Current Legislation

I. Health Reform:
CongressOn October 13, the Senate Finance Committee passed Sen. Max Baucus’ (D-MT) “America’s Healthy Future Act” (S. 1796) on a largely party-line vote of 14-9, with Senator Olympia Snowe of Maine representing the only Republican to vote in favor of the legislation. The leading Senate reform effort weighs in at over 1,500 pages, will cost $829 billion over the next decade and includes the following notable features:
· Increases the number of legal residents with insurance coverage from the current 83 percent to about 94 percent
· Subsidizes the purchase of health insurance for families and individuals with incomes between 133 percent and 400 percent of the federal poverty level
· Imposes a 40% tax on “Cadillac” employer-sponsored health plans—those costing more than $8,000 annually for individuals and $21,000 for families
· Does not contain a public option provision

While the current rendition of the bill does not contain language calling for a “public option,” Sen. Baucus has not ruled out the possibility of incorporating such a provision into the bill before it is brought to a floor vote.

Last week, Sen. Debbie Ann Stabenow (D-MI) introduced the "Medicare Physicians Fairness Act of 2009" (S. 1776) in order to address Medicare physician reimbursement shortfalls (including a 21% reduction looming this year). Current physician underpayments are attributable to a 1997 amendment that established a complex Medicare payment formulary based on anticipated future growth in costs. Unfortunately, this formulary has not kept pace with doctors’ costs. Senate leadership announced that the bill will eliminate the Sustainable Growth Rate (SGR) and lay the foundation for establishing a new Medicare physician payment update system through health system reform or other legislation. The bill could reach the Senate floor for a vote as early as this week.

Reform efforts on the House side have been slower. Most recently, house leaders held several meetings with rank-and-file members on key issues that need to be resolved before three separate versions of H.R. 3200, the “America’s Affordable Health Choices Act,” can be merged into a single bill for consideration on the House floor. One of the more contentious issues yet to be resolved pertains to the structure of a government-run plan provision (aka “public option”)– based on either Medicare rates or negotiated rates—and whether or not such a provision should contain a “trigger” clause (if the current reform package fails to achieve cost-saving and coverage goals within a certain time frame, this clause would allow Congress and/or the President to introduce amendments that better achieve those goals). At least one additional meeting of the full Democratic Caucus is expected this week before a merged bill is finalized and sent to the Congressional Budget Office (CBO) for scoring.

According to House Majority Leader Steny Hoyer (D-MD), the House floor debate on health reform will begin no earlier than the week of October 26th. Hoyer said that House members would be given 72 hours to review any proposal before it goes to the floor. In keeping with President Obama’s desire to sign reform legislation no later than December 2009, Hoyer also stated that he will do everything possible to ensure that Congress finishes its work by the second week of December.

A side-by-side comparison of the America’s Healthy Future Act and leading House proposals can be found at http://www.kff.org/.

II. Health Reform: Policy Analysis
On October 7, the Congressional Budget Office (CBO) issued its preliminary analysis of the “America’s Healthy Future Act,” as amended by the Senate Finance Committee during its recent markup. CBO estimates that under this bill, the percentage of legal non-elderly residents covered by health insurance would increase from the current 83 percent to about 94 percent by the year 2019. CBO further estimates that the bill’s coverage provisions would cost $829 billion over ten years. This includes $345 billion in increased spending in Medicaid and the Children’s Health Insurance Program (CHIP), $461 billion for premium subsidies provided through the proposed health insurance exchanges and related spending, and $23 billion for small employer tax credits.

These costs would be offset by increased tax revenues and spending cuts in other areas, resulting in a net reduction in the federal budget deficit of approximately $81 billion over ten years. The bill’s offsets include: $201 billion from the high-cost health plan tax; $117 billion from changes to Medicare Advantage payments; $106 billion from changes to Medicare hospital payments; $23 billion from penalty payments by employers; and $4 billion from penalty payments by individuals.

In stark contrast to the CBO report, America’s Health Insurance Plans (AHIP)—the lobbying organization representing private health insurers—released a PricewaterhouseCoopers analysis of America’s Healthy Future Act forecasting significant premium increases resulting from the current Senate proposal. The report predicts private insurance premium increases of 40 percent between 2009 and 2013 and 73 percent between now and 2016 (compared to increases of 26 percent (2009-2013) and 50 percent (2009-2016) if health care spending trends remain unchanged). The report attributes these increases to four provisions within the Senate bill: 1) requirements on carriers to sell coverage coupled with “weak coverage requirements” on consumers along with rating reforms, 2) taxes on so-called “Cadillac” plans, 3) cost-shifting resulting from $400 billion in cuts to Medicare, and 4) taxes on insurance companies, medical device manufacturers and other health care sectors. The report can be found at http://tennessee.watchdog.org/files/2009/10/Health-Insurance-Industry-Report-on-Reform-Bill.pdf.

III: Just for Fun
On October 6, Rep. Allyson Schwartz (D-Pa.) and Rep. Patrick Tiberi (R-Ohio) established the Congressional Academic Medicine Caucus in the House of Representatives. The new caucus, a bipartisan group of congressional members dedicated to maintaining and strengthening the nation's medical schools and teaching hospitals, “will strive to educate other members on the unique health care, research, and training missions of teaching hospitals and medical schools."


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--OSR Legislative Affairs Committee
David Friedlander, Southern Regionmailto:Regiondavid.f.friedlander@vanderbilt.edu
Amanda Mure, Central Regionmailto:Regionamanda.mure@utoledo.edu
Ryan Padrez, Western Regionmailto:Regionryan.padrez@ucsf.edu
Matt Reilley, Northeast Regionmailto:Regionreimat@gmail.com
Bryan Harris, National Delegatebryan.d.harris@gmail.com