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The Latest News On Healthcare Reform

October 21, 2009

Reform timetable tweaked as Senate begins merging bills

It´s still unclear when health reform legislation might reach the Senate floor, but it´s looking more and more like it might not happen until November.

Senate Majority Leader Harry Reid, D-Nev., Finance Chairman Max Baucus, D-Mont., and Health, Education, Labor and Pensions member Chris Dodd, D-Conn., have been meeting to combine the health reform bills passed by each committee. In doing so, they´ll have to work to keep the support of Sen. Olympia Snowe of Maine, thus far the only Republican to back any of the health reform bills.

They´re also wrestling with thorny issues like whether to include a public plan option to compete with private insurers. During a recent conference call with reporters, Baucus said he doubts a public option could win 60 votes. The Senate Finance bill would create nonprofit health care cooperatives in lieu of a public plan. Senators are also discussing ideas like a "trigger" that would create a public plan if cost-saving goals aren´t met or if a market doesn´t have sufficient competition, and Sen. Thomas Carper, D-Del., has advanced a proposal to let states decide whether to establish a public plan. White House Chief of Staff Rahm Emanuel said the president continues to support a public plan, but "it´s not the defining piece of health care."

On the House side, the Ways and Means Committee kept alive the possibility that Democrats could use the budget reconciliation process to pass reform in the Senate with 51, not 60 votes. Ways and Means recently approved a measure that would clear the way for reconciliation to be used in the Senate, although Democrats are a long way from making any final decisions about whether to go the reconciliation route.

House leaders are also combining health reform bills from several committees. It remains to be seen whether House leaders will wait for the Senate to complete its floor debate before bringing health reform legislation to the House floor.

Insurance industry not backing down over cost predictions

A second report predicts that current health reform proposals will push premiums higher, not lower. The health insurance industry says the most recent report is consistent with its earlier study, which the industry´s trade association continues to defend in the face of attacks from congressional Democrats.

The latest analysis, prepared by consulting firm Oliver Wyman for the Blue Cross Blue Shield Association, found that current health reform bills will cause health care costs to increase far faster and higher than they would under the current system. The report projects a 50 percent hike in individual market premiums and a 19 percent rise in small group premiums over a five-year period.

That dovetails with the findings of a PricewaterhouseCoopers report released last week by America´s Health Insurance Plans (AHIP), which forecasts a 49 percent increase in individual premiums and a 28 percent jump in small group premiums over a 10-year timeframe.

Democrats have assailed the AHIP report as biased and questioned the industry´s motives in releasing it the day before the Senate Finance Committee voted on its reform package. But, Karen Ignagni, president and CEO of AHIP, warned senators on the Health, Education, Labor and Pensions Committee that "potential hyper-inflation" will result if everyone is not required to participate by purchasing health insurance.

"This study confirms that the current legislation will make coverage less affordable for individuals, families and employers, and make it harder to get all Americans covered," said Ignagni in prepared remarks. She added that AHIP only asked PricewaterhouseCoopers to study the legislation in late September, after Senate Finance reduced penalties for those who don´t buy health insurance.

AHIP also sent a letter to Senate leaders outlining recommendations for improving reform legislation and reaffirming the industry´s commitment to enacting bipartisan reform this year. The recommendations include:

  • Pairing market reforms with an effective and well-enforced requirement to obtain coverage;
  • Doing more to control costs, such as "moving away from a fee-for-service system that encourages volume rather than value";
  • And, avoiding new taxes, like a $6.7 billion annual tax on insurers, "that add to the cost of coverage." Read the full letter and an AHIP op-ed from the Washington Post.

Meantime, Democrats attacked the insurance industry, both for the recent reports and for running advertisements critical of current reform proposals. "This is when the insurance companies are really going to start gearing up," President Barack Obama told an audience in New Orleans. "Don´t let them fool you. We´re going to get this done. We´re going to fight for it."

House Speaker Nancy Pelosi, D-Calif., said the insurance industry´s recent actions prove the need for a public plan option to compete with private plans. "Why would you throw (people) into the lion´s den of the insurance industry without the leverage (of a public option)?" Pelosi told CNN. She reportedly wants the House to include a public plan that would pay health care providers 5 percent more than Medicare rates.

And shortly after AHIP released its report, Sen. Charles Schumer, D-N.Y., called for an amendment that would revoke the anti-trust exemption for health insurers that has been in place since 1945. "Providing an exemption for insurance companies to antitrust laws has been anticompetitive and damaging to the American economy," added Senate Majority Leader Harry Reid of Nevada.

New guidance from Medicare: Insurers free to speak out

Health insurers can communicate with Medicare members about pending legislation and other public policy issues, according to new guidance from the agency in charge of Medicare.

The Centers for Medicare and Medicaid Services (CMS) announced its decision late Friday, saying that insurers may lobby customers on political issues as long as long as members opt-in to receive such communications and as long as no federal dollars are used to fund those communications.

CMS also confirmed that it had closed its review of a letter Humana sent to some of its Medicare members about proposed cuts to Medicare Advantage funding. CMS did not impose any penalties on Humana, but did issue a "notice of noncompliance," which the Associated Press described as "a mild reprimand." Read the AP article, Wall Street Journal editorial and New York Times editorial.

Get involved. Contact Congress about health reform at

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