The Power of A

Updated 1:11 PM: Yesterday evening Senate Majority Leader Harry Reid (D-NV) unveiled his merged comprehensive health care legislation, hours after the Congressional Budget Office (CBO) had released its score of the legislation.  The CBO scored the legislation as costing $848 billion over the next ten years, but would reduce the deficit $130 billion.  The bill according to CBO would also cut Medicare spending by $491 billion over 10 years and cover 94% of non-senior Americans.

Currently, the speculation is that Reid will make a motion to proceed on debate on the legislation on Saturday.  This motion, which will be filibustered, will require 60 votes to pass.  It is expected that all forty Senate Republicans will vote “no” on the motion, requiring a united Democratic caucus to proceed to debate on the bill.  Reid in public statements has sounded confident that he can get 60 votes on a motion to proceed, but the vote may have to be delayed due to Senator Baucus suddenly having to leave town.

The bill, which is over 2,000 pages long, combines the Senate HELP and Finance Committees health care bills passed earlier this year.  The Hill summarizes the major provisions here.

The following are the highlights of the legislation: continue reading

The House bill unveiled this morning is a 1,990 page document that the Congressional Budget Office has scored at $894 billion over ten years, covering an additional 36 million Americans and 97% of citizens overall.  You can see the legislation in its entirety here; the section-by-summary here; a list of major changes from HR 3200 here; and a time line for the legislation here.  Below is a summary of the major provisions of the bill, with changes from HR 3200 noted in parentheses:

continue reading

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.

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.

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?

Yesterday, the House Democratic leadership unveiled their comprehensive healthcare legislation.  The legislation has a few changes from the discussion draft circulated last month (you can see the changes here) but the major ones include a new surtax on high-income families and a sliding scale penalty for small businesses that do not offer health insurance coverage.  To help associations make sense of the provisions, ASAE below has outlined below what the bill could mean for associations and their employees:

Businesses (Including Associations)

1. Businesses would be required to provide a minimal level of coverage for employees or pay a penalty of 8% of their payroll. The minimum level of coverage is specified in the bill and can be further specified by the Health Benefits Advisory Committee.

2. Employers would be required to contribute 72.5% of the cost of premiums for FTEs’ coverage and 65% of family plans.

3. Five years after the bill is passed, all businesses would be required to meet the minimum coverage standards required of those in the Exchange. Also, employers could no longer place annual or lifetime caps on plans.

4. Employers that offer health insurance must provide a process to automatically enroll employees into their health plan with the lowest premium. Those same employees are eligible to opt-out of the plan.

Small Business

1. Small businesses, based on size, are eligible to participate in the Health Insurance Exchange to find insurance for employees. Companies with ten or fewer employees can participate in the first year, and it expands to 20 or fewer employees in the second year. After the second year, participation can be extended to additional businesses. Businesses that participate in the Exchange have their plans for employees managed by the Exchange.

2. All businesses with payroll under $250,000 are exempt from the employer mandate. Businesses with payroll between $250,000 and $400,000 that do not provide insurance would pay a modified fee based on their payroll size (2% for $250k-$300k; 4% for $300k-$350k; and 6% for $350k-$400k).

3. A tax credit is provided to small businesses that offer health insurance.

Individuals

1. Individuals not covered by their employers may participate in the Health Insurance Exchange to find coverage fitting themselves or their family, either through private insurance or a public insurance plan.

2. “Affordability credits” would be available for individuals and families up to 400% of the federal poverty level ($43,000 for individuals and $88,000 for families) on a sliding scale. The credits would be administered through the Exchange. Families and individuals at or below 133% of the federal poverty level are eligible to be covered by Medicaid.

3. The bill imposes an individual mandate; the penalty for failure to have coverage would be 2.5% of the person’s modified AGI but would not exceed the average cost of a health care policy in the Exchange.

4. If an employee’s insurance costs their employer more than 11% of that employee’s AGI, that employee can leave the employer plan and enter the Exchange.

5. Families whose income exceeds $350,000 (or individuals whose income exceeds $280,000 annually) would pay a surtax to finance the reform. Families earning between $350,000 and $500,000 would pay a 1% surtax; those earning between $500,000 and $1,000,000 would pay a 1.5% surtax. Those families earning above $1,000,000 annually would pay a 5.4% surtax. The surtax numbers could increase if the anticipated healthcare revenue does not meet the expected level.

Does the House proposal positively or negatively affect associations?

Quick Hits

HELP Committee passes its version of the healthcare bill… The Blue Dog coalition is not entirely pleased with the House bill, but the Progressive Caucus is… The Wall Street Journal analyzes on how the bill would affect small businesses… House Republicans prepare to release their own healthcare overhaul language… Is the Senate Finance Committee considering stricter reporting on corporations’ 1099 forms to pay for their legislation? (subscription)… Or are they considering a windfall profit tax on private insurers?… President Obama will speak on healthcare in the Rose Garden today with the American Nurses Association.

President Obama yesterday addressed the annual meeting of the American Medical Association (AMA) and waded into some of the controversies surrounding health care reform.

Last week, the AMA issued a statement expressing discomfort with the idea of a public insurance plan, and has scheduled a vote this week during the annual meeting to establish a position on the idea. The president tried to woo the membership by addressing the issue head on and reiterating the argument that it was needed to level the playing field with traditional insurance companies.

President Obama also ruled-out the idea of reform including a “single payer system” or all health insurance provided by the government: “There are countries where a single-payer system may be working. But I believe - and I’ve even taken some flak from members of my own party for this belief - that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I’m trying to bring about government-run health care, know this - they are not telling the truth.”

In addition, the president reiterated his support for legislation with employer and individual mandates as well as calling for a revenue-neutral bill paid for by his charitable tax deduction rate reduction proposal and elimination of waste in the health care system. He also referred to health care costs as a “ticking time-bomb” that needs to be addressed to prevent a long-term budget disaster.

Rep. Tom Price (R-GA), a non-practicing orthopedic surgeon and AMA member, held a pre-speech conference call with reporters to argue against any proposed public plan. “When the government is running something, it subsidizes it to the point private industry can’t compete,” he said on the call.

Did you find President Obama’s speech convincing (especially if you work in a medical profession)?

Quick Hits

Congressional Budget Office releases HELP bill estimates (letter here)… Kaiser Family Foundation Poll finds Americans support health care reforms, but not pay-fors… American Hospital Association CEO (and ASAE member) Richard Umbdenstock speaks out against president’s plan to cut Medicare and Medicaid… Today’s 2:30 PM HELP Committee hearing has been moved to tomorrow (Wednesday) at 10:00 AM.