The Power of A

Today, beginning at 10 AM, the Senate Finance Committee will vote to pass its version of health care reform.  If the bill passes committee (as it is expected to do) it will be merged by the Senate Majority Leader with the Senate HELP bill for Senate floor consideration.  There are some storylines the media are following leading up to the vote, including:

-  Whether Senator Olympia Snowe (R-ME) will vote for the bill: Senator Snowe is the only Republican on the committee who has indicated she could vote for the health care bill.  Finance Chair Baucus has been working with her to ensure some of her provisions have been included in the legislation, but Senator Snowe still has not indicated whether she will vote for it.  Politico breaks down the impact of her vote either way.

-  Will any Democrats vote against the bill: Senator Rockefeller (D-WV) does not like that the bill does not have a public option.  Senator Wyden (D-OR) wanted the insurance exchange open to more individuals, not just small businesses.  Senator Lincoln (D-AR) has expressed concern over the cost of the legislation.  The loss of more than one of these Senators with no Republican votes would defeat the bill.

-  The AHIP report: Yesterday, America’s Health Insurance Plans (AHIP) released a report stating the Finance Committee bill would end up costing families $4,000 more for insurance by 2019.  You can find the report here.  The White House yesterday accused insurance groups of playing politics with the timing and content of their report.  Today’s vote could show if the new information has an impact on anyone’s vote in committee.

Quick Hits

PBS’s The News Hour holds a conversation with the White House Office of Health Reform’s Nancy DeParle and AHIP’s Karen Ignagni… Senators John Kerry (D-MA) and Lindsay Graham (R-SC) write a New York Times editorial on climate change legislation… The Supreme Court is considering major case that could impact campaign financing for all corporations.

Members of Congress and staffers have the day off in recognition of Yom Kippur, but even with the break they are preparing for a contentious week of health care debating.

Most of the attention this week will be on the Senate Finance Committee, which resumes its markup of the Chairman’s Mark health care language tomorrow.  Last week, the committee took an immense amount of time debating a few amendments, and moved many of the major debates (including financing) to this week.  Among the major amendments debated last week was the Nelson amendment that would require drug makers to provide rebates on drugs they sell to Medicare and Medicaid participants.  The amendment had aimed to close the Medicare “donut hole” but was opposed by the White House and Chairman Baucus as potentially undermining the deal the White House had with the Pharmaceutical Research and Manufacturers of America (PhRMA) to help pay for health care reform.  The amendment was defeated 10-13.

The following are the major issues that the committee will likely discuss over the next week, and may help pass or sink the legislation:

- The Rockefeller-Schumer Public Option Amendment: This is likely to be one of the most controversial amendments debated in the committee. The two Senators have pushed for an amendment that would replace the privately-owned cooperatives concept with a public option contained in the Senate HELP and House bills. It is likely the amendment will be defeated in committee but could be reoffered on the Senate floor.

- The “trigger” amendment: While an immediate implementation of a public option in a health care bill may be a non-starter, the idea of a public option “trigger” or delayed implementation may gather enough votes to pass. The trigger has the tentative support of Senator Olympia Snowe (R-ME) and would create a public insurance option if specified insurance reforms were not in place within a certain timeframe.

- Subsidies for middle class Americans: A major concern with some Senate Democrats is the perilous balance between an individual mandate and the cost of insurance. At issue is the concern that by mandating a certain level of insurance, some middle class families would face an increased insurance bill and instead opt to pay a financial penalty. Insurers are concerned this would weaken the pool of insured, especially since many of the opt-outs would be younger, generally healthier Americans. Others call it a tax on middle class Americans, something the bill seeks to avoid.

- Charitable deductions: Chairman Baucus has said any amendment that would add cost to his bill must be offset, and this is the most popular offset offered in members’ amendments. The provision would cap the value of itemized deductions at 33% or 35% for taxpayers whose brackets would be set to rise to 36% or 39.6% in 2011. ASAE and a host of other nonprofits oppose this provision as detrimental to charitable giving in a poor economy.

- Grassley amendments #489 and 490: While not tracked by most media, these two amendments by Senator Grassley would be onerous to many nonprofits. The amendments would they would (1) give the IRS statutory authority to require tax-exempt organizations to report governance and management information and (2) give the IRS expanded authority to challenge executive compensation. Both are being offered as “pay-fors” for health care reform, but it is unknown if the amendments will be debated this week or simply dropped.

Quick Hits:

The U.S. Chamber of Commerce emails the Finance Committee its objections to three major amendments to be considered… The White House shows how a health insurance exchange would work with a working example… Insurers advocate for an individual mandate without an easy opt-out… How the National Association of Insurance Commissioners would play a large role in reformed health care… USA Today offers pros and cons of taxing high-cost insurance plans.

As the Senate Finance Committee today continues to wade through hundreds of amendments to the health care reform bill drafted by committee Chairman Max Baucus (D-MT), ASAE has taken issue with two specific proposals that have generated concern in the nonprofit community.

The two amendments in question, filed by Senate Finance Ranking Member Charles Grassley (R-IA) in advance of the committee’s markup this week, would give the IRS statutory authority to require governance reporting from tax-exempt organizations, and expand the Service’s authority to challenge nonprofit executive compensation practices.

In a letter delivered to Senate Finance Committee offices yesterday, ASAE asks that both amendments not be accepted as part of the health care reform package currently in committee markup.

The IRS recently revised the Form 990 return filed by most tax-exempt organizations and added a new section on governance. The Grassley amendment, however, would protect the IRS from “wasteful legal challenges” by specifically mandating that the Service require governance information be reported in nonprofit filings. ASAE has voiced concern about the IRS creating uniform, narrow standards for good governance in light of the extraordinary diversity of the nonprofit sector. ASAE also believes the proposal could be interpreted to remove any legal recourse for exempt organizations whose governance practices are questioned by the IRS.

The second amendment would grant the IRS authority to subjectively determine whether an organization relied on appropriate comparable data in setting compensation for top executives. This extension of IRS authority seems “excessive and dangerous, and unfairly shifts the burden of proof to filing organizations to prove that the compensation is reasonable instead of the government,” ASAE stated.

What are your thoughts on these amendments?

As expected, Senate Finance Committee Chairman Max Baucus (D-MT) introduced his health care reform bill today after months of negotiating with three Democrats and three Republicans on his committee, dubbed the Gang of Six.

“This is a unique moment in history where we can finally reach an objective so many of us have sought for so long,” Baucus said in a statement today.

The Finance Committee mark up is scheduled to begin Sept. 22. Considered a more moderate alternative to the health care bills produced in the House and the Senate HELP Committee, the Baucus bill eschews the public insurance option in favor of creating membership-run nonprofit cooperatives to compete with the private insurance companies. The bill contains many of the other reforms endorsed by President Obama in his speech to Congress last week, including creating a state-based exchange through which individuals and small businesses could obtain insurance; providing tax credits for lower-income individuals and small businesses to help offset the cost of premiums; and requiring that most U.S. citizens and legal residents purchase health insurance or have health coverage through their employer.

According to Baucus, the Congressional Budget Office has estimated the cost of the bill at $856 billion over 10 years. Baucus said the bill will be fully paid for without adding to the federal deficit. To offset the cost, the bill calls for imposing a 35 percent tax on high-value insurance plans and new fees on insurers and other industry players.

The unveiling of the Senate Finance Committee’s bill has prompted renewed grousing from both sides of the aisle. Sen. Chuck Grassley (R-IA), the committee’s ranking member, has spent months at the bargaining table as one of the Gang of Six, but signaled this week he will not vote for the end product.

“Unfortunately, we’re operating under an artificial deadline set by the Democratic leadership and the White House,” Grassley said in a Sept. 15 statement. “I’m disappointed because it looks like we’re being pushed aside by the Democratic leadership so the Senate can move forward on a bill that, up to this point, does not meet the shared goals for affordable, accessible health coverage that we set forth when this process began.”

Grassley said he still has concerns that federal funds could be used for abortions, that illegal aliens could receive subsidies to help obtain insurance, and that medical liability reform measures aren’t tough enough.

The other two Republican members of the Gang of Six, Sens. Mike Enzi (R-WY) and Olympia Snowe (R-ME), haven’t yet said whether they will support the Finance bill, though many observers have said Snowe is probably the only hope for a bipartisan bill.

Meanwhile, liberal Senate Democrats are also balking at the Baucus bill. Sen. John Rockefeller (D-WV) told reporters Sept. 15 he won’t support the bill in its present form. Rockefeller has been pushing hard for a government-run public option and also opposes the excise tax on high-value health insurance plans included in the Finance bill. What do you think of the long-awaited bill unveiled by Sen. Baucus? How should the Senate proceed in the absence of Republican support for the bill?

Quick Hits

The full text of the chairman’s mark  … Reaction to the bill from Senate Minority Leader Mitch McConnell  … Ways and Means Chairman Charlie Rangel (D-NY) is skeptical about Senate plan (subscription required).

Last night the President spoke before a joint session of Congress, outlining his goals for comprehensive health care reform and spurring Congress to act and give him a bill to sign before the end of the year.

The speech (seen here) urged Congress to act this year and not delay in offering him legislation to sign, even invoking the efforts of the late-Senator Edward Kennedy (D-MA) to pass comprehensive reform.  The president also addressed some of the topics that had been debated in the August town hall meetings, including end-of-life counseling and illegal immigration, and offered Republicans the opportunity to work with the administration on the reform efforts.  However, he also stated his administration would not accept delays and would “call out” anyone who attempted to intentionally distort his legislation.

You can view analysis and in-depth summaries of the speech itself from Politico, The Washington Post, and The Wall Street Journal, but the president did give some specifics on what a bill he supports would contain.  They include:

-          A price tag around $900 billion that would not add to the deficit in the near- or long-term.

-          An alternative insurance offering to the currently uninsured that would compete with private insurance companies.  This plan could be a government-run public option or government supported cooperatives, but it would only be open to the uninsured and would be nonprofit.

-          Elimination of exclusions for preexisting conditions and a cap on out-of-pocket medical expenses for individuals.  Insurance companies would also be prohibited from dropping individual coverage except in cases of fraud.

-          An individual mandate to have insurance or pay a penalty.

-          State-based testing of medical malpractice reforms, borrowed from the previous administration.

-          Tax credits to small businesses to provide help provide insurance to employees.

-          Creation of a national “high risk” pool for individuals with preexisting conditions that would cover the gap between passage of the health care bill and implementation.

-          Creation of insurance Exchanges that allows low-income individuals and small businesses to “shop” for affordable insurance plans.

What are your thoughts on the president’s speech?

Quick Hits

The text of the Republican response to the speech by Rep. Charles Boustany (R-LA)… The text of the letter sent by Senator Kennedy to the President referenced in the speech… Senate Finance Chair Max Baucus sets the first health care bill hearing the week of September 21… The American Clinical Laboratory Association and medical laboratories meet with (subscription) Senate Finance staff on the new fee targeting them in the health care bill.

Update: After protests by some of the Energy & Commerce Committee’s liberal members forced a cancellation of Wednesday’s mark-up, chair Henry Waxman has rescheduled the mark-up for Thursday.  This was after a lengthy session reviewing the proposed changes to the bill with committee members.

Two major stories on health care broke this afternoon from both chambers.  On the House side, Energy & Commerce Committee Chair Henry Waxman (D-CA) announced a deal with the Blue Dog caucus that allows the committee to finish its markup before the August recess.  Speaking in front of reporters this afternoon, Waxman said the mark-up would continue at 4 PM today and he anticipates the bill will receive a vote out of committee by Friday.  However, the House Democratic leadership pledged that consideration of the bill would be delayed until after the August recess.  In addition, Waxman and the Blue Dogs agreed to exempt all small businesses with payroll greater than $500,000 from the employer mandate (up from the earlier $250,000 limit) and add language allowing doctors to negotiate their own rates on government health care plans.

On the Senate side, Finance Committee Chair Max Baucus (D-MT) announced that the Congressional Budget Office has scored his committee’s bill as costing under $900 billion over ten years, with the bill being fully paid for within those ten years.  The legislation would also cover 95% of Americans, fulfilling the major requirements for health care reform laid out by the president and Congressional leaders.  The bill’s cost could actually cost as little as $750 billion, according to reports.

Stay tuned to the Power of A for the latest in health care reform.

Senator Olympia Snowe (R-ME) emerged from a bipartisan conference yesterday to confirm that the Senate Finance Committee negotiators will not include two major components of the Democratic health care plan in their bill: the creation of a government-run insurance company (”public plan”) nor a requirement that all employers provide their employees with health care coverage.

Instead, the committee’s bill will likely include two concepts that so far have only been discussed by the Finance Committee.  Instead of a public plan to act as a competitor to private insurance companies, the bill will include “co-ops”, or a series of non-profit, non-government insurance options for the self-employed or small businesses regulated by standards from the National Association of Insurance Commissioners. These types of arrangements are found in other sectors of the economy, including agriculture. The National Cooperative Business Association and National Rural Electric Cooperative Association provide good examples of how current cooperatives operate.

In addition, the Finance Committee bill will not have a “pay or play” employer mandate but a so-called “free rider” approach.  The concept is that while there is no absolute mandate for employers to provide insurance for employees, employers (with 50 or more employees) whose workers receive Medicaid or a tax credit through a health insurance exchange must contribute half of the average Medicaid cost for workers or 100% of the cost of the tax credit received for providing the workers with health insurance.

The Finance Committee negotiators also said yesterday a bill is close to being completed, but there was still no timetable to release the bill.  The final list of revenue raisers is also being discussed, but none of the negotiators would comment definitively on what would be included.  Snowe suggested that taxing the “Cadillac” health insurance plans was being considered, and the committee could reduce the minimum level for the tax.

An idea that surfaced in discussions (subscription) Monday was a surtax on medically-unnecessary plastic surgery, also known informally as the “Botox” tax.  The surtax would be 10% on the cost of the procedures and would include things like Botox shots, face-lifts, and teeth whitening.  The feasibility of the tax being included in the Finance bill is unknown, however, as committee chair Max Baucus seemed to shoot down the idea talking with reporters: “That hasn’t been on any list I’ve seen in a long time.”

Quick Hits

The removal of a health care bill from the Senate’s floor schedule opens room for other issues, including the Travel Promotion Act of 2009… Energy & Commerce Chair Henry Waxman (D-CA) makes an offer (subscription) to address the Blue Dogs 10 points of concerns, but there has yet to be a formal reply… The House Democratic caucus goes through the health care bill section by section… Is the reason health care reform has not passed the absence of these four critical people?… The New York Times has a picture showing and explaining some of the key negotiators in the Senate… Volunteering (especially through nonprofits) is up, showing another way associations advance America.

With Senate Majority Leader Reid’s announcement that the Senate would not pass a comprehensive health care reform bill before the August recess, the end of July and August recess will no longer be a frantic time to try and pass health care reform, but a time of preparation for a push in the fall.  All members of Congress will be spending a few weeks in August back in their districts and states, and it is very likely health care will be one of the top issues they discuss with their constituents.  Both chambers are in different positions with their bills, and their next seven weeks will be worth watching:

-          In the Senate, the HELP Committee has already voted a bill to the floor.  The legislation, which went through a complete mark-up, received no Republican votes and is seen as the more Democratic health care bill.  The HELP bill however cannot be voted on until it married to the Finance Committee bill, which has yet to be released.  Finance Committee chair Max Baucus (D-MT) yesterday said the removal of the deadline would help his negotiations (subscription) in finalizing their bill.  The Senate leaves for recess August 7; by then the Finance Committee may release their version of the bill, but it is unlikely it will be passed from committee before August.  Over the recess, look for staff and members to negotiate how they can merge the HELP and Finance bills while trying to ensure 60 votes for passage.

-          In the House, negotiates continue between the Blue Dogs and Democratic leadership.  The House recess begins a week earlier than the Senate’s (July 31), so it will be nearly impossible for the House to pass its bill before leaving (although Rahm Emanuel said this morning it will do just that).  Some media sources have suggested that the Democratic leadership could bypass the Energy & Commerce committee and just bring the health care bill to the House floor, but such a maneuver would likely torpedo discussions with the Blue Dogs.  Over the next seven weeks, look for how the Democratic leadership balances negotiations with the Blue Dogs while trying to maintain support for the bill with more liberal caucuses, such as the Congressional Black Caucus.

Quick Hits

House Republicans are almost ready to release their health bill… The president says he is unconcerned with Senator Reid’s announcement and is focused on signing a bill before the end of the year… The White House chief of staff directly involves himself in the House negotiations… The US Chamber of Commerce outlines its concerns with the proposed health care bills.

Update - A link to the just released House bill can be found here, and a summary of the legislation here.  The committee also has guidance documents for employers, on the public plan, and other aspects at the Education & Labor committee website.  Check back for ASAE’s summary of the legislation for associations.

Original Post - A ticking clock may be the best image to describe yesterday’s developments in health care in both chambers.

House Democratic leaders are expected to unveil their comprehensive health care legislation today.  The legislation was supposed to be unveiled last week but protests from the Blue Dog caucus and over how to pay for the legislation derailed the timeline temporarily.  ASAE will post an analysis of the legislation on the Power of A, specifically looking at if it addresses Blue Dog concerns over small business costs and how the bill raises revenue.  According to Congress Daily (subscription), the Blue Dogs and House Democratic leader have already failed to compromise on an employer mandate for small business, with leadership setting an exemption for companies with payroll under $250,000, which Blue Dog leadership feels excludes too many small businesses.

On the Senate side, Senate Finance Chair Max Baucus has told his committee that their health care bill’s unveiling will be Thursday (subscription), according to ranking member Charles Grassley (R-IA).  While Baucus publicly has denied this timeline, he has come under increased pressure from the White House and Democratic leadership to release his committee’s bill.  Yesterday, White House officials held a conference with Baucus, Ways & Means Chair Charlie Rangel (D-NY), Senate Majority Leader Harry Reid (D-NV), and Speaker Nancy Pelosi (D-CA) to coordinate their efforts on health care reform.  According to the Associated Press, the president told Baucus directly that he wanted a bill publicly announced by the committee before the end of the week.  When it is released, ASAE will post a summary on this site.

Quick Hits

Congressional Republicans hone talking points on potential health care legislation… HELP Committee approves amendment for 12-year exclusivity window before generic versions of biologic drugs can be marketed… Senator Grassley is profiled by Wall Street Journal and targeted by Health Care for America… Insurance associations hold health care “fly-in”.