Harry_ReidOn Saturday night Harry Reid, President Obama and the prospects for health reform got a big boost when the entire Democratic caucus in the Senate voted to begin debate. The vote reflected more than an agreement to get on with the business at hand. The bill that Majority Leader Reid released last week actually has more support in the Senate than either its HELP or Finance committee predecessors. Reid, cast in the role of King Solomon, worked on a number of contentious issues within the caucus. Reid’s bill addressed a number of priorities for the liberal wing of the party, including:

  • Covering more people than Senate Finance
  • Reducing the excise tax on high cost health plans
  • Retaining a public option
  • Generally improving affordability protections relative to the SFC proposal (with a notable exception for those with income between 133-150 percent FPL [see our House and Senate Affordability comparison chart])
At the same time, Reid tried to reflect goals of the conservatives, including:
  • Retaining the excise tax over the objections of most liberals and labor unions
  • Retaining most of the cost-containment provisions from the Finance Committee
  • Reducing the federal deficit over both a 10- and 20-year time horizon
  • Holding spending under $900 billion
[For more details on the Senate bill check out these materials from CC: Statement on the Reid bill; Summary of bill; Affordability basics: How to Merge the House and Senate bills]

The challenge going forward will be to maintain, and perhaps expand, that 60 vote margin for final passage. Despite the Majority Leader’s tightrope walk, several issues will certainly be revisited before the debate is finished. Two of the most difficult will be:

The Public option: Several Senators, most clearly Lieberman and Lincoln, have said they won’t vote for the plan if the public option remains as is; others have suggested they have compromised as far as they are willing to, while Sen. Burris (D-IL) has already said he won’t vote for plan because it compromises too much. (Some of those expressing reservations from either the left or the right may vote for the critical procedural votes even if they don’t embrace the final bill, but Reid cannot afford to lose a single Democrat unless he gains offsetting report from Republicans, who so far have been unanimous in their opposition.)

Abortion: So far, pro-choice Senators are able to live with the language. However, several Senators on the other side, as well as the Catholic Bishops have expressed opposition. Language mirroring the Stupak provision in the House is unlikely to attract 60 votes in the Senate, but if pro-choice and anti-choice Senators cannot find an acceptable compromise, the result could be stalemate.

Checking in on the interest groups

Last week we took a look at some of the emerging issues that have to be resolved before passage of a health care overhaul. This week, we look at how some of the key interest groups are positioning themselves.

Doctors: Where’s my fix? From the very beginning of the debate, the number one issue for organized medicine has been enacting a permanent fix to the Medicare reimbursement formula that causes physician rates to decline every year. Due to its price tag, $200 billion over 10 years, the measure has been split off from the larger reform legislation and passed the House last week. In order to secure support from deficit hawks for the fix without any revenue or cost savings offsets, the House attached the physician payment reform to a bill that would create a statutory “PAYGO” (“Pay As You Go”) requirement going forward. (Currently, PAYGO is often invoked as part of the rules governing the budget, but it is not a law.)

However, support for both the PAYGO bill and the physician payment fix is shaky in the Senate. The Senate rejected an unfunded physician payment reform measure just a month ago, and seems unlikely to revisit it, casting the fate of the payment fix into doubt. It’s unclear if this will cause physicians (or at least the AMA) to reconsider its support for reform.

Insurers: True to form Although they stand to gain millions of new customers, and the prospect of competing with a public insurer has been greatly attenuated, insurers remain locked in an opposition stance. Apparently, nothing short of full eradication of the public option will satisfy the industry.

In addition, insurers continue to object to provisions that would limit their ability to discriminate based on age, and would reduce overpayments to Medicare Advantage plans.

And while adamant that everyone be mandated to purchase coverage, insurers have been completely silent about the adequacy of subsidies to make this requirement practical. What can you say? At least they‘re consistent.

PhRMA tries to pull a fast one (and gets away with it?) Although they have touted their financial contribution to making reform more affordable, there may be less to PhRMA’s effort than meets the eye (or the wallet). According to a new analysis, drug makers have raised their prices far in excess of inflation this year—a move that many perceive to be an attempt to recoup a significant part of what they proposed to contribute to reform—sort of like a department store that raises prices just before announcing a sale.

The industry’s actions have provoked outrage among some consumer groups and legislators, but as one of the most vocal supporters of reform (and one of the industry groups most willing to put its money behind the reform effort with ad dollars), PhRMA and associated industries have won themselves a certain amount of goodwill in the Capitol, and it’s unclear to what extent lawmakers are willing to risk putting the drug makers’ mammoth war chest to work for the opposition by requiring a more substantial financial contribution.

Employers to Obama: Just kidding! Last week the Business Round Table released a paper that suggested that they  could get behind “the right kind of reform”—the kind that makes steps to “bend the cost curve.” The BRT statement raised hopes that a major employer organization would get on board health reform, giving it a much-needed boost with business-friendly conservative Dems in the Senate.

This week, despite conclusions by analysts, including a McKinsey report and MIT economist Jonathan Gruber, that Reid’s legislation includes exactly the kind of changes the business group was calling for, the Roundtable has moved more firmly into the opposition camp.

The general public: Paying for keeps

Polls have consistently shown that the public is more likely to support reform if a requirement to purchase insurance is coupled with subsidies that make reform affordable. A poll released last week by the Center for Children and Families provides new data on what the public considers affordable, confirming that, at least with respect to low-income people, the House gets affordability more nearly right than the Senate. The CCF poll also shows that the public is more interested in whether reform lowers their premiums and out-of-pocket costs than they are about the overall price tag of the bill, or whether it adds to the federal deficit.

A lot of effort has gone into reassuring the public that if they like what they have, they get to keep it. But it appears that if anything, the public is concerned that if they don’t like what they have—or what they pay— reform will not do enough to help them.

But more effort should go into getting this story to the public: Both the House and Senate legislation have provisions to make care more affordable for the average person. In the short run, these include a requirement that at least 85 cents of every premium dollar goes to pay for medical care, rules that insurers must justify their rate increases, and provisions limiting out-of-pocket costs and eliminating lifetime caps. In the middle term, the “hidden tax” added to private insurance premiums that pays for uncompensated care should decline. In the long run, measures to reduce the growth rate of health care spending and improve the quality and efficiency of medical care should reduce private- as well as public- sector spending.

These provisions are not widely-known or well-understood. In fact, a slight majority expects that their own premiums will go up as a result of reform.

Most people also expect reform to kick in much faster than it will. Driven largely by cost considerations, full implementation is delayed until 2013 in the House and 2014 in the Senate.

Read Community Catalyst’ s summary of the Senate health reform bill here, and be sure to subscribe to the Health Policy Hub by email.

–Michael Miller, Director of Strategic Policy

photo: House education and labor committee at Creative Commons