September marks the return of Congress to Washington and the continuation of a historical debate on healthcare reform. As healthcare annual spending tops $2.4 trillion, the stakes are high as Congress faces conflicting pressures to expand coverage and curtail spiraling costs. Controlling these costs is a top priority for President Obama and Congress and will be a key driver of economic stability and growth.
What began as a civilized debate turned into a full-scale political showdown during the August recess– playing out in raucous town hall meetings across the country. A majority of Americans want healthcare reform, but their views vary widely on the approach and funding of reform. Five different Congressional Committees are debating the issue, and three comprehensive bills have been released, including the long-anticipated Senate Finance bill. The question remains– can consensus be reached in a Congress that remains sharply divided on the details of reform?
President Obama Takes a Stand
Action on reform started early as Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee released a high level framework for reform just after Congress reconvened. That news was quickly overshadowed by President Obama’s speech to the joint session on September 9th. The speech was meant to reset the debate and clear up any confusion resulting from political posturing during the town hall meetings and debates during the recess.
The President delivered an emotional and eloquent speech that invoked the memory of Senator Ted Kennedy and attempted to refocus the debate on the merits of his vision for health care reform.
Key components of the President’s plan include:
•Ending pre-existing condition limits
•Limiting premium differences based on gender and age
•Eliminating loss of coverage due to health status
•Capping out-of pocket expenses
•Protecting Medicare
•Eliminating the "donut-hole" gap in Medicare Part D coverage for prescription drugs
•Creating a new health insurance exchange
•Providing new tax credits to help people buy insurance
•Providing small businesses with tax credits and affordable options for covering employees
•Offering a public health insurance option to assist the uninsured and those who cannot find affordable coverage
•Immediately offering new, low-cost coverage through a national "high risk" pool to protect people with pre-existing conditions until the new Exchange is in place
In an effort to reach across the aisle, President Obama did address the need for malpractice reform to help bend the cost curve. He also gave a “read my lips” pledge to make the reform deficit neutral. While a remarkable speech, the most concrete framework for reform emerged from the Senate Finance Committee as it began its long-awaited mark-up this month.
The Three Key Bills
Senate Finance Chairman Baucus released the Chairman’s Mark of the Committee’s bill on September 16th. Senate Majority Leader Harry Reid (D-NV) set a goal to get a bill to the floor for a full Senate vote by the end of September, but the Committee must still finalize the actual language that will appear in the bill. Expect intense philosophical and political debate addressing several of the more contentious provisions in the bill.Here is an overview of the proposed Senate Finance Bill:
•Cost projected to be $856 billion over 10 years
•Creates health care affordability tax credits to help low and middle income families purchase insurance in the private market
•Provides tax credits for small businesses to help them offer insurance to their employees
•Allows people who like the coverage they have today the choice to keep it
•Reforms the insurance market to end limits on pre‐existing conditions and health status
•Eliminates yearly and lifetime limits on coverage
•Creates web‐based insurance exchanges that would standardize health plan
premiums and coverage information to make purchasing insurance easier
•Gives consumers the choice of non‐profit, consumer owned and oriented plans(CO-OP)
•Standardizes Medicaid coverage for everyone under 133 percent of the federal poverty level
•Requires adoption of standardized electronic administrative transactions to drive efficiency, reduce errors and lower costs
While the Senate Finance Committee bill is considered most likely to advance, two other bills have already been approved in key Committees– the Senate Committee on Health, Education, Labor, & Pensions (HELP) and the House Tri-Committee bill passed by the Committees on Energy and Commerce, Ways and Means, and Education and Labor. Those bills will need to be reconciled with the final version of the Senate Finance bill.
In July, the Senate HELP Committee, chaired by the late Senator Kennedy, became the first Congressional committee to approve meaningful healthcare legislation when it passed the Affordable Health Choices Act. Originally, the Congressional Budget Office (CBO) estimated the bill to cost less than $615 billion over 10 years, but this month the CBO confirmed in a letter to Senator Enzi the bill would increase the deficit by over $1 trillion and would lead to an increase in national health care spending.
Key provisions include:
• State health insurance exchanges
• Government-run, public health insurance option to compete with private insurers to drive costs down
• Individual insurance mandate, with some exceptions for those who cannot afford coverage
• Employers with 25 or fewer employees also exempt from penalties
• Prohibiting insurers from denying coverage based on their health status
• Promoting quality through financial incentives for providers
• Coverage of preventive health services
• Extending coverage for dependent adults until age 26
• No lifetime or annual limits on individual or group health insurance policies
The House Tri-Committee approved its own healthcare reform bill before leaving for the August recess. This bill known as H.R. 3200 was much more hotly debated and was approved in a much closer vote than the HELP Committee’s bill. It seemed unlikely that the bill would pass until several concessions were made to Blue Dog Democrats who had crossed party lines to protest certain provisions in the legislation.
Basic components include:
• Creation of a public insurance option
• Expanding access to health insurance
• Standardized benefits packages
• Provisions to end premium increases or coverage denials for "pre-existing"
conditions
• Eliminating co-pays for preventive care
• "Affordability credits" to make premiums affordable
• Caps on out-of-pocket expenses
• Employer mandate - pay or play
• Guaranteed catastrophic coverage
The Senate Finance Committee was widely viewed as the key to passing meaningful bi-partisan legislation this year. However, after three months of negotiations between the “Gang of Six”– the three Democratic Senators and three Republican Senators who helped craft the legislation– no Republican Senators would publicly support the Chairman’s Mark of the bill. Several key Democrats from both the House and the Senate have publicly stated their disapproval of the legislation in its current form as well. Senator Kennedy’s absence not only leaves Democrats without a statesman that could potentially bridge the partisan divide, but also leaves Senate Democrats one vote short of the sixty needed for a filibuster-proof majority when the debate advances to the floor.
If talks continue to deteriorate between the two parties, Senate Democrats might be willing to pursue the budget reconciliation process which would allow the legislation to pass the Senate with a simple majority instead of 60 votes. Earlier this year, the Senate agreed to a deal that would allow the process if a bill has not passed by October 15th.
Expect the debate to escalate in the days ahead as the Senate Finance legislation advances towards the floor. With Republicans stating the bill goes too far and Democrats criticizing the bill for not going far enough, Congress will need a near herculean effort to bridge the divide and pass meaningful bi-partisan health care reform this year.
Emdeon Supports Sensible Policies, Practical Solutions
Emdeon supports and promotes sensible public polices and practical solutions that make healthcare efficient. Our goal has been to help reframe the healthcare reform debate and focus on actions we can take today to take costs out of the system. Key areas like administrative simplification, program integrity/fraud and abuse, third party liability cost avoidance and public beneficiary management offer billions in potential annual savings.
The U.S. Healthcare Efficiency Index™, launched by Emdeon in 2008, identified $300 billion in savings over 10 years from automating the most basic healthcare administrative transactions. Emdeon has worked to raise awareness of these potential savings that can free up dollars to pay for delivery of care or offset costs of longer term reforms. Currently all three major bills include provisions in these key areas.
Congress Returns to Resume Critical Healthcare Reform Debate
