Metro Detroit Association of Health Underwriters

March 19, 2010
 
Process, Policy and Pandemonium in Final Health Push
 
This week the White House and Democratic congressional leaders started the final procedural processes in their drive to enact into law revised national health reform based largely on the Senate-passed Patient Protection and Affordable Care Act (HR 3590). Yesterday they released a new-and-improved set of side-car reconciliation “fixes” to the Senate bill which they hope can secure enough Democratic votes for passage (see story below).
An expected vote this Sunday is going down to the wire, and is so close that President Obama now has further postponed his overseas trip to Indonesia and Australia until June (a trip he had already delayed by several days).
The now famous “Slaughter Solution” (named after House Rules Committee Chairwoman Democrat Louise Slaughter of NY) is being pursued. In an awkwardly contorted process, the House Democrats are looking to use a “deem-and-pass” tactic allowing Democrats who face difficult re-election races this fall to avoid having to ever vote for the reform bill initially passed by the Senate, which contains problematic tax and abortion provisions, as well as state-specific sweeteners that were negotiated behind closed doors in order to win enough votes for passage. The vote would be on the “deemed” Senate bill combined with a reconciliation bill of fixes (see below).
Republicans used the deeming procedure when they were in the majority, but never on a bill of this magnitude, and they are hammering Democrats on with charges of political cowardice and not being forthright on both policy and process. The GOP notes one reason for significant public opposition to the bill is the means used to pass it. The Senate buyouts, the naked arm-twisting, the procedural manipulations are all disliked on their own merits and further convince independent voters that the underlying bill itself must not be very good to require such efforts.
Possible legal challenges to the “deem and pass” maneuver are already being discussed.
Meanwhile, yesterday more than 130 economists signed a letter to the White House explaining how the Democrats’ health care legislation would be a huge drain on job creation. The letter was signed by more than three times as many economists as a separate letter cited by the White House last week in support of President Obama’s “comprehensive health care bill.”

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Democrats Release Reconciliation Fix Revised Senate Bill
 
Yesterday, Democratic leaders in Congress released their revised Senate health bill / side-car reconciliation “fix” package, which the nonpartisan Congressional Budget Office (CBO) preliminarily estimates will cost $940 billion and reduce the deficit by $138 billion in its first 10 years. The reconciliation package tracks closely to Obama’s proposed changes to the Senate bill, a reflection of the negotiations between the White House and House and Senate Democratic leaders.
The Joint Committee on Taxation’s analysis of the revenue provisions can be accessed here. 
Republicans and other critics slammed the new numbers, claiming Democrats are engaging in more of the same back-loading of costs, hiding costs and double counting among Social Security and Medicare accounts, as well as through the creation of the CLASS Act’s new national long term care program. They also note the CBO score does not include the $300+ bill Medicare Part B “Doctor Fix” or more than $100 billion in discretionary spending it is estimated will be needed for start-up costs of various programs and initiatives.
Compared to the original Senate-passed bill, even though the cost estimate to the federal government has increased by approximately $65 billion, the coverage estimates are nearly the same. The proposal would cover one million more people for a total coverage increase of 32 million, bringing the total insured estimate to 95 percent (excluding unauthorized immigrants). Half the newly insured would be covered by Medicaid and CHIP, and 24 million people would enroll in exchange health plans. A net total of 9 million people would no longer be covered by their employer (~4 million) or the individual market (~5 million).
Of particular importance to NAHU and private insurers, the reconciliation bill does not include the President's problematic proposal to give HHS direct rate approval authority over insurers. Therefore, the existing Senate-passed bill language, which includes many new federal rules that could impact premium increases (e.g., requiring public reporting on rate increases by insurers and federal grants for state rate review), remains unchanged.
NAHU has updated its comparison chart of the major health reform bills, and also a comparison chart of the Senate-passed bill, to reflect this latest proposal.
The major proposed side car reconciliation bill changes to Senate legislation largely track the President’s proposal released late February and include the following:
• Individual Mandate: Compared to the Senate-passed bill, the proposal somewhat strengthens the penalties for those who do not purchase health insurance coverage. However, the bill maintains the exemption for those who would face premiums of more than 8 percent of their income, which would exempt millions of people.
• Employer Mandate: The proposal increases penalties for large employers that do not offer health coverage to $2,000 per full time employee (FTE) versus $750 per FTE in the Senate bill.
• Grandfathered Plan Requirements: The Senate bill generally "grandfathered" plans in effect on date of enactment from various new benefit and consumer protection rules. The reconciliation bill makes several targeted changes, including subjecting grandfathered plans to new requirements concerning lifetime and annual dollar limits, rescissions, dependent coverage to age 26, and limits on waiting periods before employees are eligible for coverage under employer-sponsored plans.
• Subsidies: The proposal slightly increases premium and cost-sharing subsidies for those who purchase coverage through the exchange. However, beginning in 2019, a failsafe mechanism is applied that reduces overall premium subsidies if the aggregate amount exceeds 0.504 percent of GDP.
• Health Insurance Industry Tax: The proposal delays the effective date of the fee imposed on health insurance providers by three years (until 2014). The proposal would also create limited exceptions for plans that serve a critical purpose, including plans serving a high percentage of seniors and disabled individuals. For tax-exempt service providers, only 50% of net premiums written would be taken into account. The fee would equal $8 billion for 2014, $11.3 billion for 2015 and 2016, $13.9 billion for 2017 and $14.3 billion for 2018. For years after 2018, the fee would be the amount applicable for the preceding year, increased by the rate of premium growth as calculated for the premium tax credits included in the Senate bill.  
• Tax on "Cadillac" Health Plans: The proposal changes the effective date of the Senate's tax on "Cadillac" plans from 2013 to 2018. It also raises the threshold for premiums that are exempt from the assessment from $8,500 for individual coverage to $10,200 and from $23,000 for families to $27,500. The bill also changes the formula for indexing the thresholds and takes into account age, gender and certain other factors.
• Modification of New Medicare Payroll Tax Increase: The proposal broadens the Medicare Hospital Insurance Tax Base for High-Income Taxpayers - additional surtax of 0.9% on earned income in excess of $200,000/$250,000 (unindexed), and 3.8% surtax on investment income for taxpayers with AGI in excess of $200,000/$250,000 (unindexed).

 
• Medicare Part D: The proposal fills the Part D "donut hole" by including a government-issued $250 rebate to Medicare beneficiaries who hit the donut hole in 2010 and closes the donut hole completely by phasing down the overall coinsurance to 25 percent by 2020.
• Medicare Advantage (MA): The proposal cuts MA by a total of $202 billion (about $130 billion in direct MA cuts and $70 billion due to other cuts to traditional Medicare) by freezing benchmarks for one year in 2011 and then reducing benchmarks to different percentages of fee-for-service Medicare spending, with bonuses for quality and enrollee satisfaction. It increases the ability of HHS to reduce MA plan payments because of plan coding practices. In addition, it requires MA plans to maintain at least an 85 percent medical loss ratio (MLR) or face termination from the program.
• Medicaid: The proposal includes increased reimbursements for states to cover the expansion population (up to 133 percent of poverty). It also strikes the controversial "Nebraska deal" that would have required CMS to pay that state the full cost of the expansion population in perpetuity. For Puerto Rico, it raises the Medicaid funding cap by 35 percent rather than the Senate bill's 30 percent.
• Fraud and Abuse: The proposal includes several new provisions to strengthen Medicare and Medicaid anti-fraud activities. 
• Implementation Funding: The proposal provides $1 billion to HHS for implementing the Senate-passed bill and reconciliation proposal. 

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Caveats on CBO Score
 
To achieve huge projected deficit reductions in its second decade, Democrats’ final health care bill assumes two major future policy changes that may never come to pass.
According to the CBO, in 2019 the bill proposes to suddenly slow the growth of subsidies intended to help people purchase insurance plans through new state-based marketplaces called exchanges. In the same year, it would speed up the growth of an excise tax on high-cost insurance plans.
The subsidies would average about $5,200 per person in their first year, 2015. They would grow by $100 in 2016, $200 in 2017 and $300 in 2018 – but the growth slows to $200, on average, in 2019.
Meanwhile, the premium costs that would trigger the excise tax would grow by the rate of inflation plus one percentage point in 2019, the first year after it takes effect. But in 2020, according to the CBO, the threshold to trigger the tax would grow at general inflation, as opposed to the Senate bill, which retained the extra percentage point. That difference means a very large segment of the middle class would get hit with the tax as the years passed.
The CBO says that the two changes are a big reason the final health bill would achieve huge reductions in the deficit in its second decade —between one-quarter and one-half of a percent of gross domestic product, which Democrats say amounts to $1.2 trillion.

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Process Forward
 
The House Rules Committee is expected to meet Saturday to consider the rule for floor debate on the reconciliation package and the Senate-passed bill. While a final decision has not been made, the most likely strategy is for there to be a "closed" rule for House floor consideration so that if the reconciliation bill is passed, the Senate bill will be "deemed" to be passed too. This means that when members vote for or against the reconciliation package, they also in essence will be voting for or against the separate Senate-passed bill in a single vote.  
If the House passes the reconciliation bill, the Senate-passed bill will be sent immediately to the President to be signed into law. The reconciliation package will then go to the Senate, where it will need to pass without any changes to avoid having to take another vote in the House.
Senate Republicans are mining the chamber’s arcane parliamentary rules for possible objections to strike elements both broad and narrow from the bill, weakening the measure and ultimately defeating it. Their goal is to force changes that leave Senate Majority Leader Harry Reid (D-NV) without 51 votes to pass it, or at the very least, drive it back to the House for a second vote that drags out the process and saps Democratic resolve.

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The Whip Count
 
Though “whipping” votes and keeping tabs on who will vote which way is a common practice in Washington legislative battles, a veritable cottage industry has exploded across the country in assessing whether the House can muster the votes to gain passage of the current health reform bills. NAHU, along with our coalition partners, has been deeply involved in this process, and we estimate that the Democratic majority is still a good handful short of its needed 216 votes to pass the current conglomeration of health reform. With all 178 House Republicans expected to vote no (including Rep. Joseph Cao, who has stated he’ll reverse from his sole GOP “Yes” vote on the House bill in November), 38 Democratic “No” votes would be needed to defeat the bill.
The biggest single bloc of undecided Democrats remains those with reservations about the Senate’s abortion restrictions, a group led by Michigan Rep. Bart Stupak.
Almost hourly, members are announcing their stated vote positions, coming out of the “undecided” woodwork column. As of this writing, we estimate that the 178 “No” GOP votes are bolstered by 28 Democratic “No” votes and seven “Lean No”, which equates to 213 total votes against. Thus only three more Democratic members in the “Undecided” or other position column would be needed to defeat the measure.
However, things change by the minute, and the President and Democratic leadership are lobbying furiously to twist enough “Yea” votes for passage. Your phone calls and e-mails could not be more important than in the next 24 hours to all House offices! In particular, please see this list of those we believe still need extra constituent outreach and prodding.
Grassroots matters! NAHU has among the most dedicated and productive grassroots mobilization from its members as any group in the country. Your participation in our Operation Shouts and our recent phone call campaign to House members (as well as engagement by family, friends and clients) can make the difference here!

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Clarification: Is a Part of the Bill "Unrepealable" by Future Congresses?
 
NAHU has received a number of questions in recent days about whether portions of the Senate bill are somehow “unrepealable” by future Congresses. The language in question is Sec. 3403 of the Senate bill creating the Independent Medicare Advisory Board. 
 
Again for the benefit of our members, in the Senate-passed bill there was language in Sec. 3403 (d)(3)(C) reading "Limitations on Changes to this Subsection," "….it shall not be in order in the Senate or the House of Representatives to consider any bill, resolution, amendment or conference report that would repeal or otherwise change this subsection.” It also followed with a subsection (D) "Waiver― “This paragraph may be waived or suspended in the Senate only by the affirmative vote of three-fifths of the members, duly chosen and sworn.”
 
This language would not change the Senate's Standing Rules but rather make an exception to them. It would require a supermajority to make any changes to this section of the bill. Apparently, language similar to that used here to except certain provisions from the Senate's Standing Rules has been used dozens of times in the past.
Sec. 3403 (d)(5) of the Senate bill also provides that Congress enacts this provision “with full recognition of the constitutional right of either House to change the rules (so far as they relate to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that House.”
Please click here for more information.

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March 5, 2010
 
Moving Forward, Like It or Not
 
Less than a week after the bipartisan health summit at Blair House during which President Obama asked both Republicans and Democrats to spend the next four to six weeks working cooperatively on health reform legislation, President Obama switched strategies in a nationally televised address,calling on the House and Senate to have an up or down vote on the comprehensive health reform bills already on the table within the next few weeks, stating, “I do not know how this plays politically, but I know it's right.”
While President Obama never used the words “budget reconciliation” in his remarks, he and the members of his administration, as well as Democratic congressional leaders, appear to have endorsed the controversial budget reconciliation strategy to pass the legislation. However, in an interesting twist, they have abandoned they idea of passing a reconciliation bill first that includes all of the negotiated changes and deals to things like the Cadillac tax, as well as the bipartisan ideas the president keeps touting in his summary plan for reform. Instead, Democratic leaders appear to have agreed to attempt to have the House pass the original Senate bill verbatim first, then move forward with fixing what they can through reconciliation. 
In some ways, this makes the reconciliation process a little bit easier for them, as there was much concern that going forward under the other method was both procedurally impossible and illegal, since you can’t amend a law before its actually signed into law. However, politically, the process is still fraught with peril (see reconciliation article below). President Obama has also called for an extremely aggressive timeline for this course of action, hoping to have the whole matter wrapped up before Congress leaves for Easter break in three weeks, with the House voting on the original Senate-passed legislation by March 18 before the president leaves for a trip to Asia. He’s also begun aggressively courting House Democrats for their votes. Speaker Pelosi and House Majority Leader Steny Hoyer both stated yesterday that the Obama time frame may be unrealistic, and that they will not necessarily rush a vote before Easter.
NAHU opposes both the original Senate-passed bill as well as the use of the budget reconciliation process to pass comprehensive health care reform legislation. While we strongly believe that our country could benefit from some affordable and responsible reforms to our private-market delivery system, legislation of this magnitude should not be developed and passed by a single political party. 
Our members attending NAHU’s annual Capitol Conference in Washington will be meeting with their congressional representatives in person to spread this message, and we have been working in conjunction with coalition partners like business groups, other agent trade associations and the health insurance industry to promote sensible and bipartisan reform. We’re particularly targeting members of the House of Representatives who either voted “NO” on the original House legislation or those who voted “YES” but have indicated that they may not be able to support the Senate-passed legislation as it currently stands. Here’s a letter on this issue you can send today to your member of the House of Representatives and here is another one that you can encourage your clients, family and friends to send.

February 19, 2010
 
Getting Ready for the Bipartisan Health Summit
 
The health policy community in Washington, DC, is busy preparing for next Wednesday’s bipartisan health summit at the White House. The six-hour summit, to be moderated by President Obama, will be nationally televised on C-SPAN. According to news reports from yesterday, the Obama administration will release its own version of a comprehensive health reform bill to be discussed at the summit and post it online on Monday. It was previously reported that the congressional Democrats might arrive at the summit with a merged version of the House and Senate bills that they could agree on for passage, but it has become clear in recent days that no agreement between the two chambers has been reached. In addition, the Obama administration has let it be known that the bill they will be presenting has not been agreed to by either House or Senate leaders, but that they have instead independently picked what they considered to be the best provisions from each of the two bills currently on the table. It does not appear that the Obama bill will have been scored by the Congressional Budget Office. 
The Republican leadership has been asked to also present its own comprehensive alternative bill on the 25th, and also post it online by this coming Monday. It’s still unclear whether or not they will do so, as there are several different versions of GOP comprehensive health bills that have been proposed in the House and the Senate. These include the Empowering Patients First Act and the Patients' Choice Act, among others. 
Attendees at the summit will include the president and vice president, HHS Secretary Kathleen Sebelius, head of the White House office on Health Reform Nancy Anne DeParle, as well as representatives from the Congressional Budget Office, the Office of Management and Budget and the Joint Committee on Taxation. From Congress, the most senior House/Senate respective party leadership, as well as the chairmen and ranking members of the committees that oversee health insurance reform legislation in both chambers have been invited. In addition, each party’s congressional leadership will be allowed to ask four additional members of Congress to attend. Who these additional attendees will be is being kept very close to the vest by both parties, as a surprise element.
From the GOP side, possibilities include: Senator Orrin Hatch (UT), who serves on both the HELP and Finance Committees; Senator Olympia Snowe (ME) of the Finance Committee; Senator Tom Coburn (OK), who serves on the HELP Committee and is an M.D.; Representative Tom Price (GA), who is an M.D, and, due to his role as chair of the GOP Study Committee, was the principal author of the GOP alternative health reform bill offered in the House; Representative Paul Ryan (WI) of the Ways & Means Committee; and Representative Michael Burgess (TX), who serves on Energy & Commerce and is also an M.D., among others. 
Democrats angling for an invitation include: Senators Jeff Bingaman (NM) of the HELP and Finance Committees; Kent Conrad (ND), who chairs the Budget Committee and serves on Finance; Jay Rockefeller (WV), who chairs the Finance subcommittee on Health; Barbara Mikulski (MD) of the HELP Committee; Chris Dodd (CT); and Charles Schumer (NY), who serves in both the Senate leadership and the Finance Committee, among others. On the House side, contenders for inclusion may be Representatives Pete Stark (CA), Rob Andrews and Frank Pallone, both of New Jersey, who serve as the ranking members of the various health subcommittees in the House, as well as former Energy & Commerce Chair John Dingell (MI), and Blue Dogs with a vested interest in health reform like Bart Stupak (MI) and Mike Ross (AR).  
As the summit date approaches, there has been much speculation as to who it will actually benefit, whether or not any bipartisan progress can be made, or if the whole event is simply a political stunt. NAHU has consistently called for a true bipartisan effort to pass substantive health reform, and as Congress and the Obama administration prepare for the summit, we continue to advance NAHU’s ideas for affordable, responsible health reform with lawmakers on both sides of the aisle. If you have any questions about our activities, please do not hesitate to contact any member of NAHU’s government relations staff.

 

HHS Secretary Criticizes Individual Market Premium Increases
 
HHS Secretary Kathleen Sebelius held a press conference yesterday regarding the department’s report criticizing recent individual market rate increases announced by WellPoint in California, Blue Cross Blue Shield of Michigan, Anthem Blue Cross and Blue Shield in Connecticut, various insurers in Rhode Island and Regence Blue Cross Blue Shield in Oregon. The Obama administration has used the rate increases, which were approved by each state’s insurance regulators, as examples of why national health reform is needed and have also used the rate increases as a means of criticizing the profit margins of our nation’s largest health insurance companies.
However, the health insurance industry and others have fought back, explaining that the rate increases are actually a reflection of soaring medical care costs, adverse selection in the individual market risk pools in these states, and changes to state laws regulations. Instead of highlighting the need for health reform that includes guaranteed issue of individual coverage, it shows what will happen if national reforms that limit what insurers can charge, preclude health status rating and do not adequately incent all individuals to buy and maintain healthy coverage to ensure adequate risk-spreading, are enacted. In addition, insurers have used this incident as an opportunity to point out that, according to national Health Expenditure Accounts, health plan administrative costs have fallen over the past two years from 12.8% in 2006 to 12.5% in 2007 to 11.7% in 2008 (See Table 12) and that Fortune 500 puts the health plan industry profits at 2.2%, 35th on its list of profits by industry sector—well below other sectors of the health care industry. 
The California increase in particular is almost completely attributable to the state’s COBRA conversion laws, which prohibit individual insurers from dropping those whose federal COBRA eligibility has expired, does not allow these individuals entry in the state’s high-risk pool and caps the rates that can be charged for conversion policies. The recent economic downturn has led to an expansion of the conversion market, as well as many younger, healthier purchasers of individual coverage dropping their policies. The result was $58 million in losses for WellPoint during the past year on this block of business. That is why California Insurance Commissioner Steve Poizner approved the rate increase in November 2009, and why past president of the National Association of Insurance Commissioners (NAIC) and current chair of the NAIC’s Health Insurance and Managed Care Committee, Kansas Insurance Commissioner Sandy Praeger, said she agrees with others that Anthem Blue Cross is operating within the law. "I thought the explanation made perfect sense," says Praeger. "In this job climate, if people are young and healthy, they're just not going to buy insurance. And the people who do keep it are the ones who need it."

 

Senators Attempt to Revive Public Option
 
As Washington prepares for the upcoming health care summit on Thursday, a group of progressive senators have renewed their call for the inclusion of a government-run public plan option in health reform legislation. So far, 18 Senate Democrats have signed onto a letter to Senate Majority Leader Harry Reid (D-NV), calling on him to use the budget reconciliation process to pass a comprehensive health reform bill that includes a government-run public plan. The letter was initially authored by Senators Michael Bennet (D-CO), Kirsten Gillibrand (D-NY), Jeff Merkley (D-OR) and Sherrod Brown (D-OH). In addition, HHS Secretary Kathleen Sebelius, who earlier last year indicated that a public option was “not an essential” part of health reform, told MSNBC yesterday that if the Senate leadership included a government-run public plan option in a bill, the Obama administration would support it. 
While inclusion of a public option plan in a bill offered in the Senate still remains highly unlikely, as there have never been the votes to support a public-option’s passage in that chamber, all of the discussion and its timing is an interesting part of the current health policy debate. It reflects the continued disunity within the Senate Democratic caucus leading up to the summit, the strong desire of some to pursue a different course without compromise and attempt to use the budget reconciliation method to pass an extremely progressive version of health reform—a move that polls continue to show is opposed by the majority of Americans. 

 
New Study Shows the Cadillac Plan Excise Tax Would Overwhelmingly Impact Non-Union Workers
 
Two health economists, Ken Jacobs and William Dow, from the University of California at Berkeley Labor Center released an interesting study this week on the impact of the excise tax on so-called “Cadillac” plans that is proposed as a primary financing mechanism of health reform in the Senate-passed comprehensive legislation. The study, which examines both the Senate-passed bill and the compromise deal struck by Senate leaders, the White House and key unions in January (but is not actually reflected in any current legislation), found that 80% of the individuals impacted by the tax by 2019 will be non-union employees and that number will rise to 83% by 2024. The study also finds that, by 2024, even with the proposed union carve-out, a quarter of Americans in employer-sponsored plans would be impacted by the 40% excise tax on their coverage. The study seems to confirm many of NAHU’s long-standing concerns with the proposed excise  tax—that it is not just a union issue, that many plans that would be deemed “Cadillac” coverage do not actually contain excessive benefits but are simply the result of high medical care costs in an area and an older workforce, that the tax would not curb rising medical care costs, and that with each passing year more and more Americans in standard employer-provided plans will be impacted by the tax as it is not properly indexed for medical inflation. 
Also this week, the Employee Benefits Research Institute released a very good resource on current and future prospects of the employer system, Issue Brief No. 339: Employers, Workers and the Future of Employment-Based Health Benefits. This is a recap of a health care policy forum with finance, benefit, business and labor practitioners sponsored by EBRI on December 10, 2009. The forum took place as debate over health care reform legislation was occurring in Congress, including proposals to tax high-cost health plans.

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New Insurance and Financial Regulatory Reform Bill on Its Way
 
Senate Banking Chairman Chris Dodd (D-CT) said this week he hopes to unveil a revised insurance and financial regulatory overhaul plan next week as he moves toward a committee markup the week of March 1.

Three months after his sweeping initial proposal was widely criticized by Republicans, Dodd has been negotiating with committee Democrats and Tennessee Republican Bob Corker in an effort to craft a bipartisan deal that can win 60 votes on the Senate floor.

The details of Dodd’s plan remain unclear, including how he will structure an entity to police consumer financial transactions. The House of Representatives passed its version of financial regulatory reform (H.R. 4173) in December.

The Congressional Research Service has published this very good report on this pending legislation and issues in the 111th Congress. 

2/16/10 NAHU News

Snow Slows Health Care Action, But Doesn't Halt It Completely
 
Washington, DC, is famous for many things, including its complete inability to handle any weather-related emergency gracefully. This week’s two record-breaking blizzards were no exception, resulting in the federal government closing its doors for business four out of the past five days. As a result, little substantive legislative activity took place this week, but that doesn’t mean that there wasn’t any action at all on health care reform.
During a nationally televised interview with Katie Couric prior to the Super Bowl on Sunday, President Obama called for a bipartisan televised health care summit to be held at Blair House on February 25. "I want to consult closely with our Republican colleagues," Obama told Couric. "What I want to do is to ask them to put their ideas on the table... I want to come back [after the President’s Day recess] and have a large meeting, Republicans and Democrats, to go through, systematically, all the best ideas that are out there and move it forward." Obama followed up on this call for bipartisan cooperation with a meeting of Republican and Democratic congressional leaders at the White House on Tuesday. After the meeting, he told reporters about the GOP, “I’m willing to move off of some of the preferences of my party in order to meet them halfway, but there’s got to be some give from their side as well.” 
But there was decidedly non-bipartisan action going on as the snow piled up outside the Capitol too. Democratic Senate staffers continued to ponder scenarios to move health care reform legislation acceptable to Democrats in both chambers forward using the budget reconcilliation process. However, procedural hurdles (as reported in last week’s Washington Update) still daunt them.
In addition, in an interview with Roll Call on Tuesday, House Speaker Nancy Pelosi (D-CA) continued to urge the use of reconcilliation to pass health reform in the Senate. “It’s up to us to make sure the public knows that this is not extraordinary,” she said. “ And the public knows that a constitutional majority is 51. It would be a reflection on us if we could not convince people that this is not an unusual place to go.”
At an Academy for Health meeting that same day, her top health care aide, Wendell Primus, outlined a way in which he believes the Senate could do so. “The trick in all of this is that the president would have to sign the Senate bill first and then the reconciliation bill would be signed second and the parts of the reconciliation bill that trump the relevant portions of the first signed bill. You would really have to use the fact that a later enacted bill takes precedent over a previously enacted bill to achieve the right outcome.”
It’s very unclear whether or not Primus’ strategy would be deemed legal, as rules seem to not allow Congress to pass changes to a bill that is not yet law. And the Senate parliamentarian (who would make this determination) has yet to weigh in on Primus’ theory. 

 
Health Summit and the GOP: Should They Stay or Should They Go?
 
Since President Obama issued his call for a bipartisan summit on health care reform this past Sunday, political commentators have been abuzz discussing whether or not the summit will be, or even can be, a substantive policy discussion the will move health reform forward. Many think the administration and GOP are just setting up for another clash. While so far congressional leaders have all appeared committed to at least attending the summit (though no formal invitations have actually been issued), there have been some commentators who have wondered whether or not the GOP should even attend at all. In addition, the news has been filled with opinion pieces as to how both sides should behave at the meeting, and what ideas each should present. 
In preparation for the summit, the GOP leadership in the House sent a letter to the President’s Chief of Staff, Rahm Emanuel, on Monday. In the letter, House Minority Leader John Boehner (R-OH) and House Minority Whip Eric Cantor (R-VA) pose a series of questions about the summit, including whether or not President Obama will abandon the campaign to use the budget reconcilliation process to advance health care reform through the Senate, if congressional Democrats who have opposed the health care reform bill in the House will be included in the discussion, if state officials with concerns about the bills will be included, if outside experts will be included in the discussion and if those experts will include the CBO and CMS actuaries who have indicated the proposals on the table will not reduce health care costs, and if the GOP will be allowed to invite their own experts to the meeting. 
Even before the summit was announced, GOP congressional leaders were making a unified call for abandoning the two bills that are currently on the table and starting over in a bipartisan way. At first, President Obama seemed committed to using the two bills on the table as the basis for all negotiations, but as this week has progressed he has softened his stance a bit. After Tuesday’s meeting with congressional leaders, he said he was “open to any ideas” relative to cost-containment, eliminating the use of preexisting condition clauses by insurers and marking health insurance more affordable. However, at the same press conference, he also warned Republicans not to take his openness for granted. It has also been widely reported that Democratic congressional leaders hope to go into the February 25 meeting with an agreement and plan for their two bills, something that has eluded their caucus for months.
NAHU has consistently called for a true bipartisan effort to pass substantive health reform, and as Congress and the Obama administration prepare for the summit, we will continue to advance NAHU’s ideas for affordable, responsible health reform with lawmakers on both sides of the aisle. If you have any questions about our activities, please do not hesitate to contact any member of NAHU’s government relations staff.

2/5/10 NAHU News
 
Still No Clear Direction on Health Reform Moving Forward
 
Last week, congressional Democrats and the Obama administration were publicly hinting that they would announce a clear track for advancing their health care reform bills forward by the end of this week. But as the week comes to a close, they still have failed to outline their specific plans. Here is an overview of some of the different courses of action being pursued by various factions:

Moving Forward On Jobs First
As the days tick by with no significant health care movement and the economy still struggling to create new jobs, moving forward on legislation designed to create more employment opportunities seems to be most likely course going forward. House Democratic leaders met with President Obama yesterday and emerged from the meeting with that as their principal message. House Speaker Nancy Pelosi (D-CA) told reporters after the meeting, “Hopefully, we will have a (jobs) package on the floor next week. That is what our hope is. If not then, when we come back. See, we see it all as jobs – health, education, energy – all as jobs.” The Senate is also poised to take up the jobs legislation next week.

Moving Forward on Reconcilliation
Over the past two weeks, both House and Senate leaders have openly discussed their hope that they will be able to move health care reform forward using the budget reconcilliation process to pass the Senate bill, combined with a “side-car” fix bill to resolve the problems the House sees with the original Senate legislation. Behind the scenes, staff have been feverishly working on ways in which they could accomplish this task. While it is certainly not outside of the realm of possibility it will be tried, increasingly obstacles to this project keep coming to light. They include:

• Who goes first? Since revenue bills must constitutionally originate in the House, there is consensus that the House must pass some bill that can operate under the reconcilliation rules first and then send that bill to the Senate for consideration. The House leadership has repeatedly said that they do not have the votes to pass the Senate health care reform bill first . As a work-around, there is a possibility that the House could pass an education bill that would also receive reconciliation consideration, and then the Senate could try to attach the health care provisions to that bill.

• Can you even amend a bill that is not existing law? Even if the Senate could start working on health care reform via reconciliation using the house-passed education bill as a vehicle, there are serious questions as to whether or not it is even possible to make the necessary changes included in the fix bill because they are not existing law. In order to agree to move forward, House members insist that the side-car fix bill be passed by the Senate first; otherwise they would have no assurances that the changes would ever be made, since the reconciliation process is so uncertain. But can you enact changes to a bill is not even law yet? Reconcilliation has only been ever used to change budgetary provisions already in law and the Congressional Budget Office scoring should all be based on existing law. Changing this process would be unprecedented and would require a ruling from the Senate parliamentarian. He has not yet been willing to offer a public opinion on the matter.

• Would the fix provisions be ruled germane? Reconciliation provisions have to have a direct federal budgetary impact. Any senator can challenge the relevance of any provision and the nonpartisan parliamentarian has to make a determination. You need 60 votes, not 51, to overrule the parliamentarian. Many of the “fix” provisions important to House Democrats, including language on immigration and abortion, could easily be deemed non-germane.  

• Would the “fix bill” even fix it? Under reconciliation rules, the provisions only last for five years. One year has already been exhausted, meaning that if they use reconcilliation, the “fix” provisions will expire in 2014. Then, unless some undetermined work-around was devised, everything would revert back to the original Senate-passed legislation after 2014—a prospect that should be unacceptable to most House Democrats.     

• Do they have enough Democrats to go along? A number of Democratic senators, including Blanche Lincoln (D-AR) and Evan Bayh (D-IN), have publicly stated in recent days they have no stomach for using the reconcilliation process in this manner. Behind-the-scenes reports indicate that there are 10 Democratic senators who are opposed, which leaves Senate Majority Leader Reid short one vote.

• Could they get this through committee? If the reconcilliation process is used, the bills would need to go back to their committees of jurisdiction to be repackaged and also go through the Budget Committee. Even if the committee process is ultimately successful in moving the bills through, it would slow the process down considerably.

• How long do the reconciliation instructions last? Only until the House and Senate pass their new budget resolutions, which typically occurs before the April Easter recess. Otherwise they would have to include new reconciliation rules in their current budget resolutions, which could be subject to filibuster in the Senate. Adding new reconciliation instructions to the FY 2011 budget is certainly a possibility, but if they want to move forward under the current rules, it has to be done quickly. And in addition to the lengthy reconcilliation process itself, Congress also has some other pressing issues on the agenda, including the jobs legislation, federal Medicaid payments to states and the Medicare physician reimbursement fix which expires at the end of February.

• Could the GOP offer unlimited amendments/hold up the measure procedurally? The GOP announced this week that a procedural loophole they see with the reconciliation process would allow them to attach an unlimited number of amendments to the bill. The Senate parliamentarian would have to rule on this and has not offered a public opinion either way. It’s worth noting, however, that attaching unlimited number of amendments was how Senate Republicans got the Majority Leader George Mitchell to pull health reform legislation from the floor in 1993.    

• Would using reconciliation just further anger the American people? Based on the Massachusetts election, everyone agrees there are serious political concerns involved with the idea of using the reconcilliation process to move health reform forward—it would seem to circumvent the wishes of the voters. However, some believe that it would energize the Democratic base and give the Majority a win on their signature issue of the last year. Recent survey data released this week indicates that moving health care reform forward might not help the Democrats too much in 2010 either way. 

Asking the GOP to Reconsider the Bills on the Table
President Obama, speaking at a Democratic National Committee fundraiser this week, stated he wants to meet with all sides (Republicans, Democrats and health care experts) to review the bills on the table “in a methodical way. And then, I think that we've got to go ahead and move forward on a vote.” This strategy could put the GOP in a tough spot, because if they do not cooperate, they could be accused of refusing to act in a bipartisan manner. But since you can’t make significant changes when conferencing two already-passed bills (typically once bills have already been passed by a chamber, in a formal or informal conference process you do not add or delete significant provisions, only choose between the different already-passed provisions), there couldn’t be too much true negotiating done with the GOP in such a meeting either. And the GOP appears to be committed to their strategy of insisting that both bills be scrapped and everything started over in a bipartisan fashion.

Trying to Move the Public Option Forward
The House Progressive Caucus announced this week that they plan to meet with their Senate counterparts next Tuesday to work on moving stand-alone government-run public plan option forward in both Houses. Options they may want to pursue include inserting the public option into the reconciliation fix bill or bringing it up through normal channels and forcing a Senate filibuster. However, there are no guarantees that the leaders of either chamber will go along with this plan, given that there are numerous moderate Democrats opposed in both chambers. In fact, this effort could be viewed as an unwelcome distraction that further inhibits the leadership from moving forward on greater reforms that might have a chance at passage.  

Moving Small Health Care Reform Bills Forward One at a Time
At least in the House, this is a concrete possibility. As detailed in the story below, the House leaders will move forward next week with their first small bill, a measure to repeal the federal antitrust exemption for health and medical malpractice insurers. However, in terms of moving more market reform bills forward beyond the antitrust measure, House leaders publicly indicated this week that idea could be very difficult due to the affordability concerns such bills create when considered as stand-alone pieces of legislation. House Majority Leader Steny Hoyer (D-MD) acknowledged, "The problem with individual component parts, as all of you know, is one of the major pieces of legislation is insurance reforms - pre-existing conditions; lifetime limits; annual limits, so we don't put families into bankruptcy. Those cannot be affected, frankly, without premium increases for people with spreading the risk, that is adding the 30 to 35 million people to the insurance pool, which will therefore reduce the risk."

As things continue to shake out, NAHU is actively monitoring all possibilities and actively lobbying lawmakers on both sides of the aisle on NAHU’s ideas for affordable, responsible health reform. If you have any questions about our activities, please do not hesitate to contact any member of NAHU’s government relations staff.   

2/1/10 NAHU Newswire

Administration issues new mental health coverage rules.

The New York Times (1/30, A14, Pear) reported the Obama Administration "issued new rules...that promise to improve insurance coverage of mental healthcare for more than 140 million people insured through their jobs." Under the rules that go into effect July 1, "employers and group health plans cannot provide less coverage for mental healthcare than for the treatment of physical conditions like cancer and heart disease."
        The AP (1/30) reported that the new rules prohibit "separate annual deductibles for mental health treatment" and higher "copayments for visiting a psychiatrist or social worker." The measure "also prohibits health plans from setting limits on number of visits or hospital days for mental health problems that are different from any such limitations on treatment for medical problems."
        CQ HealthBeat (1/30, Norman, subscription required) reported that HHS Secretary Sebelius said, "The rules we are issuing today will, for the first time, help assure that those diagnosed with these debilitating and sometimes life-threatening disorders will not suffer needless or arbitrary limits on their care. ... I applaud the long-standing and bipartisan effort that made these important new protections possible."
        Modern Healthcare (1/29, Zigmond) reported, "The rule applies to group plans of 50 or more people and divides benefits into the following six categories: inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs."


1/29/10 NAHU Newswire

Health reform timeline seen as open-ended.

The AP (1/29, Werner) reports that "President Barack Obama's healthcare appeal failed to break the congressional gridlock Thursday." Now Democrats face the "grim reality" of a "political nightmare," according to the AP, "getting clobbered for voting last year for ambitious, politically risky bills, yet having nothing to show for it in November." While "congressional leaders...insisted healthcare would get done," other "Democrats saw a problem with no clear solution."
        The New York Times (1/29, A11, Herszenhorn, Pear) reports that "Democratic leaders in Congress voiced resolute optimism on" the passage of healthcare reform, "but legislative leaders conceded that they did not have an immediate strategy for advancing a healthcare measure and described their time frame as open-ended." House Speaker Nancy Pelosi (D-CA) again mentioned the strategy of breaking the legislation into smaller bills, the first part of which "could be the proposal to eliminate the exemption from federal antitrust law that health insurance companies have long enjoyed."
        CNN (1/29) also notes that "one of the bills could include a measure to repeal the antitrust exemption for insurance companies."
        According to AFP (1/29), "Pelosi vowed to proceed with the embattled legislation 'on many fronts' and described a strategy that would see lawmakers approve small pieces of the bill 'on the side' while work proceeds on crafting a sweeping compromise measure."
        Politico (1/29, Brown) reports, however, that while "Democrats in Congress said all the right things Thursday"