On Saturday December 19th, the Senate approved H.R. 3326, the Defense Department appropriations bill, which had passed the House three days earlier. The measure contains several key health-related provisions, including an extension of the federal subsidy of COBRA and state continuation benefits created last spring by the American Reinvestment and Recovery Act of 2009. The nine-month 65% subsidy of COBRA premiums is for involuntarily terminated workers and their dependents and is generally advanced by the employer, then reimbursed through a federal payroll tax credit. H.R. 3326 would not only extend the length of the subsidy from nine months to 15 months, but it would also extend the last date for eligibility from December 31, 2009 to February 28, 2010.
Republican Senators, who generally do not oppose the content of the defense measure, did seek to delay the progress of H.R. 3326 to delay the progress of the health reform bill. The bill is expected to be signed quickly by President Obama. It is expected that if this extension is enacted, the federal Departments of Labor and Treasury will issue guidance about how to handle the transition of individuals who have gone off the original nine-month subsidy, as well as the newly-eligible populations (those who have a January 1, 2010 or later COBRA eligibility date, thereby rendering them ineligible for the subsidy under current law), in short order. In addition to the COBRA provisions, the defense bill also contained a two-month freeze on Medicare physician payment rates. If enacted, this provision of the bill would prevent a scheduled 21% cut in Medicare provider reimbursement rates from taking place on January 1, 2010.
Also on Saturday, Senate Majority Leader Harry Reid (D-NV) appeared to have gathered the 60 votes he needs to cut off debate on the health care reform bill, while House Democrats are threatening to oppose the legislation in conference committee and key unions and Democratic party leaders are blasting the legislation. The Senate should release a revised version of the bill by Monday and after a series of votes end with a vote to close debate at about 7:00 p.m. on Christmas Eve.
Reid is also experiencing difficulty from key party leaders outside of the Senate. Former Vermont Governor and Democratic National Committee Chair Howard Dean came out in opposition to the Senate bill in a column in the Washington Post on Wednesday because it does not contain enough government intervention. The Service Employees International Union and the AFL-CIO are also publicly attacking the bill, particularly relative to its financing provisions which would levy a 40% excise tax on the highest cost health plans, like those that unions offer to their members. In addition, a number of more liberal House Democrats are voicing their displeasure about the potential compromises being considered by the Senate that they feel water down the bill, and have threatened to derail the legislation should it get to a conference committee.
