Thursday, August 6, 2009


Five congressional committees and their staffs, plus numerous Obama administration officials, have been working on health care reform for more than three months, with no immediate end in sight. Is health care reform legislation getting closer, or is its likelihood actually receding? What’s the state of play?

In the House, three versions of HR 3200, “America’s Affordable Health Choices Act,” have been passed by the three responsible committees (Ways and Means, Education and Labor, and Energy and Commerce). The Energy and Commerce version differs significantly from the other two in several respects following the refusal of Blue Dog Democrats to support the original version: it reduces Medicare payment disparities between urban and rural areas, it modifies the public plan provision to require that payments be negotiated with providers rather than tied to Medicare rates, and it shifts some of the cost of Medicaid expansion to states. Preliminary CBO scoring puts the ten-year federal cost of the various versions of HR 3200 in the $900-$1,100 billion range, with minimal impact on overall national health care cost trends.

The next step, following the August recess, will be for the full House to debate the various versions and then to vote on a single bill. Given that conservative Democrats have insisted on the public plan payment negotiation provision, while liberal Democrats have been equally vehement in condemning the requirement (and no Republican support is expected for any version), the bill’s fate is uncertain. However, since any possible final legislation will also depend on Senate action (and therefore can be blamed on the other chamber), a compromise seems probable.

In the Senate, a draft bill—the Affordable Health Choices Act—has emerged only from the Health, Education, Labor and Pensions Committee. Generally, this bill follows the pattern of HR 3200 (insurance exchanges, insurance reform, individual and employer mandates). The CBO has estimated that the ten-year federal cost of this bill would be some $600 billion, but this number excludes the cost of Medicaid expansion. (Note that the CBO’s ten-year estimates include only about six years of full implementation.)

The Senate Finance Committee is attempting to craft a bill to attract some bipartisan support, with committee negotiators from the two parties continuing to meet. Whether the negotiators will be able to resolve their differences is far from certain, especially with the Republican members of the group coming under fire from their own party for trying to work with the Democratic majority.

With the House already enjoying the August recess and the Senate also closing down for the remainder of the month, what’s likely to happen next?

A lot depends on Senate Finance. A breakthrough in negotiations there would presumably produce a bill that could attract at least the magical sixty votes (despite their nominal sixty members, the critical illnesses of Senators Kennedy and Byrd make it unlikely that Democrats could produce a filibuster-proof majority without some Republican support). In turn, Senate Finance’s actions will influence House members. A bipartisan Senate bill will likely encourage Blue Dog Democrats to push hard for inclusion of its more conservative provisions in the House bill. Alternatively, failure of Senate Finance negotiations may result in a more liberal House bill, since Democrats will see less reason for compromise. Also, without a bipartisan agreement in the Senate, Democrats may be forced to use the reconciliation process in order to sidestep the need for sixty votes.

Assuming that reform bills do reach the point of a vote in each chamber, what are the chances of passage? It looks like a toss-up. On the one hand, Democrats—liberal and conservative—have expended enormous energy in pushing for reform; failure to pass any reform legislation would be a huge defeat for the party, and a threat that might cause even the most doctrinaire members to compromise. On the other hand, momentum has been lost, opponents are energized, the public is confused, and—given the difficulty of making changes to our complex health care system—health care costs will continue to increase and the number of uninsured will continue to rise for some time even after passage of a bill before any improvement becomes apparent. At least some erstwhile supporters of reform may choose to avoid being blamed for voting for something that is going to take even longer than the economic stimulus to produce results.

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