The Power of A

In a move the national media is decrying as the death of the public option, the Senate Finance Committee voted down two amendments yesterday that would have inserted language into the Chairman’s Mark creating and funding a public insurance plan run by the federal government.

The Chairman’s Mark currently has language funding the creation of nonprofit cooperative health care plans, an idea meant to entice Republican and moderate Democratic votes for the Finance Committee legislation.  Both amendments sought to replace the cooperative language with public option language.  The first amendment, offered by Senator Rockefeller (D-WV), would have created a public option with a reimbursement structure for the first two years that mirrored Medicare, after which the government would have negotiated reimbursement rates with providers.  The proposal, seen as the most liberal public option plan, was defeated 15-8 with opponents claiming the Medicare rates were too low for doctors and hospitals.

The second amendment was offered by Senator Charles Schumer (D-NY).  Like the Rockefeller amendment, the Schumer amendment would have created a public plan but have negotiated reimbursement rates with providers from its creation.  That amendment was defeated by a 13-10 vote, with all 10 Republican committee members voting against it with Senators Lincoln (D-AR), Conrad (D-ND), and Baucus (D-MT).  After considering those two amendments, the committee moved through a few more amendments (including approving a Republican amendment requiring members and staff to participate in a state-based exchange for insurance) before adjourning around 10 PM.  The markup will continue at 10 AM today, and is being broadcast over the internet at the committee website.

The 10^th Annual Summit Awards Dinner

A special thanks to those who attended and supported the 10^th Annual Summit Awards Dinner last night at the National Building Museum.  The dinner honors six incredible association programs (which you can see here) that exemplify the Power of A message of associations as pioneers of collaborative problem solving.  Please visit our site www.asaecenter.org/summitdinner in the upcoming weeks to view pictures of the event and find out more information about next year’s dinner.

Quick Hits

Roll Call (subscription) is reporting this morning that the White House is preparing a draft (or possibly multiple drafts) of health care legislation that can be introduced or use to influence the debate if Congress stalls on consideration of comprehensive legislation… America’s Health Insurance Plans, the trade association for the insurance industry, released an outline of how the Finance language would affect the insurance industry… Senator Carper (D-DE) is discussing with Democratic senators a state-based alternative to co-ops and the public plan… House leadership tries to trim the cost (subscription) of the Tri-Committee bill back to $900 billion.

Although it has been hinted at for weeks, this Sunday the Obama administration made its biggest hedge of support for the “public plan”.  On CNN’s State of the Union Sunday night, Department of Health and Human Services Secretary Kathleen Sebelius said the public plan “is not the essential element” to health care reform for the administration.  She also signaled potential support for the co-ops plan being considered in the Senate Finance Committee.

Sebelius reiterated on the program that the essential components for any health care plan that would be supported by the White House are choice and competition.  Her remarks came one day after the President at a town hall in Montana called the public plan “one sliver” of overall health care reform.

Update: White House and Congressional officials clarified Secretary Sebelius’ comments, saying that the administration still supports the public plan but does not consider it the most important part of reform.

The Senator who initially proposed the co-op proposal, Senator Kent Conrad (D-ND), said on Fox News Sunday that the public plan did not have enough support in the Senate, and his co-op proposal was the only plan that could attract enough votes to pass comprehensive health care reform.  He also reiterated that the co-ops that would be established would be nonprofit and member-run.  On the same program, Senator Richard Shelby (R-AL) expressed tentative support for the co-op proposal, lending credence to the idea that co-ops can be a bipartisan proposal.  You can read more details on the co-op proposal here.

The problem with the co-op proposal from a political standpoint comes from some members of the Democratic caucus.  Last month, members of the Progressive Caucus sent a letter to the House leadership stating that the letter’s 60 signatories would not support any comprehensive health care bill without a public option.  Yesterday, Rep. Eddie Bernice Johnson (D-TX) told CNN that a public plan was an essential element for liberal support for a bill.  “The only way we can be sure that very low-income people and persons who work for companies that don’t offer insurance have access to it, is through an option that would give the private insurance companies a little competition,” she said.

Quick Hits

Politico reports that a revised timeline for House passage of health care has been released.  Merging of the three committee bills is about 80-85% done, and the new target date for passage is the end of September… The Senate is still looking to hold to the September 15 deadline for a Finance Committee deal, and a possible deadline for floor passage would be right before Columbus Day… Is the administration’s promise that a new plan would allow everyone to keep their insurance accurate? asks The Washington Post.

As expected, the Senate broke for August recess last week without the Finance Committee releasing a health care bill.  The news today however is comments made by a Democratic leader that signals a possible concession to the Finance Committee and Senate Republicans on a controversial section of the leadership’s bill.

Majority Whip Richard Durbin (D-IL) on CNN’s State of the Union said he was willing to support health care legislation without a public plan.  According to The Hill, Durbin said “I support the public option but yes, I am open” to voting for legislation without it.  Currently, the Senate Finance Committee’s health care proposal does not contain a public plan and substitutes language creating privately-owned “cooperatives”.

While the Finance Committee’s bill is still under wraps, The Washington Post last week revealed additional details contained in the legislation.  The revised bill lowered its cost by $100 billion while expanding Medicaid coverage and covering about 94% of Americans.  It also includes, as a financing option, a tax on “Cadillac” insurance plans.  The tax would be up to 35% on insurance companies that offer health insurance plans valued above $21,000 for families or $8,000 for individuals.

Despite reported progress, the six Senate Finance negotiators have yet to finalize the bill, leading even the negotiators to begin considering alternatives to their comprehensive plan.  Finance Committee Ranking Member Charles Grassley (R-IA) Tweeted yesterday that lawmakers should reconsider the so-called Wyden-Bennett health care bill.  The “Healthy Americans Act” would require all Americans to be insured in a Health Americans Private Insurance (”HAPI”) plan, either through the state or an employer, and provide federal subsidies for lower-income Americans.  The legislation has 14 bipartisan cosponsors, but was considered to this point a non-factor in the health care debate.

Quick Hits

Will the taxing of “Cadillac” plans lead to the same problems as the alternative minimum tax?… The White House creates a webpage to answer criticisms of health care proposals… USA Today finds that seniors are most resistant to changing the current health care system.

Before the House left for the August district work period on Friday, the Energy & Commerce Committee became the fourth Congressional committee to pass comprehensive health care legislation (subscription).  However, the bill passed after a series of amendments negotiated between a number of Democratic caucuses, meaning a long month of merging the committee bills by the House leadership.

Amendments of note that were approved included:

-          The Baldwin amendment to specify rules for electronic medical transactions (approved 32-26).

-          The Eshoo amendment to give biologics companies 12 years of exclusive marketing of their products (approved 47-11).

-          The Ross amendment (aka the compromise) that increases the number of small businesses exempt from an employer mandate from those with payrolls below $250,000 to $500,000, allows for the creation of health care co-ops, and saves $100 billion from the overall bill (approved 33-26).

-          The Schakowsky amendment that prevents insurance companies in the exchange from raising premium costs faster than medical inflation (approved 32-23).

Amendments of note that were not approved included:

-          The Barton amendment to create a Health Care Information Transparency Office with oversight similar to the Security and Exchange Commission (failed 18-28).

-          The Radanovich amendment to subject the public plan to state taxes (failed 23-35).

-          The Terry amendment to allow the uninsured to participate in the federal government health care plan instead of the exchange (failed 28-31).

Committee Democrats also told the press that Speaker Pelosi had promised an up-or-down vote on a single-payer health care bill on the floor of the House during the health care debate.

Do you think the changes to the Energy & Commerce bill improve it?

Quick Hits

Associations that work together through the Coalition on Human Needs honored their executive director (subscription)… Congressional Democrats plan their message for the month-long August break… Administration officials do not close the door on a health care middle class tax increase, but say unlikely… Senator Rockefeller publicly questions the co-op proposal.

Key Senators negotiating aspects of the Finance Committee health care reform bill spoke to the media yesterday and gave further details on the still-unfinished legislation.  Senator Kent Conrad (D-ND) gave further details on the bill’s “co-op” proposal, and although the media coverage focused mainly on the debate among Democrats (subscription) on whether a co-op could substitute for the public plan, the details sound similar to an idea that associations have been supporting as needed reform for years.

According to Congress Daily (subscription), Conrad said co-ops could be established at the local, state and national level.  States could establish the local co-ops, but Conrad failed to elaborate on what entities could establish national co-ops.  These co-ops would require $6 billion in start-up costs, but Senate negotiators are estimating that a series of co-ops would provide insurance to 12 million Americans, which would make it the country’s third largest insurer.  Policies and regulations would initially be established by the Department of Health and Human Services.

The idea of local co-ops is not a new one to associations; as noted in this space yesterday associations such as the National Cooperative Business Association and National Rural Electric Cooperative Association provide structure for co-ops in their specific areas.  The Los Angeles Times also provides more details on existing co-ops in this article.  But in the health arena the concept of pooling for health insurance has long been a reform supported by associations.  In the current Congress, numerous associations have supported and pushed the Small Business CHOICE Act (HR 859), sponsored by Reps. Nydia Velazquez (D-NY) and Sam Graves (R-MO).  The legislation would allow small businesses that belong to the same association to pool in the catastrophic insurance market and create a reinsurance backstop that provides coverage when the small business’s primary care coverage is exceeded.  Prior to this, many association supported association health plan (AHP) legislation, which would have allowed associations and small businesses to create national insurance pools to make insurance affordable for members and members’ employees.

Based on the information released, do you think a series of local and national co-ops for health insurance would achieve the same as a series of AHPs?

Quick Hits

House Small Business Chair Velazquez pens a letter to Energy & Commerce Committee Chair Waxman (D-CA) advocating for changes in health care bill to help small business, including HR 859… President Obama visits AARP to hold a health care discussion… the latest White House push on health care… House Democrats still trying to decide how to proceed with their health care bill.

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.

Yesterday, the Senate Health Education Labor and Pensions (HELP) Committee passed its health care legislation out of committee in a 13-10 vote.  This is the first comprehensive health care bill to be passed from committee in this Congress.  The major differences between the HELP bill and yesterday’s released House bill include: a role for associations as navigators, a definition of small business using number of employees not payroll, and different penalties for the individual and employer mandates.  ASAE has taken a look at the amended legislation (you can see a summary here) and has prepared this quick guide to the affects of the legislation on associations and individuals:

Businesses (Including Associations)

1.  All businesses must provide health insurance to their employees. Those who fail to cover at least 60% of their full time employees’ (FTEs’) monthly premiums are subject to a $750 annual fine for each uninsured FTE, with the first 25 exempted.

2.  Professional and trade associations, unions, and chambers of commerce can contract with their states to serve as “navigators” for the Affordable Health Benefits Gateway (see description under Individual). Associations and other groups would receive federal funding through the states to educate members and the public on how to receive insurance through the Gateway.

3.  The bill raises the federal limit for the amount an employer can reward employees for participating in wellness programs from a 20% premium discount to 30%.

Small Businesses

1.  All employers with fewer than 25 employees are exempt from the employer mandate and are eligible for the program credits described below.

2.  Beginning in 2010, businesses with 50 or fewer FTEs that pay 60% or more of their employees’ premiums would be eligible to receive a tax credit for three consecutive years. The size of the credit would be based on number of employees, types of coverage, and amount of time the employer paid over 60% of the premiums.

Individuals

1.  The bill mandates that everyone have insurance coverage or pay a $750 per year fee.

2.  The bill allows individual states to create Affordable Health Benefits Gateways. These would be insurance exchange mechanisms that individuals and qualified employers can find the right plan for them. If a state fails to establish a Gateway the Department of Health and Human Services can create a Gateway in that state. Gateways can be regional and state-specific.

3.  Low- and moderate-income individuals and families would receive credits to help with purchasing insurance through the Gateway. The credits would be on a sliding scale of up to 400% of the federal poverty level.

4.  The self-employed who do not receive a Gateway-insurance credit are eligible to receive the small business credit for employers with 50 or fewer FTEs.

5.  Individuals would have the option of keeping their current health care plan, shopping for a health care plan outside of an exchange, or shopping for a health care plan within the Gateway in the person’s state. The Gateway would include private and public options.

6.  The age for a dependent to stay on a health insurance plan is increased to 26 years of age.

In addition, details of the soon-to-be-released Senate Finance Committee bill have slowly been released (subscription).  According to reports, the committee bill will not have a public plan, but will instead include language authorizing the creation of health care co-operatives as an alternative to traditional private insurance plans.  In addition, the bill would be paid for in part by a windfall tax on private insurance companies; this idea gained public support from two additional key Senators yesterday.  ASAE will prepare a summary of the Finance Committee bill when it is released, so keep The Power of A bookmarked for the latest information.

Quick Hits

The committee hearing schedule for the House Education & Labor, Energy & Commerce, and Ways & Means Committees… House Republican Leader Boehner’s office releases a chart describing the House bill… the American Medical Association continues its debate internally (subscription) on the public plan… Will the Blue Dogs go along quietly with the Democratic leadership on the House bill?

Senators from both parties and key committees are beginning to voice support for an idea proposed by Senator Kent Conrad (D-ND) earlier this week that is an alternative to a government-run public insurance company (”public plan”).

While complete details have not been released, Conrad’s proposal would allow the creation of a series of state and regional consumer health cooperatives (”co-ops”). The co-ops would be 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.

Since the cooperatives would not be government run and exist currently, the idea has gained support from Republicans such as Finance Committee ranking member Charles Grassley (R-IA): “If it can be presented as an entirely…private-sector operation and incentive and like co-ops that we know, generally in the Midwest, I think it’s got some possibilities.” However, the idea still is under-development; the National Journal is reporting (subscription) that Senator Charles Schumer (D-NY) is working with Senator Conrad to make the idea palatable to pro-public plan Democrats.

Associations such as ASAE have been pushing for pooling ideas such as cooperatives (like the Small Business CHOICE Act) as a way to provide savings for small businesses and the self-employed. Can cooperatives (run by associations or not) be a viable alternative to a public plan?

Quick Hits

Baucus staff threatens Democratic health care lobbyists - again (subscription)… Baucus announces a June 23^rd mark-up of health care legislation, with a “draft mark” released June 17… Democratic infighting on health care examined by Politico… The American Medical Association comes out against the public plan… President Obama takes health care push to Wisconsin… The Washington Post profiles maybe the most important person in the health care debate.