October 30th, 2009 – It was another busy week on the Health Reform front as the Sentate Bill prepares to go into floor debate next week. It is expected that this may take anywhere from 3 to 8 weeks.
On Monday, Senate Majority Leader Harry Reid (D-NV) announced that the health care reform package from the Senate is expected to include a public option with an opt-out provision should a state choose to not participate in the government plan. While liberal Democrats cheered the inclusion of the government-run plan, some moderates – including Sens. Joe Lieberman (I-CT), Blanche Lincoln (D-AR), Evan Bayh (D-IN) and Mary Landrieu (D-LA) – all voiced concerns.
Sen. Lieberman said that he would vote to block the passage of the Senate health care reform bill in Sen. Reid’s proposed form. In addition, Sen. Olympia Snowe (R-ME), the only Republican to vote in favor of any health care reform legislation to date, stated that she is “deeply disappointed” with the inclusion of the public option.
This backlash comes as a blow to Sen. Reid and calls into question whether he has the 60 votes needed for final passage of the bill without an anticipated Republican filibuster. Sen. Reid has delivered a variety of proposals to the Congressional Budget Office (CBO) for cost estimates as he works to finalize the legislation.
On Thursday, following weeks of negotiations to merge three bills passed by House committees last summer, House Speaker Nancy Pelosi (D-CA) unveiled the House’s 1,990-page health care reform legislation.
The merged legislation includes a version of the public option, favored by moderate Democrats, that uses reimbursement rates negotiated with private insurers rather than the option favored by liberal Democrats that pegs rates to Medicare. The bill also includes:
- Mandates for individuals and employers to purchase coverage (with some exemptions)
- Subsidies to help lower-income individuals purchase insurance
- An expansion of Medicaid eligibility to include individuals and families with incomes of up to 150% of the federal poverty level
- Taxes on the wealthy of 5.4% for individuals who earn more than $500,000 and for couples who earn more than $1 million
- Significant insurance market reforms
- Fees collected from the medical device industry totaling $20 billion
- The House bill does not include the “Cadillac Tax,” a controversial tax on high-end insurance plans. And, House Democrats indicated that party leaders have yet to resolve long-standing disagreements regarding coverage for abortion and illegal immigrants.
This bill is estimated to cost just under $900 billion over the next 10 years. However, the legislation does not address Medicare physician payments and instead moves this portion of the proposal to a separate bill, which is anticipated to increase the U.S. budget deficit by more than $200 billion over 10 years.
Senate and House Propose Lower Medical Device Industry Fees: In the bill originally passed by the Senate Finance Committee, fees collected from the medical device industry would have totaled $40 billion over 10 years. Lawmakers from both the Senate and the House are proposing lower fees. In the emerging Senate legislation, Sen. Reid is expected to adjust the fees to between $15 and $20 billion over 10 years. By comparison, the House version includes a tax that would be imposed at the point of sale, thereby spreading its impact across manufacturers, wholesalers and distributors, and would yield $20 billion between 2013 and 2019.
