined Obama during his Rose Garden press conference July 15 (Youngman, The Hill, 7/15).
  • On Monday, the Mayo Clinic said that U.S. residents would be “losers” under the House‘s health care proposal, the Washington Times reports. According to Mayo Clinic officials, although there are some positive elements of the bill, “the proposed legislation misses the opportunity to help create higher quality, more affordable health care for patients.” They continued, “In fact, it will do the opposite” because the proposals are not patient-focused or results-oriented.” White House officials did not comment on the Mayo Clinic’s statements (Bellantoni/Haberkorn, Washington Times, 7/21).


  • Several associations and health care industry members involved in the debate on health reform reported to Congress a marked increase in lobbying spending during the first six months of 2009, Roll Call reports (Palmer/Ackley, Roll Call, 7/20). Twenty-two health care organizations and companies reported spending at least $1 million each on lobbying during the second quarter of 2009, according to reports filed by 11 p.m. Monday (Fram, AP/Boston Globe, 7/21). According to the New York Times, health industry lobbying spending rose by about 10%, to $126 million (Kirkpatrick/Nixon, New York Times, 7/21).
  • Last week, 42 health-related companies and organizations sent a letter to congressional leaders calling for a centrist and bipartisan health care overhaul and said progress should not be delayed because of debate over a public plan option, CQ HealthBeat reports. The group — known as the Healthcare Leadership Council — wrote that they support an individual mandate, a provision that would bar health insurers from denying coverage based on pre-existing health conditions and attempts to coordinate care and investments in wellness (Norman, CQ HealthBeat, 7/15).
  • More than 1,000 members of four health insurance associations are lobbying lawmakers to exclude a public plan option from health reform legislation, CQ HealthBeat reports. According to lobbyists, the four groups — the Association of Health Insurance Advisors, the National Association of Insurance and Financial Advisors, the Council of Insurance Agents and Brokers of America, and the National Association of Health Underwriters — do not always agree on policy, but are mobilizing to fight a public option (Norman, CQ HealthBeat, 7/15).
  • A group including AARP, the AFL-CIO, Consumers Union, the Generic Pharmaceutical Association, the Pharmaceutical Care Management Association and the Service Employees International Union said that Waxman should drop the issue of expanding access to generic biologic drugs entirely if the House health reform legislation includes a provision granting 12 years of market exclusivity to brand-name drugmakers, Roll Call reports. The Senate HELP Committee last week approved a bill allowing 12 years of market exclusivity (Ackley, Roll Call, 7/16).
  • A coalition of medical imaging equipment manufacturers and physicians is asking lawmakers to drop a proposal in some versions of health reform legislation that would reduce Medicare payments to physicians who offer MRIs, CT scans and other imaging tests in their offices, USA Today reports. Proponents of the proposal say that the scans are overused, though opponents say the proposal could make scans unaffordable for some patients (Fritze, USA Today, 7/17).
  • Baucus is the leading recipient of Senate campaign contributions from hospitals, insurers and other medical interest groups that want to help shape health reform legislation currently being written in the Senate Finance Committee, the Washington Post reports. Health-related companies and their employees gave Baucus political committees almost $1.5 million in 2007 and 2008, when he began working on reform legislation (Eggen, Washington Post, 7/21).

What It’s Going To Cost

  • Health reform bills being considered in the House and Senate include three “big-ticket items” that comprise the bulk of the bills’ $1 trillion price tag: subsidies to help low- and middle-income U.S. residents purchase coverage through health insurance exchanges; a Medicaid expansion; and incentives to encourage small businesses to offer health care to workers, USA Today reports. The biggest single cost in the health reform bills are subsidies, which would be provided on a sliding scale based on income (Page, USA Today, 7/14).


  • U.S. residents are split over several issues related to health care reform, according to a McClatchy-Ipsos poll released on Wednesday, McClatchy/Sacramento Bee reports. The poll found that 46% of respondents said the primary goal for health care legislation should be to expand coverage while 44% said it should be to control costs.  In addition, 40% of respondents said they thought a government-run public plan option would lower the quality of their care, while 21% said it would improve the quality and 36% said it would not change the quality of care (Thomma, McClatchy/Sacramento Bee, 7/16).

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