Healthcare reform took a step toward reality last week after days of haggling over its mounting expected cost. Members of the Senate Finance Committee reached a breakthrough just before they recessed for one week ahead of the July Fourth holiday that trimmed the cost in their version to less than $1 trillion over 10 years.
Fiscal breakthrough ...
Reform proposal trimmed to $1 trillion in Senate
On June 25, committee Chairman Max Baucus (D-Mont.) said that the Congressional Budget Office had OKd a range of provisions that collectively would allow the bill to come in on budgetary target while also being fully paid for. The CBO also said that if implemented, the options would expand health insurance coverage to 97% of Americans.
For Baucus and a handful of Democrats and Republicans, it was a pivotal moment. The CBO scores were very encouraging, he said, of the offices cost estimates.
To be sure, a bill has yet to emerge from the committee and gaps in agreement still exist. Its unlikely one will be put forward this week, with members of Congress heading to their home districts for the Independence Day holiday.
Though changing almost daily, the process so far has been lauded by at least one health policy veteran. Its leagues ahead of anything I have been a part of before, said Edward Howard, executive vice president of the Alliance for Health Reform. But that doesnt mean its going to come out all right.
Baucus has been cagey on offering a timeline, saying only that a bill will be approved when its ready.
Meanwhile, the Senate Health, Education, Labor and Pensions Committee stumbled in its efforts to craft a healthcare reform bill, reducing its influence on the process even more (See story below).
The Senate Finance Committee announcement capped a frantic week in which members of the pivotal committee sliced and diced through a number of measures in an effort to trim about $600 billion from a preliminary price range that had reached $1.6 trillion.
For the most part, they found those savings in reductions to government subsidies and tweaks to an employer mandate.
What the lawmakers now have, they say, is a list of several options that could make their way into legislation. Though they were hesitant to offer specifics, some details have emerged.
For starters, the bill will likely include a requirement for individuals to hold some level of health insurance, either offered from their employer or in an exchange, roughly an open market for coverage.
A co-op style health insurance plan to compete against private insurers will likely also be part of a bill.
Senate Budget Committee Chairman Kent Conrad (D-N.D.) hinted that the amount of federal subsidies used to move individuals and families into an affordable health plan would stay around 300% of the federal poverty level, or about $66,000 for a family of four.
There are other subsidies in this package, Conrad said when asked if the federal level would be further tweaked. At one point, the subsidy level was said to have been set at 400% of the federal poverty level. There are other places where there are subsidies in this package that could be lowered to get you to $1 trillion.
Another provision would put a ceiling on the current exclusion from taxable income of employer-sponsored health benefits.
Depending on how it is structured, such a cap could return billions of dollars to government coffers while giving workers stronger incentives to seek lower cost health insurance plans, the CBO has stated.
Still another provision is aimed at ensuring that employers play a role too. Under the so-called free rider approach, employers wouldnt be required to pay a new tax if they dont offer health coverage, but would have to pay some amount if their employees receive Medicaid or a tax credit in a health insurance exchange. An exception for small business is now being hashed out.
Its a very complex calculus, Baucus said. If theres not some requirement for employers, youll see a drifting of people to the exchange and the government subsidies that will increase costs.
But some Republican members remained unswayed by the preliminary CBO numbers. Sen. Orrin Hatch of Utah, a senior Republican on the Finance Committee, cautioned that the numbers could be premature and would likely change.
We have not seen language in any way, shape or form, he said. You cant really make decisions until youve seen the language and seen the scoring.
Overall, though, the Alliances Howard called the finance committees effort to bring Democrats and Republicans together tactically sound. Comparing it with the ill-fated effort in the early 1990s, Howard said so far its the difference between 1,380 pages and 253 words.
The Clinton plan, he said, topped 1,380 pages while President Barack Obamas stated health reform principles ran only 253 words.
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