WHOLESALE DISTRIBUTION BEST PRACTICES

Leading wholesaler-distributors depend on NAW Institute for Distribution Excellence groundbreaking research studies because they help solve real-world business challenges.

 

YOUR 5-YEAR GROWTH ROADMAP


 

Order copies of Facing the Forces of Change®: Navigating the Seas of Disruption for everyone on your team!

 

NAW News

Health Care Reform

updated February 2010
Legislative Issue Update - January 2010

 As the 111th Congress has evolved, comprehensive health care reform emerged as President Obama’s principal domestic policy objective. Strangely, unlike the health care reform initiative undertaken in the early months of the Clinton presidency, Capitol Hill has been the focal point of the reform effort and in other than very general conceptual terms the Obama Administration has had very little to do with the development of the details of legislation that has emerged from the process to date.

The processes by which the House produced its bill (H.R. 3962, “Affordable Health Care for America Act”) and the Senate its version (H.R. 3590, “Patient Protection and Affordable Care Act”) were at one and the same time quite similar and quite different. The similarity: the process by which Senate Majority Leader Harry Reid (D-NV) “merged” into a single bill the different measures produced by the Health, Education, Labor, and Pensions (HELP) Committee and the Finance Committee, and that used by Speaker Nancy Pelosi (D-CA-8) to “merge” into a single bill the separate bills produced by the Education & Labor, Commerce, and Ways & Means Committees, were stridently partisan, devoid of input from the employer community (collectively the largest private purchaser of health insurance coverage) and conducted behind closed doors. The same can be said of the earlier work of the three committees in the House of Representatives in putting together their respective legislative work products. Not surprisingly, none of the three House committee bills won a single Republican vote at markup.

The difference: in year-long processes led by the late Sen. Edward M. Kennedy (D-MA), then the Chairman of the Senate HELP Committee and Sen. Max Baucus (D-MT), Chairman of the Senate Finance Committee, there were bipartisan exchanges of ideas, and input was provided by a wide range of stakeholders, the employer community included. Regrettably, this apparently cosmetic “attempt” at bipartisanship unraveled as decisions on content were made; the HELP Committee bill was unable to secure the support of a single member of the committee’s Republican minority, and the Finance bill won just one GOP vote (that of Maine Sen. Olympia Snowe) at markup.

On November 7, 2009, the House of Representatives passed H.R. 3962 by a vote of 220-215, with 39 Democrats joining 176 Republicans in voting “no”. Just one GOP Member joined 219 Democrats in voting for the measure. The Senate followed suit on Christmas Eve, voting 60-39 along strictly partisan lines (one Republican Senator was absent) to pass H.R. 3590 after voting the previous day along strictly partisan lines to shut off debate on the bill, and on four previous votes (also along partisan lines) to shut off debate and then approve two comprehensive amendments, one just two days following its introduction.

The House-passed and Senate-passed bills are quite similar in the approach they take to health insurance reform. For example:

  • Both extend health insurance coverage to approximately 30 million people who otherwise would not have it, principally by expanding the Medicaid program.
  • Both will raise national health expenditures (NHE) relative to current law and increase the share of gross domestic product (GDP) consumed by NHE.
  • Both will increase the federal government’s spending on health care relative to current law.
  • Both impose new mandates and penalties for a failure to meet them on employers.
  • Both raise taxes.
  • To reduce the federal deficit over the next 10 years, both rely on large Medicare cuts that are, if past is prologue, unlikely to be implemented. (Medicare cuts gained the spotlight in the Senate’s recent rush to pass their bill before Christmas when it was revealed that “savings” from these cuts, assuming they are made at all, have been double-counted; once as a $500 billion “pay-for” for the health care reform bill, and again to extend the solvency of Medicare’s hospital insurance trust fund.)
  • Both will increase insurance premiums.

Despite these similarities there are very substantial differences in the details of several major issues at play, including (but not limited to) the bills’ overall cost (the House bill is priced at $1.2 trillion over 10 years, the Senate at $871 billion ($2.5 trillion over the first 10 years of full implementation)), tax increases, employer responsibility, and a public plan option. Given the lack of “wiggle room” that both Speaker Pelosi and Majority Leader Reid appear to have in their respective houses, the task of writing a bill that is capable both of garnering 218 votes in the House and 60 in the Senate (that’s what it will take to choke off debate on a new bill or conference report) presented the President and his Congressional Democratic leadership with a very tall order.

That tall order was made monumentally taller in January with the special election to replace the late Senator Ted Kennedy.  In that special election, Republican Scott Brown was elected to the Senate seat held since the middle of the last Century by a Kennedy – his election giving the Republicans their 41st seat and denying the Democrats their filibuster-proof 60-vote majority.

And in case there was any doubt of the role that health care played in the Massachusetts election, Brown campaigned on a promise of voting against the proposals before Congress, and “41” became a significant slogan among his campaign supporters.

Brown’s election turned the health care debate in Washington on its head, and forced everyone to start considering new options.  For the Administration and the strongest advocates of the more liberal, comprehensive reform, the option of choice became having the House adopt without change the version of reform passed by the Senate on Christmas Eve, thus bypassing any further Senate action and sending the bill to the President’s desk.   But Speaker Pelosi resisted that option, in large measure because there were provisions in the Senate bill that the majority of the Democrat caucus simply opposed and the Speaker was told she could not garner the 218 votes needed for passage of the Senate bill.

With that obstacle facing them, a new approach was devised:  have the House pass the Senate bill unchanged, and then both houses would pass a new bill “correcting” the unacceptable provisions in the Senate bill.  For that to succeed, however, the corrections would have to be enacted in a “reconciliation” bill – a legislative vehicle that is not subject to a filibuster in the Senate and needs only 51 votes to pass.  But because reconciliation bills can include only provisions related to Federal taxes and mandatory spending programs, many of the health care reform provisions were not likely to be able to be included in a health care reconciliation bill.

Added to the complications posed by the various procedures for further consideration of comprehensive reform was the reluctance of many moderate Democrats to proceed with a major reform bill that polls showed the majority of Americans flat-out opposed.

Although Democratic Leaders – particularly Speaker Pelosi—and the President still proclaim their commitment to enactment of a major health care reform bill, the state of play in Washington has dramatically changed.  The President has invited dialogue with his Congressional Republican adversaries, and met with their leaders in early February.  Following that meeting, the President has scheduled a major public televised session on health care for late February.

The President has said that he wants to hear Republican ideas on health care reform and hopes that all parties can reach some kind of agreement.  Republicans have welcomed the opportunity to provide input, but remain skeptical, concerned that they will be asked only to agree to parts of the existing 2,700-page bill.  They have told the President that they welcome the dialogue as long as the mission is to start over and get reform right.

NAW supports market-oriented health care reform that builds on what works to increase competition, lower cost, expand coverage, enhance transparency and improve quality. Because neither the House-passed nor Senate passed bills hit the target, NAW has called on Congress to go back to the drawing board on health care reform and has co-founded Start Over!, a coalition of approximately 250 employer trade associations that are united in seeking a new beginning on this critical issue. NAW is also working with allies in both the large business community (through the National Coalition on Benefits (“NCB”)) and the small business community (through the Small Business Coalition for Affordable Health Care) to achieve our health care reform objectives.