March 22, 2010 - SPECIAL EDITION
This week's special edition of the Chandler Chicco Companies-DC Health Policy Pulse includes:- They did it!
- What’s in the bill?
- Industry reaction
- Next steps
- The "IMAB"
- Perspective: The political calculus
They did it!
More than a year after the first bills were introduced, the House passed a bill that will transform our health insurance system. The legislation will become law when President Obama signs it sometime Tuesday at the White House.
The President has staked his Presidency on health insurance reform, in much that same way that President Bush chose Iraq to be the measure of his success. He knew that passing the bill was essential to his prospects as leader of the nation and of his party for the next three years. It appears he also understands, however, that the health care battle has just begun. He leaves tomorrow to try to persuade the American people that this new system will be better for everyone than the old system was. In many ways, that will be the more difficult task.
As everyone knows, the House passed the “side-car” reconciliation package Sunday night as well. That bill, which would amend some of the details of the bill President Obama is about to sign, is headed for the Senate later this week.
There is little doubt that Congress and the White House made history this weekend. What we’ll think of this Congress and this President will depend largely on what happens next.
What’s in the bill?
Analysts, industry experts, consumer and patient advocates, interest groups and others are poring over the bill passed by the House on Sunday. Up until now, there has been extensive and exhausting coverage of the politics and the vote count surrounding health reform, but little about what is in and not in the bill that is about to become law. At the center of the bill is a requirement – the individual mandate – that most individuals have health insurance. People will get insurance either by purchasing it – and in some cases they will be aided in the purchase by government subsidies – or through expanded eligibility for Medicaid. As the insurance pool grows, and large numbers of healthy, younger people are added to insurers’ roles, it is hoped that the growth of insurance premiums will be slowed. Insurers will be precluded from denying coverage based on pre-existing conditions, from canceling policies because of illness and from setting lifetime coverage limits. Some of these provisions would take effect in the next six months; others will not be implemented until 2014 or later.
Kaiser Health News put together a brief and excellent summary of what the bill means for consumers, small businesses, those with and without insurance and how it might impact everyone’s taxes. http://www.kaiserhealthnews.org/Stories/2010/March/22/consumers-guide-health-reform.aspx
Industry reaction
Journalists are weighing in with their analysis of health care industry winners and losers in the health reform battle. Most seem to think that insurers will benefit from a large pool of newly available beneficiaries. Drug companies are seen to have done well by limiting the amount they would contribute to the cost of the bill, avoiding some very real dangers and getting some favorable provisions as well. The medical device industry was always on the chopping block, but they were able to reduce their liability in the final moments yesterday by scaling back slightly the fees they will be required to pay toward the cost of reform. http://www.nytimes.com/2010/03/22/business/22bizhealth.html?th&emc=th
What do industry stakeholders really think of health reform? It’s hard to tell, of course, since trade associations and professional societies will want to portray their organizations as having achieved their objectives, to “declare victory” on health reform for their dues paying members. But it is worth looking at their public statements to get a sense of what they like… and what they are worried about.
Insurers: In what can only be described as a terse statement, America’s Health Insurance Plans released the following on behalf of AHIP President and CEO Karen Ignagni” “The access expansions are a significant step forward, but this legislation will exacerbate the health care costs crisis facing many working families and small businesses.”
Drug Makers: The Pharmaceutical Research and Manufacturers of America (PhRMA) supported the bill and worked for its passage. Yet their statement is far from effusive… containing at least as much focus on concerns and unfinished business as on praising the bill’s achievements. http://www.phrma.org/news/news/phrma_statement_health_care_reform
Doctors/Hospitals: Doctors sound happier than the drug-makers did – calling the passage of the health reform “an historic step forward,” but it is worth noting that the American Medical Association still needs Congress to make a permanent fix to the formula that sets physician payments each year. http://www.ama-assn.org/ama/pub/health-system-reform/health-system-reform-passage.shtml
And hospitals sound pleased as well, saying that “For years, America's hospitals have worked hard to make coverage for all a reality.” But they look forward to continuing to work with all stakeholders to “further improve” the health care system. http://www.aha.org/aha/press-release/2010/100322-st-billpassage.html
Device Manufacturers: The Advanced Medical Technology Association (AdvaMed) issues a mixed statement, applauding increased health insurance coverage but remaining “concerned about the effects of the medical technology tax.” Device makers got some last minute help in the reconciliation package, but many believe they paid more than their fair share toward the costs of reform. http://www.advamed.org/MemberPortal/About/NewsRoom/NewsReleases/PR-32210-healthreform.htm
Next steps
When the President signs the health reform bill on Tuesday, health reform will, for better or worse, be far from settled and done. But, regardless of what happens going forward, the identical bill has now passed both the Senate and the House. On President Obama’s signature, it becomes law.
The Senate is scheduled to take up the “reconciliation side-car” legislation that passed the House Sunday night beginning Tuesday afternoon. This is the package of changes that House Democrats demanded before they would vote for the Senate-passed bill. Reconciliation would amend the bill President Obama is about to sign.
Senate Democratic leaders are meeting with the Senate Parliamentarian today to ensure the provisions of the bill passed by the House cannot be successfully challenged by Senate Republicans. Senate leaders hope to complete consideration of these provisions by the end of the week. We assume they mean this week. But while debate on the bill is limited to 20 hours, any senator can propose any number of amendments to the bill. So, I’m thinking this could take a while.
What’s in the reconciliation package? What happens if reconciliation fails and the Senate bill remains the law of the land? http://washingtonindependent.com/79923/what-if-reconciliation-fails
The “IMAB”
Buried in the about-to-be-signed health reform bill is a provision that establishes an Independent Medicare Advisory Board (IMAB). Under the legislation, the IMAB will develop a package of recommended reforms, changes and cuts to Medicare, which could include reduced reimbursement for hospitals, physicians, nursing homes, home health agencies and drug therapies. These cuts would automatically become law, unless Congress passes legislation that would override them and the President signs the bill.
Hospitals, in particular, have been very successful in avoiding recommended Medicare cuts by mobilizing local hospital leaders, volunteers and providers against the cuts. The IMAB process, modeled on the military base closing commission, is designed to insulate members of congress from these local politics. It could work, forcing hospitals and all other stakeholders to absorb big cuts without easy political recourse.
The bill waits until 2015 before the IMAB is empowered, perhaps to allow Congress time to change its mind on this. But including the IMAB was an important part of keeping the cost of health reform under the $1 trillion threshold set by the President. http://thehill.com/opinion/op-ed/87423-super-medicare-advisory-board-is-bad-policy
Perspective: The political calculus By Al Jackson, CCC Washington
Passage of the health reform legislation on Sunday night was historic. Of that there is no doubt. But it is historic not only because the bill will eventually lead to health insurance coverage for about 32 million people currently without insurance. Rather, it is because, contrary to recent history, Democrats in Congress and the White House decided to make it happen.
Most of those who worked for and voted for health reform did it for two important and necessary reasons: they believed it to be the right thing to do; and they believed the politics required them to vote they way they did.
A majority of Democrats represent “safe” congressional districts, that is, constituencies that are reliably Democratic and largely in favor of health reform. So voting for health reform was relatively easy for these Democrats. And it is unlikely any Republican will be turned out of office because of his failure to support health reform.
All the attention was focused on the 30-40 House Democrats who represent “swing” districts and face a tough reelection fight in November. They represent fickle constituencies who are prone to switch their allegiance on a regular basis.
Republicans did everything they could to remind Democrats that health reform is dangerous, that the GOP won control of both the House and the Senate following the last attempt at reform in 1994.
These vulnerable Democrats needed to decide whether they wanted to support the President and Speaker Pelosi (ads with each of these incumbents morphing into Mrs. Pelosi are already in the can) or go it alone and oppose their party. Because by voting yes, they could be sure the White House and the congressional leadership will work very hard to get them reelected. But, a no vote would leave each of these Democrats on their own, without support from the White House and core Democratic funders, while still facing fierce GOP opposition.
Just enough Democrats – three more than necessary – vote yes on Sunday. And a new entitlement was born. Democrats now own health care in this country. They believe that is a good thing. We’ll see.
For more information or to subscribe directly to the CCC-DC Health Policy Pulse, please email healthpolicypulse@chandlerchiccocompanies.com or call CCC-DC Health Policy Pulse Editor Al Jackson at 202-609-6002 or contributor Katherine Lea at 202-609-6021.
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