If you’re not already planning to tune in to the President’s health care summit tomorrow, maybe it’s time to reconsider. It will be streamed live here, from 10 AM-4 PM Eastern. Forget Lindsey Vonn and The Office baby special: This is must-see TV.

And if you can’t convince your boss that six hours of C-SPAN is equivalent to 30 minutes for lunch, you can follow the Hub’s twitter feed right from your desktop for a live analysis of what’s going down at Blair House (and maybe a little reform haiku thrown in, too.)

Reaching the Summit

With the release of his plan—really a series of amendments to the Senate-passed Patient Protection and Affordable Care Act (PPACA)—President Obama  is ready to embark on the last leg of the health reform journey. Key changes in the proposal include:

•    Improvements in affordability for low- and moderate-income families in the Exchange. Relative to the Senate bill, most families will either pay less and/or get better benefits.

•    Stronger oversight of health insurance premiums. The proposal would give the HHS Secretary the power to deny or modify excessive premium increases as well as strengthen the ability of state insurance regulators to oversee rates.

•    Phasing out of the coverage gap known as the “doughnut hole” in Medicare Part D, making prescription drugs more affordable for seniors.

•    Increased Medicaid funding for all states (and territories), while eliminating the special funding deal for Nebraska.

•    Equalizing the treatment of union and nonunion health benefits with regard to the excise tax on high-cost plans and also adjusting for age, occupation and gender of workers so that firms with an older and sicker workforce would not be hit as hard.

The President also proposed a series of payment integrity and anti-fraud measures to reduce payment errors in Medicare and Medicaid, drawn largely from Republican proposals. (Full summary of the proposal is available here).

Democratic leaders in the House and Senate have reacted positively to the President’s proposal and seem poised to move forward with reform post-summit, with or without a bipartisan agreement that no one is expecting.

Interestingly, not all of the President’s proposals seem to fit neatly into the rules of budget reconciliation. This suggests that some ideas, such as increasing federal authority over insurance rates, will have to get 60 votes in the Senate in order to survive. However, this is likely a win-win for the Democrats: either the rate regulation provision stays in, or Republicans will have to go on record as siding with insurers against consumers on insurance rates.

Summit Watching Guide

The President has continued to sound the theme of bipartisanship by posting on a website all of the Republican-backed ideas already included in PPACA, and offering to post a Republican proposal or statement of principles side-by-side with the President’s plan.    Republican Congressional leaders, however, aren’t having any of it.

The continued trash-talking of the summit obscures the dirty little not-so-secret that the difference between the Republican and Democratic proposals is not about different means to reach the same end, but entirely different ends.

First, Congressional Republicans by and large reject the premise that all Americans should have guaranteed access to secure affordable health insurance and health care. Secondly, they reject the idea that a stronger public-interest watchdog and a new set of rules is needed to correct fundamental weaknesses in the current health insurance market.These are the central premises of the plans put forward by the President and Congressional Democrats and they are beliefs strongly held by the majority of Americans, notwithstanding their skittishness and disillusionment with the process. (Read Real Reform, Community Catalyst’s analysis of the differences between the approaches put forward by the President and the Republicans here.)

At least one prominent Republican, California Governor Arnold Schwarzenegger, has been willing to call out his party on their stance—calling the demand that the summit start with a blank piece of paper “bogus.” (Now that’s a maverick.)

Because the divide between the two parties is so fundamental, at the summit itself we can expect neither a real attempt to reach bipartisan agreement, nor even a real debate over the merits of various policies.

Instead this will be a battle of competing narratives. The President and Congressional Democrats will to try to focus the discussion on the problems with the status quo and substantive ideas for addressing those problems, while the Republican will try to reinforce their anti-government mantra. (If watching 4 to 6 hours of this kind of sparring is not your idea of fun, you can liven it up by taking a drink every time a Republican says “job-killing big government takeover.”)

Look for a special post-summit Insider Friday!

–Michael Miller, director of strategic policy

Procedurally, a Brown victory gives Congressional leaders several options to get across the finish line: Pass the Senate bill without amendment in the House, get a compromise done before Brown is seated, or go back and do a new bill via budget reconciliation.  Each of these paths is possible, but has some pitfalls.

In the first scenario: It’s unclear that the House can drum up 218 votes for the Senate bill, with possible defections coming from both the right and left of the Democratic caucus. (more on House vote count below). A  variation on this theme that could be more palatable to House members would be to pass both the Senate bill and a reconciliation package amending that bill at almost the same time.  The reconciliation package would reflect many of the agreements currently being negotiated between the House and the Senate (though some could potentially be beyond the scope of what is permissible through the reconciliation process).

Assuming they can conclude a deal and get a CBO score in time, passing a House-Senate compromise would be possible, but rushing the bill through ahead of Brown’s seating could be politically controversial.  Will Senators such as Nelson, Lieberman and Lincoln, who have been hardest to win over to supporting reform, remain supportive if Brown wins?  A variation on this theme might termed the ‘Franken scenario.’ If the race ends in a photo finish, a recount and possible subsequent legal action could take weeks or even months, giving Congress more than enough time to complete its work.

The least likely scenario appears to be starting over with reconciliation. This would require a substantial rewrite of the bill, taking time that Congress is eager to devote to other issues.

Counting noses in the House

With all roads to victory requiring another vote in the House, securing 218 votes in that chamber has become a critical task for House leadership and the White House, and should be the number one priority for grassroots supporters of reform.

When the House passed its version of reform in August, the victory margin was a mere three votes. Now, with one vacant Democratic seat and one Republican who is unlikely to provide the margin of victory, passage in the House requires persuading all of the anti-abortion Democrats to vote yes on a bill that contains the Nelson rather than the Stupak language on abortion, or persuading some members who voted no the first time to vote yes. This task could be made more difficult if a Brown upset in Massachusetts scares off more conservative members of the caucus—even perhaps some who voted yes the first time.

Progress on getting to Yes

Against an uncertain political backdrop, House and Senate negotiators appear to be making major progress on reaching agreement on a final bill.  They struck a deal early Friday morning on the tax treatment of health benefits that would raise the threshold at which the tax kicks in, make adjustments for plans that are high cost for reasons other than the scope of benefits, and provide additional temporary protection for plans negotiated through collective bargaining.

The revised provision is projected to bring in $60 billion less revenue, a hole that negotiators are trying to fill, in part, by taking a tougher line on cost containment from health industry groups. This tactic is yielding mixed results – the biotech industry in Massachusetts, for instance, is threatening to endorse Brown for Senate if protections for it in the bill are watered down.  While making adjustments to the health insurance tax was a key priority for House negotiators as well as unions and other progressives, the lost revenue will complicate efforts to make progress on another key issue—improving the affordability provisions in the Senate bill.

Although details haven’t emerged yet, the debate over whether Exchanges should be run from Washington with a state option or from the states, with a national fallback appears to be resolving productively. Reports indicate that the bill may still give states the right of first refusal over whether to run an Exchange, but establish more clear and uniform requirements for those that do.

Still to come: How to finance the elimination of the Part D doughnut hole, and a significant dispute over the extent to which immigrants will be discriminated against in reform.  There, the two issues in play are whether states would receive federal funding for covering legal immigrants under Medicaid, and whether undocumented immigrants would be barred from the Exchange even if they pay entirely with their own money.

Most of the other big issues—such as what employers would required to contribute, and how the abortion language will be structured—are expected to more closely track the Senate bill.  Whether the individual mandate will track the stricter House version or the more porous model included in the Senate bill, should depend on whether real affordability improvements are made in the bill.  A worst-of-both-worlds resolution would be a tough mandate and significant penalties coupled with inadequate affordability protections.

–Michael Miller, director of strategic policy

photo courtesy of croatry at flickr creative commons

The Overall Process
Reports that the House and Senate will bypass a formal conference committee and informally negotiate a bill instead have been circulating for over a month but, in one of those mysteries of the news cycle, the plan has recently become a hot topic.

The other important process piece (though also not really news) is that the Senate bill is expected to be the starting point for negotiations, and the House will likely have to wage a limited number of battles to make changes.  Defining what that list will include is The Task for House Democratic leaders now as they seek to hold together their own fractious caucus.  One item almost certain to make the list is closing the Medicare Part D “doughnut hole.”  Indeed, Senate leaders have already stated publicly their intention to close the Part D coverage gap—though how to pay for it remains a matter of intense debate, with House members arguing that funding should come from the drug industry, and the Senate perhaps less keen to go that route (as the specter of its summer deal with PhRMA looms.)

Financing
As we reported in December (and said many times before that), in the coverage debate, financing is the key.  Most observers believe that the excise tax on high-cost health benefits in the Senate bill will be further scaled back in negotiations with the House.  A critical and related issue—probably the most important one you never hear talked about–is one we flagged just before Christmas: How the price tag of reform gets calculated.

By our reckoning (see last week’s post), the Senate bill provides only a little over $600 billion in assistance to make coverage affordable for low- and moderate-income families, while the House comes in at around $900 billion.  Those extra $300 billion in assistance translate into a year’s worth of coverage (at the front) and more financial protection to low- and moderate-income uninsured people.

So the big financing questions left are: Will the House accounting prevail? And what, if anything, replaces the money lost from the excise tax? The answers to those questions determine whether there is any possibility of doing better than the Senate on critical affordability measures or by accelerating the implementation timetable.

Exchange Exchange
It looks now like the House is going to make a major push to swap out the Senate proposal for state-based insurance Exchanges in favor of a national Exchange as in the House bill.   (States could still opt to run their own if they met federal standards.)  With that in mind, here’s a brief overview of the pros and cons of state and federal Exchanges.

A national Exchange benefits from uniformity and is likely to have lower administrative costs than 50 state Exchanges would. A national Exchange also reduces the problems that could stem from state governments being unable or unwilling to take on the new responsibilities envisioned in the Senate bill. It’s also possible that a national Exchange would have somewhat better negotiating leverage with national insurance plans, at least in small states.

But the price tag difference between a national Exchange and state Exchanges is likely less than many proponents of a national Exchange who tout a federal model’s savings believe.  The bulk of health care costs are determined by underlying local conditions, and a national Exchange will have little influence over those factors.  In addition, while it’s likely that states will vary in how well they rise to the new challenge, at least some are likely to do an excellent job.  If a future federal administration were to be hostile to health reform, the entire Exchange for the whole country could be undermined; recall that this was a problem for many executive agencies in the previous administration.

Finally, a national Exchange is no more a safeguard against the influence of the health care industry than are state Exchanges.  In fact, the geographic remoteness of Washington from most of the country poses no real obstacle to special interests seeking to influence decisions, but does limit the ability of consumers to engage directly in the decision-making process or hold decision-makers accountable.

In the end, state versus national Exchange is of less importance than are the rules under which any Exchanges must operate and the underlying structure of insurance regulation.  So for example, a bill should ensure that there is no conflict of interest in Exchange governance and that business is conducted subject to open meeting laws, as well as provide for consumer representation in Exchange governance.

It is also important not to carve insurance markets up into distinct pieces: for instance, not to split up non-group and small-group insurance, or allow separate risk pools to operate both within and outside the Exchange. The bill should also empower the Exchange to exclude insurers if it is determined that they do not meet standards for providing good value.

On many of these issues, the House does in fact do better than the Senate, as well as on matters  of insurance regulation such as limiting rate variation based on age and clearly eliminating annual and lifetime limits on coverage.

Bottom line? If the House wants to fight about Exchanges, they should focus on the issues that matter most.

Immigrant access
Discrimination against immigrants remains a problematic aspect of reform, but the Senate seemed to make progress as reports indicate that leadership agreed to eliminate the ban on federal Medicaid matching funds for immigrants who have been in the country for less than five years.

We hope that, in negotiations,  the House will match the Senate’s willingness to remove the “5-year bar,” but won’t trade this progress for legal immigrants for its rightful opposition to the Senate proposal to bar undocumented immigrants from the Exchange, even when paying entirely with their own money—a provision supported by the Obama administration.

It’s also unclear just how many states would take advantage of the new matching funds option when, by doing nothing, they can leave the entire cost of covering low-income recent immigrants to the federal government.  The only fair alternative would be to give legal immigrants equal access to Medicaid, but state-based opposition to this fix has proved insurmountable thus far.

Next Dragon in the Road
Though negotiations between the House and Senate are far from finalized, reform opponents are already gearing up for a multi-pronged attack on the legislation, including legal challenges, state constitutional amendments and ballot initiatives.

Those who argue that these challenges have little legal merit are missing a larger point.  This strategy is first a political one, and only secondarily aims to change the course of the short-run health care debate.

First, given the pace of implementation, the Presidential election of 2012 becomes pivotal.  A change of administration that year would likely cripple implementation, perhaps fatally.  Campaigns being developed now are largely geared toward building a base of activists for 2012.

Even if they are unable to unseat Obama, Republicans see health reform as a wedge issue they can use to regain control of Congress.  Failing that, by defeating some vulnerable and prominent supporters of reform, opponents hope to create a chilling effect that will dampen the willingness in Congress to pursue further reform.

What this means for reform supporters is that—far from final negotiations curtaining the show—a new act in the saga of U.S. health care reform  is about to begin.

–Michael Miller, director of strategic policy

photo courtesy  of austinevan at flickr creative commons

And now for something completely different, Senator McCain proclaims himself a defender of Medicare

The first week of Senate debate has seemed, at times, more like Monty Python satire than serious debate. Like when Sen. John McCain took the Senate floor to decry proposed Medicare savings in the bill. Apparently, McCain forgot his own proposal as a presidential candidate to make much deeper cuts. The Medicare debate highlights the extent to which the reform debate has become much less about health care and much more about partisan positioning. The main purpose of the McCain amendment appears to have been to afford Sen. McCain the opportunity to record a “robo-call” message casting Democratic politically vulnerable Senators as opponents of Medicare.

Perhaps as a sign of the significance Politico attaches to the floor proceedings, the Capitol Hill online news rag’s weekend health reform coverage focused more on President Obama’s meeting with the Democratic caucus and whether Sen. Baucus did something inappropriate by recommending his girlfriend for a job as a U.S. Attorney than on anything happening on the Senate floor.

Health Reform Punching Bag
It’s a good thing Democratic Majority Leader Harry Reid is a former boxer. He’s going to need everything he learned in the ring to keep health reform from becoming a giant punching bag for opponents while he works to corral 60 votes. The Republican strategy seems to be to throw everything but the kitchen sink up against health reform and hope some of it sticks.

The Democrats’ counterstrategy is to file and debate their own “message amendments” meant to shape the news coverage and allow members, especially those facing difficult reelection fights, to champion popular causes. Examples include an amendment sponsored by Sen. Michael Bennet (D-CO) to ensure that there would be no cuts to Medicare benefits (passed 100-0), and an amendment by Sen. Blanche Lincoln (D-AR) to cap the tax deductibility of pay for insurance company executives (which fell short of passage by four votes, 56-42).

About those 60 votes
We’ll see a short break from these posturing and “message amendments” today as the Senate tackles abortion, one of the two main issues that appears to be hampering its ability to lock down 60 votes for reform (the other being the public option). Senator Ben Nelson (D-NE) has said that he would not support reform legislation unless it included language restricting abortion similar to the language inserted in the House by Michigan Congressman Bart Stupak. But the Senate does not seem likely to approve an amendment that mirrors the House provision.

If Reid loses Nelson’s vote, he will need to rely on the pro-choice but anti-public option Republican Senators from Maine in order to get the 60 votes he needs. In the process, he could possibly pick up the vote of Sen. Lieberman, who has said he would support a filibuster if the public option was included in the Senate bill, but Reid risks losing support from progressives who feel that the “state opt-out” provision in the Reid bill is already too weak. A new public option proposal could emerge from negotiations between liberal supporters, conservative opponents and the White House sometime this week.

Two issues that divide the Democratic caucus but are not likely to get resolved in the Manager’s Amendment are: How far to push the drug industry for savings, and how best to structure health coverage for children.

On the drug issue, many Democrats believe that the deal Senate Finance Chair Max Baucus and the White House struck with PhRMA lets the industry off too easily. They want to wring additional savings from the drug companies and use the money to close the Medicare Part D “donut hole.” Other Democrats fear, though, that if they push the drug industry too hard, the major investment the industry has been making in supporting reform will flip to opposition and could sink the bill. Even if the Senate decides to continue the kid-glove treatment for the drug companies, they will have to wrestle with the issue again because the House takes a more aggressive approach.

The children’s issue mirrors the long-running debate on affordability in that it is not so much about principle as about cash. Both Senators Casey and Rockefeller plan to file amendments aimed at making sure that kids don’t lose benefits they have now. While the Senate supports enhancing coverage for children, the amendments have not yet been scored by CBO, and it is unclear if they are budget neutral or will require an additional revenue source.

As soon as Reid gets 60 votes worth of support on these two issues, watch for a rapid increase in the pace of Senate debate, with many of the Senate Democrats’ main concerns getting wrapped into a final Manager’s Amendment.

Assuming all goes according to plan…
The Senate will conclude their debate prior to Christmas, leaving the House, Senate and White House to work through the many differences in the respective versions. Here are the key ones to watch:

Financing
The House relies largely on progressive income taxes to finance health reform, while the Senate proposal taxes health benefits. Interestingly, this chasm may be the hardest one to bridge, though it hasn’t attracted nearly the press coverage of other tough issues.

Affordability
The House does much better for low-income people, while the Senate, at least on premiums, does better for moderate-income folks—though in general, the House provides better benefits. The obvious solution is to take the best of both worlds, but the challenge goes back to the financing debate: Where will the money come from?

Exchanges and Insurance Regulation
In most ways, the House bill establishes tighter oversight and more consumer-friendly regulation of the insurance industry, including less scope for discrimination against older subscribers, or opportunities for the back-door reintroduction of the practice of charging people more when they are sick. The House also gives the exchange more power to negotiate with insurers and exclude plans from the exchange if they do not offer good value.

Abortion
As of this writing, we don’t know the outcome of the Senate debate, but odds are against the Senate adopting the House language. The question for conferees is whether there is anything in the middle that both sides can live with.

Public Option
After the Senate gets through wrangling over the public option, members will have to take the matter up again in the House, where support for a public plan runs much deeper. A number of  progressive members of Congress are on record saying they won’t vote for a bill without a public option, and advocates are working to hold them to their word.

Employer Responsibility
The House includes a “pay or play” provision, while the Senate charges employers penalties only if their employees actually access subsidized coverage.

Undocumented immigrants
Though relatively few undocumented immigrants could actually afford to pay the full cost of an insurance policy, the Senate bill prohibits them from buying insurance through the exchange, even with their own funds. During the House debate, members of the Congressional Hispanic Caucus told Speaker Pelosi that they would not vote for a bill that contained such a restriction. If the same holds true for a conference report, the Senate may have to back down.

–Michael Miller, director of strategic policy

Two-hundred nineteen Democrats and one Republican, two more than the bare minimum needed for passage, voted in favor of the Affordable Health Care for America Act.  (Read Community Catalyst’s updated summary). The vote marked the first time in 100 years of episodic efforts to provide health security to all Americans that a bill cleared the floor in either body of Congress. While there wasn’t a single person who voted for the bill who didn’t have some misgivings about some provision, the sentiment that doing nothing was not a viable option prevailed. The vote, above all, meant this: The process must move forward.

The vote was a do-or-die moment in the struggle for health reform and hundreds of groups responded by flooding the Capitol switchboard with calls. Late endorsements from AARP, the AMA and the Conference of Catholic Bishops were crucial, but dozens of state and local organizations also worked tirelessly to advance the cause of health care justice (See the Speaker’s list of endorsing organizations.) Such grassroots mobilization for health care was necessary to counter the ever-more apocalyptic tone of opponents.

The narrow victory was also a testament to the negotiating and vote-counting skills of Speaker Pelosi and Majority Leader Hoyer. Brand new Congressmen Garamendi (D-CA) and Owens (D-CA), winners of special elections only a few days ago and sworn in on Friday, provided the margin of victory. The lone Republican supporter of the bill, Rep. Ahn Cao, who won his seat in 2008 in a heavily Democratic and African American district in Louisiana against an incumbent tainted by corruption charges, provided additional (very thin) cushion.

Wedge issues threaten passage
Abortion and immigration, two emotionally-charged issues that expose deep fault lines in the American body-politic, almost derailed the reform legislation at the eleventh hour. Abortion opponents were able to force a vote on an amendment sponsored by Michigan Rep. Bart Stupak that bans coverage for abortions in the “public option” or any plan that is eligible for a federal “affordability credit.” Sixty-four Democrats voted yes on the Stupak amendment.

While many supporters of the abortion ban voted no on final passage, 37 of those yes votes (38 counting Republican Cao) were also yes votes on the bill.  It’s likely that some of those who voted for the ban would have voted yes even had the amendment lost, but it’s also clear, given the narrow margin of victory, that there were not enough votes in the House to pass a health reform bill without the restriction. The amendment was a bitter pill for pro-choice forces both in and out of Congress who nevertheless supported the bill this time in order to move the process forward.

Up until almost the last minute, organizations and members of Congress supporting equity for immigrants were bracing for a fight over a proposal to bar undocumented immigrants from purchasing health insurance through the Exchange even if they used their own money—a provision supported by the White House and included in the Senate Finance bill.  Though members of the Congressional Hispanic Caucus secured a commitment from House leadership not to include provision in the Democratic bill, there was concern that Republicans would offer the language as part of their “motion to recommit,” which does not need to be vetted by the Rules committee prior to its introduction.  Ultimately, the Republican recommittal motion focused on malpractice reform instead.

House action is far from the final word on either of these hot button issues. Both are certain to remain lightning rods during the Senate debate and conference committee deliberations.

Thank you notes

Passage of House bill provides an enormous boost of momentum to the reform effort.  Thank you for your role in this historic vote.  We know many of you reached out to your Representatives, and your voices were heard.  We appreciate your efforts to reform our heath care system.

Before activists turn their attention to the difficult job of winning passage in the Senate, one more critical task remains on the House side. It’s time to thank the members of Congress who labored for months to bring us to this point, who overcame reservations and disappointments with the bill to move the process forward, and who stood up to blistering attacks of distortion and fear-mongering to achieve this unprecedented victory.

It’s also important to thank Congressional staffers, who have been working unbelievably long hours and whose vital role in keeping elected members connected with the concerns of their constituents often goes unseen by the public.

–Michael Miller, Director of Strategic Policy

Instead, they put out a bill that includes a public insurance plan that would negotiate rates with providers.  The CBO projects this version would save less money, so Leadership made up for the lost savings by proposing a further expansion of Medicaid to 150 percent FPL instead of the 133 percent that cleared committee in the original bills.

Community Catalyst is strongly supportive of the House bill, which goes beyond earlier drafts in a number of respects. It includes a national insurance Exchange that also gives states the option of creating their own Exchanges, new rules that prevent insurers from denying coverage to people with pre-existing conditions or charging people more because they are sick, expands Medicaid, adds a long-term care insurance program for disabled adults, requires health plans to allow young people through age 26 to remain on their parents’ policy, and eliminates the Medicare doughnut hole by 2019, rather than 2024.

Compared to the bill taking shape in the Senate, the House bill is likely to provide better benefits, better subsidies and more progressive financing while reducing the federal deficit and still costing less than the $900 billion ceiling set by President Obama.  Compared to the Senate, the House leadership appears more willing to take on segments of the health care industry and also includes a more significant employer responsibility provision.  (As a result, it faces stiffer opposition from these interest groups, though insurers are opposing the Senate bill as well).  However, according to some analysts, the House legislation does less to reduce spending over the long run than the proposal that passed the Senate Finance Committee.

While the House bill represents a huge step toward quality affordable health care for all, it includes a couple of notable weaknesses. The bill bars most workers who have employer-sponsored insurance from receiving subsidies in the health insurance Exchange.  Instead, workers would be required to take up their employer offer of coverage unless its cost exceeds 12 percent of their income, a requirement that would be too burdensome for low-wage workers.  A better approach would be to exempt workers from the mandate requirement on a sliding scale, as Massachusetts does.

A second problem is that the House legislation assumes that coverage is “always affordable” for people whose income exceeds 400 percent of the federal poverty line.  This provision would be burdensome, especially for older adults with income just above the cut-off point for subsidies.  Although the bill limits premium variation based on age, an older person could still pay twice as much as young adult, leaving them with a very substantial premium liability. Establishing a ceiling on how much people could be required to pay for coverage, regardless of income, would remedy this problem.

The House bill also eliminates the Children’s Health Insurance Program, known as CHIP, and assumes that children who are not Medicaid eligible will get their coverage through employer plans or through the Exchange.

There a number of potential benefits to moving children off of CHIP, not least of which is moving away from a block grant program that gives states the ability to offer relatively limited coverage (flexibility that states have not generally utilized to date) and instead give children a federal guarantee of coverage.

But while under law, CHIP plans may be limited, in practice most states have provided kids with comprehensive coverage.  As a result, children transferring from CHIP to Exchange coverage could see their benefits reduced and their costs increase.   Preserving CHIIP as a program that provided additional benefits and cost-sharing protections for children in families above the income eligibility threshold for Medicaid could help ensure that children get the health care they need.

For more details on the House bill see this updated Community Catalyst summary and discussion.

218, that elusive magic number
As the House prepares for floor action as soon as this week, several hurdles to passage still stand.  Here are the three main sticking points:.

•    Abortion
A number of House Democrats, led by Michigan Representative Bart Stupak, want to have a vote on language that would preclude plans that receive federal subsidies from including abortion coverage.  The current language in the House bill separates out the cost of abortion coverage from a benefits package, and requires the value of subsidies to be calculated without it. But Stupak wants a stricter prohibition on abortion coverage and claims to have the support of 40 House Democrats, which could be enough to block reform if they do not get their requested vote.

•    Immigrant Coverage
A debate is simmering within the House about whether to adopt a provision, favored by President Obama, that would prohibit undocumented immigrants from buying insurance coverage through the Exchange, even with their own money.  Many progressives, especially members of the Congressional Hispanic Caucus, are concerned about the lack of equal treatment for legal immigrants.  Advocates and lawmakers are now contemplating whether to push for an amendment that would give states the option to receive federal matching funds to cover certain legal immigrants through Medicaid.

•    Public Option
While the House leadership believes they lack the votes for a public option tied to Medicare rates, some progressives still want a chance to vote on that amendment and may block action if they don’t get it.

All of these issues could be addressed in a “manager’s amendment” or in the rule that will govern debate in the House later this week.

Affordability woes in the Senate
In case you missed it in our Friday blog post, the Senate is still struggling with the affordability issue.

While sources on the Hill confirm that the Senate is trying to make badly-needed affordability improvements for moderate-income households, they are trying to do it while still reducing fees paid by medical device manufacturers and an excise tax on high-cost insurance plans.  As a result, the best idea the Senate appears able to come up with at this point is to reduce premiums for moderate-income households by raising them for those at the bottom (We compared this proposal with the SFC bill and House leadership plan here.)

Timetable Update
House: The House plans to start floor debate late this week and to finish no later than Thanksgiving.

Senate: A backlog of work at CBO has slowed progress on the Senate side.  Given the slower pace of debate in the Senate, and with Veteran’s Day and Thanksgiving on the holiday horizon, the Senate is unlikely finish debate this month, though there is still a good chance they will finish before Christmas.  That means though, that resolving the differences between the House and the Senate will likely extend into next year.

Shameless plug department

Remember to subscribe by RSS or email to have Health Policy Hub posts delivered to you, or share this post with your facebook or 2.0 networks using the “bookmark and share” widget at the top of this page.

–Michael Miller, Director of Strategic Policy

Here’s the story: After months of laborious negotiations and weeks of debate, the Senate Finance Committee passed its version of health reform on Oct. 13.  The Finance proposal differed from the bills passed by all of the other committees in numerous ways; one of the most striking was how much less financial protection it offered to low- and moderate-income people who would be required to purchase health insurance.  Premiums under the Finance proposal were higher and benefits lower than in either the Senate HELP or the House proposal.

As Senate leaders work to merge the HELP and Finance proposal into a single bill, they are trying to reduce some of the premiums and, according to a paper by the Center on Budget and Policy Priorities and discussions Community Catalyst has had with a number of Hill staff, the focus is on reductions for people between 200-400 percent FPL—an admirable undertaking that we fully support.

However, in order to pay for those increased premium subsidies, Senate leaders are considering reducing premium subsidies for the lowest income households by as much as 50 percent more than the already low level in the Finance proposal.  If this proposal is adopted, many low-income households will have a difficult time meeting their premium obligations, or could also be faced with financial penalties for failing to purchase health insurance.  Rather than being helped by reform, they will be hurt.

Is taking subsidies away from low-wage workers really the only way the Senate can think of to finance necessary improvements in subsidies for those with slightly higher incomes?  David Stockman, Ronald Reagan’s first budget director, famously noted that once in Washington he found it was “easier to curtail weak claimants than weak claims.”  That adage appears to be alive and well in Washington today, as Senate leaders seem more willing to impose an unmanageable burden on low-wage workers than to explore progressive taxation or to wring a little more waste out of the health care industry, as their colleagues did in the House.

The Senate bill is still an enormous improvement from where we currently are and the process needs to continue to move forward.

As for subsidies, it is not too late for the Senate to change course, and for a bill to emerge that will improve affordability for both low- and moderate-income households.  But it will only happen if people raise their voices and demand it.

–Michael Miller, Director of Strategic Policy

Massachusetts as model — it’s a common claim in health care policy circles. With the lowest rate of uninsured residents in the nation – just 2.7 percent – it’s clear to those watching that Massachusetts’s mix of Medicaid expansions, sliding scale subsidies, private insurance reforms and individual mandate are working to expand coverage and have served as the template for national reform.

But there are other, less obvious lessons from the Massachusetts experience that have not really filtered into the political and policy discourse in Washington.

Among them? Putting coverage expansion before cost containment. Find out what the rest are here.

So here’s a special Insider devoted (mostly) to trying to get the story right. (With the caveat that it could change by the time you read this).

Housewarming
There are over 200 votes for the “robust” public option, the one with rates based on Medicare, but the magic number is 218 and it’s still not nailed down. House leadership is trying both to round up a few more votes and to test out other possibilities. But whether a different approach, e.g. a public option with negotiated rates, does any better is open to question, since such a proposal may lose more support from progressives than it gains from more conservative members of the caucus.

The upshot? Progressives need to continue their big push this week to find those last few votes.

The revival of public option in the Senate
Ever since polling revealed that a public option wasn’t a deal breaker to members of the Blue Dog caucus, the question in the House has been not whether a public option would be included, but what version.

It’s a different story in the Senate.  Olympia Snowe’s vote in Finance initially seemed to seal the deal against inclusion of a public option in the Senate, but a number of factors have kept it alive.  Persistence from both organizing groups such as Health Care for America Now, among others, and champions in the Senate such as Sen. Schumer, who has worked to find a version of public option that would secure support from conservatives, has been instrumental.

The self-inflicted wounds of the insurance industry also factored in.  By squarely attacking the Senate Finance proposal—the most industry-friendly of any of the bills on the table—the insurers convinced some members that they were trying to kill health reform, and no accommodation would be possible.  Another factor that has flown mostly below the radar is the ripple effect from the President’s insistence that a bill clock in at under $900 billion. And here’s where the public option and affordability story lines start to run together.

While the SFC proposal was scored under $900 billion, the relatively skimpy benefits and high premiums were concerning to the Democratic caucus and many reform supporters.   Without adequate affordability provisions, the underlying structure of health reform—insurance reform coupled with an individual mandate—is unworkable.

Fixing the affordability problem requires not only additional revenue, but cost-effectiveness measures in order to create enough “head room” under the $900 billion ceiling to find that revenue, and there, the public option is an important part of the solution.  By reducing the price-tag of reform, inclusion of a public option becomes a “two-fer”—a proposal that enjoys broad support within the caucus and that also addresses cost issues.

Senate Democratic leaders seem to be leaning toward inclusion of a public option that gives states the ability to opt out.  This way, leaders give Democratic conservatives a chance to vote to strip the provision but protect it by setting up the vote so that 60 votes are required to delete it instead of add it.  (It’s a strategy Ezra Klein says made the White House and Sens. Baucus and Snowe none too happy.)

This strategy works if and only if all the members of the Democratic caucus agree to at least stick with the party to break a filibuster – even if they vote no on the underlying bill.

That’s because they will almost certainly lose Sen.Snowe (and fail to pick up Sen. Collins) with this strategy.  As the failed cloture vote on a permanent fix for Medicare physician fees last week demonstrated, there is no guarantee that the Senate leadership can hold all 60 members. If a cloture vote on a bill with a public option fails, leadership might have to go back to a trigger or some other option, but only as a last resort if all else fails.

Read the rest of the Health Reform Insider on the Community Catalyst National Reform page, or subscribe to the Health Policy Hub by email to the get the Insider each week.

Yet there’s been no sign that these endorsements will move Republicans in Congress.  Maybe it’s something in the water in Washington, or maybe it’s just an indication of the extent of ideological or simply partisan polarization that so few sitting Republicans are willing to join party elder-statesmen in moving reform forward.  Right now, the calculus in the Republican caucus seems firmly set on continuing its near-unanimous opposition to reform – and carrying it into the 2010 elections and beyond (just in case you thought this issue was going away after passage.)

The Ladies from Maine Part I: Snowe Fall
Sen. Olympia Snowe’s aye vote on the Finance Committee reform bill ended intense speculation over which way the senior Senator from Maine would go.  To many, her vote suggests that she agrees with assessments that a yes vote in Finance gives her more leverage over the process going forward than continuing to dangle the carrot of her possible future support.  Snowe is now positioned to limit the movement of the bill to the left as it’s combined with the more liberal HELP bill, to be a key decision-maker on floor amendments, and perhaps even to have a formal role in conference committee.

In the eyes of the beholder
What is it that Sen. Snowe wants as the process moves forward?  One priority is preventing the inclusion of a public option except as a fallback.  A second Snowe priority is affordability.  At the same time, she has opposed most of the options on the table advanced to make better subsidies available.

A contradiction?  Not necessarily.  Affordability in Sen. Snowe’s eyes seems to be more about slimming down the coverage people would receive rather than making subsidies better—an idea that is getting some support in Democratic quarters, as well, even though the Finance bill already offers much less generous coverage than other proposals, particularly for low-wage workers.  Common Sense Affordability Protections, a paper released today by Community Catalyst and PICO, highlights the problems for low-income people in the Finance proposal and makes recommendations for how to fix them.

The Ladies from Maine Part 2: As Snowe goes so goes Collins?
Late last week, Sen. Susan Collins (R-ME) indicated her openness to supporting reform.  This is welcome news in some quarters because of the challenge of getting 60 votes even with support from Sen. Snowe.  On the other hand, Collins’ statement triggers some alarm bells.

The concern she voiced over potential cuts to Medicare benefits (and misrepresenting what is in the bill) should be read as coded opposition to eliminating current overpayments to Medicare Advantage plans and other efforts to reduce Medicare spending  — measures that form an important part of the financing of the Senate bill.

This wouldn’t be such a problem if the Senate weren’t already having such a difficult time agreeing on revenue options.

But attacks on the current financing mix continue, especially from medical device manufacturers concerned about new fees they would have to pay, and from unions and progressives unhappy with the proposed tax on insurers who offer high-cost plans.  This tax is almost certain to be passed on to enrollees and would fall disproportionately on states with high health care costs and firms with older workers.  Senate negotiators are working to modify both of these revenue sources but the struggle will be not to lose revenue in the process.

Read the rest of the Health Reform Insider here.