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June 2009 St@teside

Federal Reform Debate in Congress Heats Up

The federal health reform debate is heating up in Congress with comprehensive reform bills being introduced from the right and the left.  The center of the action is the Senate Finance Committee; its bi-partisan bill was expected to be delivered this week but has been delayed while final pieces of the proposal are scored by the Congressional Budget Office.  Finance Committee Chairman Max Baucus (D) has continued to press for passage of legislation before the August recess.  President Barack Obama has joined him by calling for Congress to work quickly, while some Republicans have begun to raise concerns that legislation is being “rushed” through.

Meanwhile, both Democrats and Republicans have begun to outline their vision for a reformed health care system.  Senator Edward Kennedy (D), Chairman of the Health Education, Labor and Pensions Committee released a Democratic HELP Committee bill, the “Affordable Health Choices Act” on June 9. While the bill is still in draft form and is designed to complement Finance Committee recommendations, it proposes significant reforms, including:

  • An individual mandate, if an affordable plan is available,
  • Subsidized coverage (on a sliding-scale) for low- and moderate-income people as well as assistance for small businesses to provide coverage for their employees,
  • Private insurance reforms overhauling the individual and group health insurance markets,
  • State and regional “Gateways” (exchanges), and
  • A wide range of provisions aimed to improve quality of care, with a strong emphasis on public health.

On the same day that the draft bill was released, Democratic leaders of the three committees of jurisdiction in the House of Representatives released their own outline for reform.  Republican leadership has yet to release their own comprehensive strategy for reform, but several individual and small groups in both the House of Representatives and the Senate have begun to make their views known (see here, and here for examples).

The key sticking points are becoming more apparent as concrete plans are introduced.  As expected, the main dilemma is how to pay for the plan.  The HELP bill was estimated to cost $1 trillion over 10 years, sparking criticism over its cost.  The Obama Administration weighed in on this issue with

new recommendations

on how to pay for reforms, putting an additional $313 billion on the table, bring its total number of suggested spending cuts and revenue increases to nearly $1 trillion.  Its new recommendations include more than $100 billion in DSH (disproportionate share) payment cuts and reductions in payment increases to hospitals, medical equipment manufacturers and laboratories.  Other outstanding issues revolve around the role of employers, especially whether to maintain the full tax deduction for employer-sponsored coverage, the structure and requirements of a proposed insurance exchange, and the inclusion of funding comparative effectiveness research.