Texas Today

JANUARY 29, 2010

This Week in Health Care Reform

Following the election of Republican Scott Brown to the Massachusetts State Senate last week and the resulting loss of Senate Democrats’ supermajority, lawmakers continue to pave the way for health care reform – with limited progress. In addition, polls indicate that the public would rather lawmakers focus more on the economy than on health care.

State of the Union Address

President Obama Gives State of the Union Address: On Wednesday evening, President Barack Obama delivered his first State of the Union address before a joint session of Congress. Having hoped to have a health care reform bill on his desk prior to his address, the President instead used his speech to encourage Congress to push forward on health care reform. Yet, he did not give specific guidance as to how to proceed with the legislation. Instead, he made it clear that his primary focus would be on jobs and the economy.

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Health Care Reform Negotiations

Democrats Still Seek Way Forward: While vowing not to give up, Democratic Senate leaders indicated Tuesday that they no longer felt pressure to move quickly on health care reform; and, in the wake of the Massachusetts election and in reaction to public opinion, they shifted focus to jobs and the economy. Senate Majority Leader Harry Reid (D-NV) commented that there is “no rush” on health care and said that he and Speaker of the House Nancy Pelosi (D-CA) were working to map out a way to complete health care reform in the coming months. On Wednesday, Sen. Pelosi floated a two-pronged strategy to pass incremental changes now and pursue comprehensive reform later.

Some lawmakers have considered breaking up the legislation into smaller pieces that have bipartisan support. However, this option will prove challenging given the complexities and interdependencies of the measures. For example, lawmakers would like to include a measure that requires all insurance companies to insure those with pre-existing conditions; however, premiums will most likely increase unless there is an individual mandate.

Earlier this week, Democrats appeared to be coalescing around a different strategy through which Senate lawmakers would make changes to their bill to appease members of the House. The Senate would then pass the revised bill via reconciliation, which only requires 51 votes. Following that, the House would approve the revised bill, giving it to President Obama for his review. However, movement on this strategy stalled Tuesday when two centrist Senators, Sens. Evan Bayh (D-IN) and Blanche Lincoln (D-AK), indicated that they would oppose using reconciliation to bypass Republican support. Others, including Sen. Joe Lieberman (I-CT) and Sen. Dianne Feinstein (D-CA), have suggested a “time out” on health care reform until there is a clear path forward.

In the GOP response to President Obama’s State of the Union address, Virginia Governor Robert McDonnell said that Republicans share the Democrats’ desire for health care reform, but do not agree with their proposed solutions. Republicans suggest that Democrats scrap the current proposals and start over with more Republican input on issues such as medical malpractice reform and selling insurance policies across state lines.

Republicans Call for Transparency: On Wednesday, the House Energy and Commerce Committee marked up a resolution presented by Rep. Michael Burgess (R-TX) which requested that the administration divulge documentation regarding the health care reform deals made with trade associations and a labor union. Committee Chairman Henry Waxman (D-CA) said that while details remained to be worked out, he would support a narrowed version of the Republican request for White House records.

President Obama to Speak with House Republicans: President Obama will meet with House Republicans on Friday in response to an invitation to speak at their annual retreat in Baltimore that begins Thursday and ends Saturday. The meeting comes just after the President’s State of the Union address, and members of the news media speculate that the meeting may spur more bipartisanship or potentially lead to even more tension between the two parties.

Interest Groups Call for Reform: With health care reform’s fate in jeopardy, interest groups have voiced their support, encouraging Democrats to push forward with legislation. The AARP, American Cancer Society Cancer Action Network, Consumers Union, Families USA and Service employees International Union sent a joint letter last Thursday urging Congress not to abandon comprehensive health care reform. Further, the United States Conference of Catholic Bishops also sent a letter to Congress urging a push for reform.

Public Opinion

Polls Show Concern with Health Care Reform; More Focus on Jobs and Economy: Several polls were released this week that highlight the public’s disenchantment with health care reform and anxiety around the struggling economy.

A new CNN/Opinion Research poll released Tuesday shows that only three in ten Americans say they want Congress to pass legislation similar to the bills currently being discussed in Congress. Forty-eight percent of Americans would like lawmakers to start again on a new bill, and 21 percent believe Congress should not work on bills that would change the current health care system. Further, a Wall Street Journal/NBC poll released Wednesday found that 51 percent of Americans believe President Obama has paid “too little attention” to the economy and that 44 percent feel he has paid “too much attention” to his proposed health care overall.

In addition, a new USA Today/Gallup poll released late last week finds that most Americans call for a more bipartisan effort in health reform. A 55 percent majority of Americans say that President Obama and Congressional Democrats should suspend movement on health care reform and consider alternatives that would increase Republican support.

A poll released last weekend by the Washington Post , Henry J. Kaiser Family Foundation and Harvard University’s School of Public Health indicated that dissatisfaction with the direction of the country, including the Democrats’ health care reform proposals, drove the outcome of the Massachusetts election. The post-election survey of Massachusetts state voters showed that overall 43 percent say they support the health care reform proposals advanced by President Obama and Congressional Democrats, while 48 percent oppose them.

A new poll released Monday from the Robert Wood Johnson Foundation found that fears regarding the health care reform package increased significantly in December as members of the Senate finalized their bill. Thirty-three percent of respondents said they believed their access to care would worsen if the legislation passed, up from 25 percent in November. Forty-two percent said the country’s finances would suffer under reform, compared with 34.6 percent in November.

Looking Ahead

Next week, the President will present his Budget to Congress (which includes health programs), after which Congressional hearings will commence. We expect health reform to be discussed in these sessions. While there remains no clear path forward for health care reform, Congressional leaders will continue to work to find a solution.

Week of January 25, 2010

The sudden halt to health care reform’s steady march forward came as a shock to many who saw an upset win by Republican Senator-elect Scott Brown in Massachusetts as all but impossible. But if many took delight in the election outcome’s impact on health reform legislation, Aetna Chairman Ronald A. Williams made it clear in a New York Times story last week that the country still needs meaningful health care reform – reform that addresses access as well as affordability. Everyone benefits by health reform that gets at the factors driving soaring health care costs and the loss of coverage for so many Americans. While Congress thinks carefully about its next steps, Aetna will continue to support meaningful health care reform and continue to offer responsible solutions to legislative leaders.

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Federal

The election of Republican Scott Brown as the new senator from Massachusetts has derailed the Congressional health care reform train, less because Brown denies Democrats the 60th filibuster-proof vote, though that is certainly a major result, and more because it collapsed the Democratic political house of cards by highlighting the power of independent voters and the frustrated anti-incumbent mood of the electorate. Whether Democrats can regroup from this wake-up call will consume their leadership from now until the November off-year elections. How Democrats handle, and how Republicans respond to, health care reform in the short term and other key priorities – such as jobs, the economy, energy and security – over the rest of the session will underscore all Congressional decisions from now until the first Tuesday in November. In short, the 2010 elections started in earnest with Brown’s victory.

Once Democrats get past the shock of losing Kennedy’s seat, they will have to grapple with health care reform, one way or the other. The early favorites, including passing the Senate bill “as is” in the House, have been dropped for now as Democrats recognize the political cost of ramming through something unpopular propelled by political muscle only. Passing a smaller, less invasive and mostly Democratic bill has only a slightly better chance, as Republicans are not too likely to “crossover” quite yet. There is a growing interest in using reconciliation (the 51-vote tactic) down the road to pass a Democratic-only bill, once the House and Senate Democratic leadership can agree to a single bill. And, there is the outside chance that Democrats will see the Massachusetts election as an imperative to craft a bipartisan bill with Republicans that can secure 70-plus votes in the Senate. Wednesday’s State of the Union speech, followed by the party issues retreats later in the week, will go a long way toward determining which path will be pursued.

January 27, 2010

This Week in Health Reform–Federal Legislative Overview

House and Senate
Republican Scott Brown’s victory over Massachusetts Attorney General Martha Coakley (D) in the January 19 special election to fill the seat of the late Senator Edward Kennedy (D) is proving to be a game-changer for the health care reform debate. It is now unclear what Democrats can do to pass President Obama’s most important legislative agenda item. Even though the Democrats held a majority in the House and Senate this year, they failed to coalesce around a strategy to pass this legislation. Initially after Brown’s win, there were two options under discussion for moving forward on the current legislation.

1. Have the House take up the Senate-passed bill and use the “reconciliation” bill process to “fix” several of the provisions the House finds unacceptable (e.g., the “Cadillac” tax, etc.). If the House passes the Senate bill, it will go directly to the President for his signature, with no further action needed in the Senate. A “reconciliation” bill, which would need only 51 votes in the Senate, could be passed either in tandem with the Senate bill or follow soon after.
   .
2. Scale back the health care reform bill. A scaled-back bill could include health insurance reforms, exchanges, as well as several other provisions and possibly could attract bipartisan support. While many Democrats are likely to view this approach as a major lost opportunity, leadership may determine this is the most viable approach.

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However, Speaker of the House Nancy Pelosi (D-CA) publicly stated on January 21 that the House does not have the 218 votes needed to pass the Senate version of the health care reform bill, which takes option number one (above) off the table.

While numerous private discussions are reportedly being held on the matter, at the outset it seems that Democrats’ only option for keeping the current legislation alive is to reach across the aisle to their Republican counterparts, most notably, moderate Senator Olympia Snow (R-ME). That would mean a more conservative bill, which could anger rank and file Democrats who are supportive of the legislation.

Although no plans have emerged for how to move forward, it now looks like Democrats will have to modify their plans. On the night of Scott Brown’s win in Massachusetts, Rep. Anthony Weiner (D-NY) – one of the biggest proponents for a single-payer health care system – said: “The only way to go forward is to take a step back. If there isn’t any recognition that we got the message and we are trying to recalibrate and do things differently, we are not only going to risk looking ignorant but arrogant. I don’t think it would be the worst thing to take a step back and say we are going to pivot to do a jobs thing,” and include elements of health care reform in it, he said.

Rep. David Camp (R-MI), Ranking Member on the House Ways and Means Committee, declared Democrats’ health care overhaul legislation “dead” and said that instead of full-scale change Congress should take a “first step toward comprehensive reform” of the nation’s health care system.

Issue Overview: Nebraska Medicaid Deal
While key elements of the health care reform legislation remain in flux, the Congressional Budget Office (CBO) released its cost estimate of the expansion of the State of Nebraska’s Medicaid Deal, negotiated by Senator Ben Nelson (D-NE) who then voted for the Senate’s Patient Protection and Affordable Care Act, HR 3590.

The letter responds to a request from Rep. Paul Ryan (R-WI)), Ranking Member, House Committee on the Budget, asking if the cost estimate of the Senate health reform bill would change if all states received the same level of federal assistance for Medicaid as Nebraska receives under the bill.

The CBO stated on January 21 that the net spending for the Senate legislation would increase by $35 billion over ten years if all states received the same level of assistance as Nebraska.

Under the Senate’s provisions, non-elderly individuals with incomes below 133 percent of the federal poverty level would be eligible for Medicaid beginning in 2014. The federal government would pay the cost of covering newly eligible enrollees through 2016; and federal spending would be about 90 percent by 2019. The Senate legislation states that it would pay all Medicaid expansion costs to Nebraska beginning in 2014.

JANUARY 22, 2010

This Week in Health Care Reform

After months of public debate and private negotiations, health care reform discussions stalled following Tuesday’s Senate vote in Massachusetts. The Democratic Senate lost its 60th vote supermajority when Republican Scott Brown was elected to the United States Senate in the Massachusetts special election.

Health Care Reform Negotiations Post-Massachusetts Special Election

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Massachusetts Election of Senate Republican Recasts Debate: Following the election of Republican Scott Brown to the Massachusetts Senate seat Tuesday night, Democratic leaders have been scrambling to revive what could now be a dying bill. The loss of the Democrat’s 60th vote in the Senate opens up the legislation to a Republican filibuster – something the Democrats have managed to avoid thus far in the debate.

House and Senate Democrats met this week to discuss how to move forward with the reform legislation in light of this election and promised Wednesday that they would push ahead. There are a number of options that Democrats are considering, but at this point they have not charted their course.

On Wednesday, Speaker of the House Nancy Pelosi (D-CA) attempted to rally House Democrats around a strategy to push the Senate bill through the House and onto President Barack Obama’s desk so as to avoid the need to again secure 60 Senate votes. However, the Speaker indicated on Thursday morning that she did not believe she has the needed 218 House votes necessary to move forward. This option would have allowed lawmakersto then propose additional modifications to the approved legislation through a process called “reconciliation,” which only requires 51 votes in the Senate.

Other remaining options:

1.
House and Senate Democrats could also quickly complete the merging of the two bills and vote on the combined package before Mr. Brown is sworn in.
2.
Democratic leaders could attempt to re-engage Sen. Olympia Snowe (R-ME), the only Republican who voted for the Senate Finance Committee’s bill passed in October. Democrats would need to allow her to amend the bill so that she could support its passage and give Democrats the needed 60th vote; or,
3. House and Senate Democrats could essentially start over in their respective chambers and propose scaled-back versions of the bill under “reconciliation” procedures or regular order. Reconciliation procedures would greatly limit the scope of the legislation to issues only related to raising or spending federal funds; therefore, many provisions, such as creating new insurance exchanges and an individual mandate, might be excluded.

President Obama seemed to indicate that he favors having House and Senate lawmakers start over again and produce a scaled-back bill. In addition, more moderate Senate Democrats – hesitant to push through such a huge partisan bill in light of the Massachusetts election – urged leaders to slow down.
Sen. Jim Webb (D-VA) has called on Senate leaders to suspend voting on health care reform until Mr. Brown is sworn into office. President Obama and Senate Majority Leader Harry Reid (D-NV) have iterated this same message. Further, Sen. Joe Lieberman (D-CT) called for a bipartisan effort as the best way to achieve health care reform legislation.

Health Care Reform Negotiations Prior to Massachusetts Special Election

Senators Urge Guarantee of Government Savings: In a letter sent last Thursday to Sen. Reid, five Democratic Senators asked for the inclusion of a “fail-safe mechanism” in the final bill. This mechanism would give Congress “the tools to keep costs under control should the current savings estimates fail to materialize.”

Both the Senate and House versions of the bill rely heavily on reductions in government spending, particularly around Medicare, to help pay for reform. Republicans and some nonpartisan analysts believe the government will not follow through on these spending reductions, which will lead to soaring costs.

President Obama Pushes for Less Protection for Biologic Drugs: Last Thursday President Obama pushed for a change in the health care reform legislation that would reduce the number of years that biologic drugs were patent protected from generic competition, previously set at 12 years. White House officials and Rep. Henry Waxman (D-CA) were negotiating for 10 years protection or less.

Members of the news media speculated that the move to reduce biologic drug protections could be a leverage point for President Obama to pressure the drug industry to increase contributions to pay for health care reform. In fact, the Wall Street Journal reported that Congressional Democrats had already asked drug companies to contribute an additional $10 billion or more, over and above the $80 billion which the industry agreed to early on in the reform negotiations.

President Obama Strikes Deal with Unions: Last week Democratic negotiators struck a deal with union officials and conceded to union demands to scale back a tax on high-end insurance plans. The deal would exempt union workers from having to pay the tax until 2018, five years after the tax would apply to other workers. While the deal would help gain union support for the bill, it would also reduce the amount of tax revenue generated by about 40 percent, to $90 billion. As such, Democratic leaders would need to find other sources of revenue to make up the difference.

Public Opinion

Exit Poll Indicates Health Care Reform as Hot Button Issue: As the ballot polls closed on Tuesday night’s Massachusetts Senate election, an exit poll conducted by Frabrizio, McLaughlin & Associates indicated that 52 percent of voters said that they oppose the federal health care reform measure and 42 percent said they cast their ballot to help stop President Obama from passing this legislation. In addition, 48 percent said that health care was the single issue driving their vote.

Polls Show Discontent: The latest Wall Street Journal/NBC News poll indicated that almost half of Americans believe the health care reform bill in Congress is a bad idea (46 percent). This figure is up dramatically from April when only 26 percent believed the plan was a bad idea. Further, just 33 percent say the plan is a good idea. Nearly half of those surveyed (48 percent) believe that passing the current legislation would be a “step backward.”

In addition, a new Quinnipiac University poll showed that public support for health care reform continues to decline. Thirty-four percent mostly approve, while 54 percent mostly disapprove. At the end of December, 53 percent of Americans mostly approved, while 36 mostly disapproved.

Looking Ahead

Currently, the path to health care reform is unclear. Democrats seek a way to secure the necessary votes to pass the legislation, and some now question the value of pushing such a large bill. President Obama had hoped to see a final bill prior to his State of the Union address, which has been scheduled for January 27; however, it appears this goal is likely out of reach.

This Week in Health Reform

Republican Scott Brown’s victory over Massachusetts Attorney General Martha Coakley (D) in the January 19 special election to fill the seat of the late Senator Edward Kennedy (D) might prove to be a game-changer for the health care reform debate. The loss of the 60th Democratic vote now robs Senate Democrats of a filibuster-proof majority. Last week, Democrats were rushing to wrap up a House/Senate agreement on the bill, likely due to reports that Coakley’s lead had diminished.

Congressional leaders are still aiming to have the controversial points in the health care reform bill settled as soon as possible, so they can send the compromised bill to the Congressional Budget Office (CBO) for scoring. The CBO will then need 12 days to analyze the legislation.

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In addition to Senate Majority Leader Harry Reid (D-NV) and Speaker of the House, Nancy Pelosi (D-CA), lawmakers participating in the White House meetings include: House Majority Leader Steny Hoyer (D-MD), House Majority Whip James Clyburn (D-SC), House Energy and Commerce Committee Chairman Henry Waxman (D-CA), House Ways and Means Committee Chairman Charlie Rangel (D-NY), House Education and Labor Committee Chairman George Miller (D-CA), Assistant Senate Majority Leader Richard Durbin (D-IL), Senate Finance Committee Chairman Max Baucus (D-MT), Senate HELP Committee Chairman Tom Harkin (D-IA), and Senate Banking Committee Chairman Christopher Dodd (D-CT).

A main point of contention between the two houses of Congress pertained to the
40 percent excise tax on high-cost health insurance plans passed by the Senate. Since many labor union members would be affected by the tax on high-cost health insurance plans, the House of Representatives was not supportive of this provision in the Senate bill. Union leaders have also been included in key negotiations on this provision, and on January 14, signaled that they are ready to support the merged legislation with the compromised provision.

The main revenue source for the Senate’s health care reform bill (H.R. 3590) would be from an excise tax – beginning in 2013 – on employer-provided, high-cost health insurance plans costing more than $8,500 for individuals and $23,000 for a family. The reported compromise on the legislation now makes the tax kick-in on policies costing $8,900 for individuals and $24,000 for families. The tax threshold would still rise at inflation plus one percentage point, as is currently written in the Senate bill. Additionally, dental and vision benefits would be removed from the calculation of threshold costs, and plans offered by state and local governments, as well as plans covered by collective bargaining agreements, would be exempted from the excise tax until 2018. This would allow current agreements to expire and allow for negotiation of new contracts.

In an effort to make up the lack of revenue from the modification of the excise tax provision, leadership will have to come up with new funding to finance the merged bill. Some reports have mentioned that the pharmaceutical industry has agreed to provide more money than the $80 billion they have already negotiated with the White House. Medical device companies could also face additional fees. Portions of the main revenue source in the House bill – a Medicare payroll tax on wealthy U.S. residents – could be added as well.

On January 14, Richard Trumpka, president of the AFL-CIO, said, “Union leaders approached negotiations with the White House and congressional leaders with one overriding goal in mind – getting a bill signed into law.” Gerald McEntee, president of the American Federation of State, County and Municipal Employees (AFSCME), said, “We do like the way it’s shaping up, but it’s still not finished. We’ve got to see a final product.”

There also has been significant discussion – but no resolution so far – about the question of whether to establish a single national health insurance exchange or allow each state to operate its own exchange. Blue Cross and Blue Shield of Texas continues to support a state-based approach to exchanges.

January 13, 2010

This Week in Health Reform

House and Senate
The Senate passed its health care reform legislation, the Patient Protection and Affordable Care Act of 2009 (H.R. 3590) on December 24, 2009. With both pieces of legislation now passed – the House legislation, the Affordable Health Care for America Act (H.R 3962), was passed on November 7, 2009 – House and Senate leadership must now reconcile the differences. Instead of moving into the conference committee to reconcile the bills, Democratic leadership has agreed to implement a “ping-pong” approach where the House will take up the Senate bill, amend it, and then send it back to the Senate for approval. Reiterating his commitment to signing health care reform legislation by the State of the Union address (the date of the Address has not been confirmed yet), President Obama has met with key Democrats multiple times during the last week and is supportive of this approach, which is said to be an easier procedural tactic and will take less time.

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Senate Majority Leader Harry Reid (D-NV) still has the challenge of maintaining the Democrats’ 60-vote majority for two procedural votes in the Senate. This first is a vote on a motion to proceed to debate the legislation and the second is a vote on cloture that will allow Senators to proceed to the vote itself. The final vote on the full legislation will only need 51 votes. Speaker Nancy Pelosi (D-CA) needs 218 votes in the House of Representatives.

While the “ping-pong” approach may seem easier than holding a formal conference committee, there are still numerous provisions in the Senate bill that might prove to be contentious issues for Democrats trying to marry the two pieces of legislation. One main priority is the way both bills are financed. The House Democrats prefer a tax on the wealthiest U.S. residents, while Senate Democrats want to tax high-cost “Cadillac” health insurance plans. It is suggested that a hybrid of the two is most likely to appease both groups. Among other provisions, many House Democrats are not supportive of either bill’s language on abortion, stating that they have a coalition of 41 members who will vote against the legislation if the abortion provisions are not amended. Other differences include national exchanges proposed in the House, while the Senate would like to see state-based exchanges; higher subsidies for the lowest-income Americans and an expansion of Medicaid in the House legislation.

The full Senate remains on recess until January 19.

Overview: NAIC Writes Speaker Pelosi and Majority Leader Reid
On January 6, The National Association of Insurance Commissioners (NAIC) wrote House Speaker Nancy Pelosi (D-CA) and Majority Leader Harry Reid (D-NV) to provide their input as the House and Senate begin to reconcile the differences in their prospective health care reform bills.

In its letter, the NAIC highlights important points about the need for a strong individual mandate, the implications of health care reform in non-guarantee issue states, concern over Federal rate approval processes and minimum loss ratios (MLR) at 80 percent for the individual market, as well as comments about the importance of Congress focusing on proposed effective dates for numerous insurance market reforms. Other issues discussed include high-risk pools and new vouchers programs.

JANUARY 8, 2010

This Week in Health Care Reform

While still technically in recess, members of Congress trickled back to Washington, D.C. this week to get a jump start on reconciling the health care reform bills passed by the House and Senate last year.

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On Tuesday, Democratic leaders began conversations around a final package, pledging to overcome differences and aiming to have a bill passed by the President Barack Obama’s State of the Union Address, anticipated in early February. Members of the news media, however, have highlighted the difficult negotiations ahead, given some major differences in the proposed packages and the time pressure being imposed by President Obama.

We continue to encourage you and others to engage members of Congress during this debate by visiting the Health Action Network.

Health Reform Negotiations

Senate Passes Reform Bill: At 7:05 a.m. on Christmas Eve, Senate Majority Leader Harry Reid (D-NV), along with 59 other Senate members, voted to pass reform legislation that, according to the Congressional Budget Office (CBO), would expand health coverage to approximately 31 million people at a cost of $871 billion over 10 years. The bill passed on party lines (60-39), without a single Republican vote in favor. Republicans believe the bill would impose many regulatory and financial burdens on taxpayers and businesses while increasing government debt.

Reconciliation Poses Difficult Road Ahead: Before lawmakers can present a final health care reform bill to President Obama, the approved Senate bill needs to be merged with the House version passed in November 2009, which extends coverage to 36 million Americans at a cost of about $1 trillion. However, the bills have some major differences that will need to be addressed as lawmakers shape the final package, including:

* Insurance market reform and exchanges – Both bills would bar insurers from denying coverage to those with pre-existing conditions and from dropping coverage for those who get sick. Both would also create insurance exchanges through which small businesses and individuals could shop for insurance. The Senate bill would create state-based exchanges, however, whereas the House bill would create a national exchange with an option for states to run state-based programs if they meet certain requirements.
* The government-run plan – A government-run plan was a central component to the House bill. The Senate bill would instead direct the U.S. Office of Personnel Management to contract with private insurance companies to offer policies on the exchanges. Despite much commotion over the need to include the public option, House leaders conceded Tuesday that they may be willing to agree to a bill without a public option if other parts of the bill fulfill the same goals, with the hope of expanding available subsidies.
* Reform financing – Members of the House would pay for the reform effort – which carries a price tag of about $1 trillion – through a 5.4 percent surtax on individuals making more than $500,000 a year and couples making more than $1 million and by imposing a 2.5 percent excise tax on medical devices. Members of the Senate, on the other hand, plan to pay for their $871 billion plan through several measures:

- a 40 percent excise tax on high-cost health insurance plans;
- an increase in payroll taxes for Medicare on individuals making more than $200,000 a year and couples making more than $250,000 per year;
- fees on insurers, medical device manufacturers and drug companies;
- and, a 10 percent tax on indoor tanning salons.

On Wednesday, President Obama expressed his preference for the insurance tax contained in the Senate bill, but the excise tax is strongly opposed by labor unions.

* Coverage Mandates – Both bills require that individuals obtain health insurance and impose a penalty on those who do not. The House bill also includes an employer mandate for companies with payrolls above $750,000. The Senate bill does not include this mandate but would require companies with more than 50 employees to pay a fine if employees obtain federally subsidized coverage on the insurance exchange.
* Medicaid expansion – Both bills expand Medicaid. The Senate bill makes Medicaid available to those with incomes up to 133 percent of the poverty level, whereas the House allows for coverage for those with incomes up to 150 percent of the poverty level.
* Abortion – While both bills bar the use of federal funds for abortions, the House bill includes stricter language requiring anyone seeking abortion coverage to buy separate insurance riders. The Senate bill would let the states choose whether or not to include plans with abortion coverage in the insurance exchange and would require those with abortion coverage to write a separate check for this insurance.

President Obama Pushes Swift Action: In a meeting at the White House Tuesday, President Obama encouraged House Speaker Nancy Pelosi (D-CA) and House Majority Leader Steny Hoyer (D-MD), as well as Senate Majority Leader Harry Reid and Sen. Dick Durbin (D-IL), who participated via phone, to bypass the traditional conference committee used to negotiate reconciliation, in the interest of time. The move, which creates a three-way negotiating construct involving top Democrats in the House and Senate and the White House, will exclude Republican lawmakers from the debate and reduce their ability to delay the voting.

Further, President Obama indicated that he would be taking a hands-on approach to the final stages of the negotiations. The President held another meeting with leading Democrats on Wednesday to help iron out differences between the House and Senate bills. Democrats also held a noon meeting and conference call on Thursday to discuss how reconciliation will proceed and some of the priorities for the final bill.

Additional Activities

C-SPAN Calls for Transparency: Noting that President Obama mentioned several times during his campaign that health care negotiations would be transparent and broadcasted on C-SPAN, Brian Lamb, C-SPAN CEO, sent a letter to House and Senate leaders on December 30 asking for negotiations to be opened up for public viewing. Republicans pointed out that the most critical discussions on health reform have taken place behind closed doors so far. Top House Democrats deflected the C-SPAN request, saying the process has been highly transparent through more than 100 public hearings held by the House. They pledged to make the final stages transparent in part via the Internet.

Opponents Question Constitutionality: On Wednesday, December 30, Republican attorneys general in 13 states – including Colorado, Florida, Idaho, Michigan and Virginia – sent a letter to Sens. Nancy Pelosi and Harry Reid stating that Congressional leaders must remove the amendment exempting Nebraska from having to pay for the state’s Medicaid expansion. The prosecutors are calling the deal unconstitutional and threatened legal action. Members of the news media report that South Carolina Attorney General Henry McMaster and Oklahoma top prosecutor Drew Edmondson are asking attorneys general across the country to call on Sens. Pelosi and Reid to remove the provision.

In addition, a contingency of legal scholars as well as many Republican lawmakers are calling the measures passed by both the House and the Senate unconstitutional , primarily due to the inclusion of an individual mandate. “In the history of this country, the federal government has never required every American to enter into a contract with a private company,” said Randy Barnett, a professor of constitutional law at Georgetown University Law Center.

Looking Ahead

Formal sessions in Congress are scheduled to begin January 19, 2010. Sen. Pelosi, however, plans to continue to work with key committee chairs and other Democratic leaders prior to the official sessions..