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Health Care Reform

Legislative Issue Update - July 2010

As the 111th Congress evolved, comprehensive health care reform emerged as President Obama’s principal domestic policy objective. Unlike the health care reform initiative undertaken in the early months of the Clinton presidency, Capitol Hill became the focal point of the reform effort and it was the Hill that drove the development of the details of legislation that emerged from both houses of Congress and, ultimately, of the legislation that was enacted into law.

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.

The House-passed and Senate-passed bills were quite similar in the approach they took to health insurance reform which facilitated the leadership’s ability to bring the legislative process to completion this Spring. 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 raise national health expenditures (NHE) relative to current law and increase the share of gross domestic product (GDP) consumed by NHE.
  • Both 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 increase insurance premiums.

Despite these similarities there were substantial differences in the details of several major issues, including (but not limited to) the bills’ overall cost (the House bill was 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. 

The “end of the line” for comprehensive health care reform appeared to have arrived in January 2010 as a result of the election of Senator Scott Brown (R-MA) to replace the late Senator Ted Kennedy (D-MA) – 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 special 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 advocates to consider new options. The option chosen: to have the House pass the Senate bill unchanged, and then both houses would pass a new bill “correcting” the provisions in the Senate bill that were unacceptable to House Democratic liberals. The corrections were enacted in a “reconciliation” bill (“Healthcare and Education Reconciliation Act of 2010”); critically, reconciliation bills by law are not subject to a filibuster in the Senate thus needing only 51 votes to pass. 

Throughout this process NAW supported 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 co-founded Start Over!, a coalition of approximately 250 employer trade associations that organized to aggressively push the Congress to begin anew on this critical issue. Regrettably, a different path was chosen despite clear and overwhelming public opposition to “ObamaCare” and NAW opposed passage of both the health care reform bill (now Public Law 111-148) and the reconciliation bill (now Public Law 111-152).

Our attention now necessarily turns to the regulatory process by which health care reform will be implemented, and to legislative initiatives aimed at repealing and replacing elements of the new statute.