| Democratic leaders and Democratic committee chairmen reportedly held a marathon negotiation session Thursday at the White House on sticking points between the House and Senate bills (H.R. 3962, H.R. 3590). They hoped to build on a breakthrough reached earlier on financing of the huge package, so that the proposal can be sent to the Congressional Budget Office (CBO) for analysis of its costs and benefits. It will likely take CBO several days, possibly a week or longer, to produce a cost estimate necessary before a vote.
Labor leaders who spent much of Wednesday at the White House battling to ease the burden of the Senate’s proposed excise tax on high cost employer-provided health insurance plans, announced a deal that they discussed Thursday with House Democrats. The deal, however, appears unlikely to soothe the concerns of House opponents of the excise tax. Under the Senate version of health care reform legislation, the 40% excise tax would be assessed on health plans that cost more than $8,500 for individuals or $23,000 for families. A higher limit of $9,850 for individuals and $26,000 for families would be allowed for retirees over 55 but not yet eligible for Medicare, and for workers in high-risk professions, such as law enforcement, firefighting, and construction. Union leaders and President Obama reportedly agreed on a plan that would bump up the threshold before the 40% tax is imposed to $24,000 for a family—a $1,000 increase from the Senate bill (H.R. 3590)—while excluding vision and dental insurance from being counted toward the threshold beginning in 2015. Individuals would see their thresholds rise $400 (to $8,900) under the compromise. The threshold levels would also be adjusted to account for age, gender, and geographic areas to keep people in high-cost groups from being disproportionately impacted by the tax. The pact would gradually phase in the excise tax for workers subject to collective bargaining agreements. The excise tax would be subject to a transition period for collectively bargained health care plans, as well as health care plans for all state and local government workers. While the excise tax would go into effect in 2013 for most plans, collectively bargained and state and local plans would not be taxed until 2018. These same plans would be allowed to enter into the proposed health care exchanges in 2017. The announced compromise would lower the revenues generated by the high-cost excise tax provision: the Senate bill would generate about $150 billion over 10 years and the compromise would reduce that figure to around $60 billion. Because of this, negotiators are looking for ways to fill the hole with further savings from various health care sectors. Industry lobbyists said pharmaceutical companies could be asked to contribute further savings between $10 billion and $20 billion over 10 years, in addition to the $80 billion they have already committed to providing. The Senate bill would index the threshold to the rate of growth using the consumer price index for all urban consumers plus one percentage point, but opponents have argued that the index would still result in a growing number of middle class households with health insurance that falls into the category of so-called “Cadillac” plans over the next decade. The White House reportedly did agree to allow the thresholds to be adjusted upward, however, if health care inflation is above the assumptions for inflation between 2010 and 2013. That change would keep more households from being affected by the excise tax immediately after the new provisions go into effect. |
| Outstanding areas include whether a final measure will include a national exchange in the House bill or state-based ones in the Senate version; an implementation date of 2013 like the House bill or 2014 in the Senate measure; and how much federal help people will receive to purchase insurance. It is reported that negotiators have yet to discuss federal funding of abortions or immigration issues.
Another pressure on negotiators is Democrats’ desire to get the bill sent to Obama before his still-unscheduled State of the Union address to Congress. The State of the Union had been tentatively set for Tuesday, February 2, but there is speculation now that it might slip to Tuesday, February 9. |
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The very close Massachusetts Senate seat special election this coming Tuesday, January 19, could determine the fate of the current health care reform bills. Republicans are seeking to turn that election into a referendum on the health care legislation.
Republican state Senator Scott Brown’s campaign has surged since the holidays and has unexpectedly turned the special election into a nail-biter against Democratic Attorney General Martha Coakley, pulling the race to an essential “toss up.”
Should Scott Brown prevail, it would reduce the Democrats’ Senate majority to 59, one less than the 60 votes necessary to cut off debate in the Senate.
A victory by Scott Brown could cause the fragile Democratic coalition behind the health care legislation to unravel and put approval of the measure itself in jeopardy. Should he win and take his seat before final consideration of the health legislation, Democrats would be one vote short of the 60 needed to get the bill through the Senate. If Scott Brown is elected, health care reform could still happen if a bill is pushed through before the results of the election are certified, if the House approves the Senate version of the bill without changes or if a Senate Republican could be convinced to vote for health care reform.
