Senate Finance Committee begins "painful" mark-up phase

Yesterday, the Senate Finance Committee began the mark-up phase on their bill, entitled "America's Healthy Future Act of 2009." The "mark-up phase" is a procedural process the Senate goes through to review and revise a piece of potential legislation. We say "painful" because negotiations began with over 500 proposed amendents from conservative, moderate and liberal members of the Senate Finance Committee. Each potential amendment must be discussed and voted on. One can only imagine how much caffeine it will take to endure the mark-up phase of this particular bill.

One component being discussed is the requirement that all individuals obtain medical insurance. The original bill provided a premium subsidy to help lower-income individuals comply with this mandate. Originally, the subsidies were designed to cap insurance premium costs on a sliding scale from 3% of household income, for those at 100% of the Federal Poverty Level (FPL), to a maximum of 13% of household income for a family earning 300% of FPL

To satisfy the concern that this would still create a significant cost burden for middle-America, the proposal was modified and expanded. The new proposal would lower the minimum cap to 2% of household income for those at 100% of FPL, and allow families earning up to 400% of FPL to participate in the subsidy. Essentially, a family of four earning $88,200 could still qualify for a minimal subsidy. Although Baucus' bill was the least expensive alternative to the bills proposed thus far in the House and Senate, it appears likely that the $850 billion cost estimate will change as the mark-up phase continues over the next few weeks.

To illustrate how the subsidies will work and to see which income levels will qualify, click on the calculator below from the Kaiser Family Foundation website. Plug in various income levels, ages and family vs. individual coverage status to create different scenarios. Pay particular attention to the increase in subsidy amounts available to different age groups and income categories.


http://healthreform.kff.org/Subsidycalculator.aspx

Great piece on how histroy may view reform

http://alankatz.wordpress.com/2009/09/14/history-will-ignore-much-of-todays-health-care-reform-headlines/

Also much more to come next week--debate starts on the 22nd of this month for mark-up on Americans Healthy Future Act.http://finance.senate.gov/press/Bpress/2009press/prb091609a.pdf

The furor is starting to die down and the creation of a bill that Obama will sign is starting to take form.

More to come.

Points from Senate Finance Bill and how it might play out

Max Baucus and Senate Finance have released an overview of their reform bill--which will be released in full next week. Impact to employers:

• Tax credits to employers with less than 25 employees--35% for 2 years then expanded after that with credits for employees with wages under $40,000.
• Creation of purchasing "Exchanges"
• Elimination of "Mini Med or Limited health benefit" plans
• Small group reform--less than 50 employees in 2013 and less than 100 by 2017. Requires guaranteed issue, no pre-X, etc.
• Rating variations only for tobacco use (1.5:1), Age (5:1) and geography(7.5:1)
• Benefit option standards and minimum benefits(including a "young invincibles policy!)
• 2013 individual requirement mandate--with penalties based on FPL--maximum of $3800 for a family.
• 200 or more employees--employer must enroll all employees (with few caveats)
• Requirement for employers with more than 50 employees to pay premium or a fee. Employees can opt out if on Medicaid or cost to employee exceeds 13% of income.

There is much more--but this is an introduction. This is not law and it can and most likely will deviate. Nonetheless, this give us some insight as to what things might look like.

One other note--President Obama has created a unique situation in offering to compromise--this allows him to utilize that offer and if rejected by Republicans to be comfortable in using budget reconciliation to proceed with health care reform. Want to know more--check out this quick strategy article.

http://thehill.com/homenews/administration/58233-obama-sets-stage-for-using-budget-maneuver-to-pass-health-reform

The Baucus Health Reform Proposal

U.S. Senate Finance Committee Chairman Max Baucus (D-MT) unveiled a summary of a detailed health care overhaul proposal that he and other members in the Committee's bipartisan "Gang of Six" have been negotiating over the last several months.

While this is the only significant reform proposal assembled with significant Republican input, Baucus was unable to persuade his "Gang of Six" negotiators to endorse the nearly $900 billion plan, which does not include many provisions that liberal lawmakers are clamoring to see in a final measure. The Republican most likely to sign onto the plan, Senator Olympia Snow (R-ME) said that she will wait to hear what the president has to say in tonight's joint session of Congress before making a final decision on the bill. She expressed worried about the burden that expanding Medicaid eligibility would impose on state governments. Aides to Senator Mike Enzi, (R-Wyo) another member of the "Gang of Six," said that he does not care for a plan that would tax insurance companies that sell costly policies, or for a proposal that would impose a $6 billion annual fee on insurance companies based on their share of the market.

Senator Baucus indicated today that he will put out a Chairman's Mark of legislation early to mid-next week and move the Finance Committee to mark-up health care reform the week after next.

Obama may detail "his" health reform plans soon

In today's Washington Post, an article from the Associated Press commented on the likelihood that President Obama would more clearly detail his goals for what should be the "essential elements" in a healthcare reform bill. This new "hands-on" approach would signal a shift in strategy and would possibly occur before the September 15th deadline the White House gave to Senate negotiators to design a bi-partisan bill.

Many insiders feel that the President gave too much leeway to Congress. Many feel that the August recess has been more damaging to the President than helpful. General concensus is that while he will likely not offer new proposals, he will be more specific about his top priorites in a healthcare reform bill.

Check out the article at: http://www.washingtonpost.com/wp-dyn/content/article/2009/09/01/AR2009090103430.html