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The debate has grown increasingly polarized now that the reform proposals are coming under closer scrutiny from the five relevant House and Senate committees and other legislators. Of the five panels, the Senate Committee on Health, Education, Labor, and Pensions (HELP) was the first to begin marking up a reform bill. Over 10 days of committee meetings, Democrats repeatedly wielded their 13-to-10 majority to defeat Republican amendments that would have eliminated a new public insurance plan designed to compete against private carriers, removed a mandate for all but small employers to offer coverage to their workers, and limited eligibility for coverage subsidies to people at or below 250% of the federal poverty level, as opposed to the 400% that remains in the bill. That bill was passed by the committee on July 15 on a straight-party-line vote of 13 to 10.
The absence of the committee's chair, Senator Edward Kennedy (D-MA), who is fighting brain cancer, has made it more difficult for Democrats to attract Republican support for key reform provisions. Kennedy has a long track record of striking compromises with Republicans, particularly with Senator Orrin Hatch of Utah, who serves on both the HELP Committee and the Senate Finance Committee.
Meanwhile, the schedule of the Senate Finance Committee has slipped as its chair, Senator Max Baucus (D-MT), has strived to attract some Republican support without losing Democrats. The three House committees — Education and Labor, Energy and Commerce, and Ways and Means — introduced a 1018-page bill that was crafted by their respective chairs (Democrats George Miller and Henry Waxman, both of California, and Charles Rangel of New York) and their staffs. The chairs expect the measure to garner little or no Republican support, but given Democrats' decided advantage in the House (255 to 178, with 2 vacancies), they could enact a bill if the vote follows party lines. A strict party-line vote seems unlikely, however, given the "strong reservations about the process and direction of the draft . . . proposal" that were expressed in a letter sent to the party's House leadership on July 9 by the self-described 51-member "fiscally conservative Democratic Blue Dog Coalition." Nevertheless, Obama applauded introduction of the bill, characterizing it as a "proposal that will lower costs, provide better care for patients, and ensure fair treatment of consumers by the insurance industry." Obama said the measure would provide coverage to 97% of all Americans.
In many respects, the bills under consideration by the HELP Committee and the House committees are similar and reflect the principles set out by the administration. Through mandates on employers or individuals, the bills would require most Americans to carry health insurance or pay penalties. People of limited means would receive government subsidies for coverage. A public insurance plan would be created, as would health insurance exchanges through which people without access to employer-based coverage could choose a health plan.
Though Democrats do not unanimously support a new public plan (some are open to the creation of not-for-profit cooperatives, whereas others would settle for a more tightly regulated private insurance sector), the liberal wing of the party considers a public plan an imperative. Its advocates have begun to run advertisements attacking Democratic lawmakers who have not embraced a public-plan option. Democrats' sensitivity regarding this option was highlighted when, after White House Chief of Staff Rahm Emanuel told a reporter that the creation of a public plan was "negotiable," Obama issued a correction from Moscow.
But the most difficult issue facing legislators — and dividing House and Senate Democrats — is how to pay for reform, which is expected to cost around $1 trillion over a decade. On June 9, Baucus told reporters that taxing employer-provided insurance premiums as income would be "perhaps the best way to raise money for an overhaul of the health care system." The Joint Committee on Taxation, a congressional panel, estimates that taxing such benefits above the value of the Federal Employees Health Benefit Program, as Baucus envisions, would generate about $420 billion over 10 years. But under pressure from organized labor and other influential interests, Senate Majority Leader Harry Reid (D-NV) and House Speaker Nancy Pelosi (D-CA) soon came out against the idea, compelling Baucus to return to the negotiating table.
The newly introduced House bill would raise an estimated $544 billion over 2011–2019, according to the Joint Committee on Taxation, by levying a 5.4% surtax on the income of married couples that exceeds $1 million and on people who earn more than $800,000 a year, a surtax of 1.5% on couples making between $500,000 and $1 million a year, and a surtax of 1% on couples making $350,000 to $500,000 a year. Democrats said the party's House leadership supported the tax increases, which were influenced by Obama's pledge to protect middle-class families from higher taxes. According to summaries of the bill, the measure would cut Medicare spending by $500 billion over a decade to help pay for reform. On July 10 — reflecting the uncertainty of the Senate Finance Committee about tax increases — Baucus set out a dozen possibilities, including cutting billions of dollars in tax breaks for hospitals.1
Another issue that could slow progress on reform — wide regional variations in per capita Medicare spending — has long festered without resolution. But it burst into the limelight in June, thanks to a New Yorker article2 comparing one of the country's most expensive health care markets, McAllen, Texas, with El Paso, Texas, where medical spending is half as high. Obama discussed the article at a White House staff meeting, and it has provoked members of Congress from affected states to demand action. During a July 8 meeting of the House Democratic caucus, Representative Betty McCollum (D-MN) pointed out that providers in Minnesota and other states where per capita Medicare fee-for-service payments are below the national average and quality of care is generally higher are penalized by Medicare's reimbursement formula. For example, between 1992 and 2006, overall Medicare spending, adjusted for inflation, rose by 3.5% annually, but in Miami such spending rose by 5.0% annually, as compared with 2.3% in Salem, Oregon, and 2.4% in San Francisco.3
In a letter to Pelosi, House Majority Leader Steny Hoyer (D-MD), the three House committee chairs, and 21 House members from Idaho, Kansas, Maine, Minnesota, Montana, Nebraska, New Hampshire, North Dakota, South Dakota, Utah, Virginia, Washington, and Wisconsin requested a meeting to discuss "the current inequities in Medicare reimbursement." It will be very difficult," they wrote, "for us to support legislation that ignores this critical issue and allows our states to continue to be penalized by an outdated Medicare formula."
Whereas interest groups representing hospitals and the pharmaceutical industry have been very visible in the reform dialogue, organized medicine has maintained a lower profile. Sixteen physicians (11 Republicans and 5 Democrats) are members of Congress, but they hold diverse views on health care reform, and none hold a position of leadership on a health-related committee.4 The hard bargaining has barely begun, but the principal focus of organized medicine has been on eliminating an across-the-board 21% reduction in Medicare's fee-for-service payments to physicians that, under the sustainable growth rate formula, is scheduled to go into effect on January 1, 2010. There is little doubt that Congress will prevent that cut, but it is uncertain what trade-offs legislators might demand in return. The House committees' bill would replace the sustainable growth rate formula with a formula providing higher fee-for-service reimbursement for physicians who deliver primary care services.
Despite Democratic unrest and Republican opposition, Democratic leaders insist that Congress will approve reform legislation quickly, but it now seems unlikely that both houses will vote before their summer recess in early August. The Democrats' stance seems similar to that of Republicans in 2003, when President George W. Bush exhorted his congressional allies to pull out every stop to win enactment of a Medicare prescription-drug benefit. Republicans held the House vote open for almost 3 hours in the middle of the night in an effort to coerce several of their colleagues to vote for passage. The measure was approved by a vote of 220 to 215.5 By enactment, Republicans added an unfunded trillion-dollar liability, over a decade, to the federal deficit. Democrats are equally determined to wield their majorities on behalf of a reform that moves toward universal coverage, introduces new innovations into health care delivery, and incorporates other party priorities. Their reform effort, whether or not it succeeds, will play out over most, if not all, of 2009.
Source Information
Mr. Iglehart is a national correspondent for the Journal.
This article (10.1056/NEJMp0905045) was published on July 15, 2009, at NEJM.org.
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