Issue # 8: March 16, 2010

What is Happening with Health Care Reform?

Quite a lot. After more than a month long hiatus, health care reform has returned full force. Reform efforts had come to a virtual standstill following the special election of Scott Brown (R-MA) on January 19 to fill the seat of the late Senator Ted Kennedy. The election of Republican Scott Brown eliminated the Democrats’ 60 vote super majority needed to stop a filibuster of health care reform legislation in the Senate.

At the end of February, President Obama began his final push to secure enactment of comprehensive health reform legislation. He urged Congress to schedule a vote on his proposal, which includes the Senate bill that was passed on Christmas Eve as well as some Republican proposals. The Senate’s bill includes many provisions that would greatly benefit people with intellectual and developmental disabilities (discussed below). 

The next several days will make or break health care reform.  As of today, the likely steps are as follows:

1. Late this week, the House will vote to simultaneously approve a reconciliation bill which includes fixes to the Senate bill and “deem” the Senate bill to be passed.  Some members want to use the “deem and pass” process to avoid having their votes on the “unfixed” Senate bill used against them in the midterm elections.  

2. If the House approves a reconciliation bill and “deems” the Senate bill to be passed, then the Senate will debate and vote on the reconciliation bill. 

3. If the Senate passes the reconciliation bill, then President Obama will sign it into law.

What is Reconciliation?

“Reconciliation” is the shorthand term for budget reconciliation. The budget reconciliation process was created in 1974 and established many of the modern rules that Congress follows to pass the annual budget.

Congress begins by passing a budget resolution every year that serves as a blue print for federal spending. The budget resolution provides the total amounts for large programs (e.g., national defense, agriculture, and Social Security). The various Congressional appropriations committees then work with these totals to decide how to divide up the funding among the subprograms (e.g., vocational rehabilitation, section 811 housing) and write their specific parts of the annual budget bill.  

The reconciliation process is used to bring entitlement programs (e.g., Medicaid, Medicare, and Social Security) into line (i.e. reconcile) with the budget resolution.


Why is Reconciliation so Important for Health Care Reform?

Within these budget resolutions, instructions can be given to specific Congressional committees to create legislation that would alter current laws affecting spending and/or taxation in order to conform to the targets set out in the budget resolution. (Health care reform would certainly affect spending and/or taxation).

The reconciliation process has different rules regarding amendments and debate in the Senate as outlined below:

The bottom line is that the reconciliation process would make it much easier to get health care reform legislation passed in the Senate.  It would disallow unrelated amendments and would take fewer votes to stop debate.  

So What is the Problem Then?

There are four main challenges right now:

Controversial Mechanism. Republicans and some Democrats alike have objected when legislation they opposed has passed through the reconciliation process. (Reconciliation has been used in the past for 22 bills, of which 19 bills were signed into law by the President.) Some conservatives claim that health reform is about more than federal spending, that it is a fundamental overhaul of the nation's health system.  They argue that the reconciliation process was only intended to be used for legislation directly related to meeting budget resolution spending and revenue goals. Democrats have countered that reconciliation is an appropriate mechanism in light of the unanimous opposition by Republicans to health care reform.

Partisanship. At present, not a single Republican has offered to support the President’s plan as they prefer an incremental approach. From the disability community’s perspective, incrementalism in health reform will not work because all of the critical insurance market reforms (e.g. eliminating pre-existing condition clauses) which are among the community’s highest priorities, can only be achieved through a universal mandate. Without such a mandate, premiums for everyone who currently has health coverage would skyrocket.  Republicans oppose the universal mandate.   President Obama, many Senate Democrats, and health reform stakeholders sought Republican support for comprehensive reform throughout the yearlong process. In addition, policy makers agree that given that the health care reform bill will be implemented over a number of years by the Secretary of the Department of Health and Human Services (HHS), who is appointed by the President, it would be far better to have bi-partisan support in the event of a Republican winning the presidency in 2012.

Division among Democrats. Senate and House majority whips are furiously working to get as many Democrats to vote for the Senate bill as possible. Several Democrats have not stated their positions or are considering not supporting the President’s plan over concerns about the lack of a public option and provisions on immigration and abortion. In the House, the Democrats can only afford to lose 37 votes to get the bill passed, and, according to one press report, as of March 15, there are 36 House members who have stated that they will vote no or have not stated their position. Meanwhile in the Senate, leaders are working to get assurances from 51 Senate Democrats that they will vote for the reconciliation bill.  House Speaker Pelosi needs these specific assurances to ease the concerns of wavering members of the Democratic caucus who fear voting for the Senate bill will hurt them in the upcoming midterm elections because it includes provisions which give special treatment to specific states. Most of those provisions will be removed in the reconciliation bill.

Budget Estimate.  Late last week the Congressional Budget Office (CBO) lowered the projected savings for the Senate health reform bill.  Republicans say the new estimate means that the health care reform legislation will either raise the deficit or the government will have to "raid" the Social Security Trust Fund and the CLASS Independence Fund to pay for part of reform. CBO now figures the bill would reduce the deficit by $118 billion over 10 years, down from the earlier $132 billion in estimated savings. But the new savings estimate is less than the $122.2 billion that is supposed to come from Social Security and the Community Living Assistance Services and Supports Act. (The CLASS Act is supposed to generate $70.2 billion in revenue, and health reform is supposed to increase the surplus in the Social Security Trust Fund by $52 billion.) "Thus the bill either 'raids' the Social Security Trust Fund or the new CLASS Independence Fund for revenues to spend on a massive new health care program ," an e-mail from the Republican Policy Committee states. However, money from those two programs is not supposed to pay for other parts of the bill. "The additional surplus in the Social Security Trust Fund generated by this Act should be reserved for Social Security and not spent in this Act for other purposes," section 1563 (page 392) of the bill states, and "the net savings generated by the CLASS program should be reserved for the CLASS program and not spent in this Act for other purposes."


What is in the Senate Bill, the Patient Protection and Affordable Care Act (H.R. 3590)?

Among other things, the Senate bill would:
1) establish a mandate for most residents of the United States to obtain health insurance;
2) set up insurance exchanges through which certain individuals and families could receive federal subsidies to substantially reduce the cost of purchasing that coverage;
3) significantly expand eligibility for Medicaid with substantial federal financial support;
4) impose an excise tax on insurance plans with relatively high premiums; and
5) make various other changes to the federal tax code, Medicare, Medicaid, and other programs.


What are the Provisions that are Most Important for People with Intellectual and Developmental Disabilities?

Coverage

·        Prohibiting private health insurance exclusions for pre-existing conditions.

·        Eliminating annual and lifetime caps in private insurance policies;

·        Restricting the consideration of health status in setting premiums.

·        Expanding Medicaid to cover individuals with incomes up to 133 percent of the federal poverty line (approximately $29,000 per year for a family of four).

Benefits

·        Ensuring that minimum covered benefits include products and services that enable people with disabilities to maintain and improve function, such as rehabilitation and habilitation services and devices.

Access to Quality Care

·        Improving training of physicians, dentists, and allied health professionals on how to treat persons with disabilities.

·        Requiring the Centers for Medicare and Medicaid Services to collect data on beneficiaries with disabilities access to primary care services and the level to which primary care service providers have been trained on disability issues. Ensuring prevention programs include a focus on individuals with disabilities.

Long Term Services and Supports

• Increasing the federal share of Medicaid, known as the Federal Medical Assistance Percentage (or FMAP), for home and community based services (HCBS) and during periods of economic downturn.
  
• Allowing states to offer additional services under the 1915(i) Medicaid HCBS Waivers State Plan Option.
  
• Provide spousal impoverishment protections for HCBS Beneficiaries.
  
• Strengthening long-term services and supports through a two pronged approach:
  1) Taking pressure off of the Medicaid program
  The Community Living Assistance Services and Supports (CLASS) Act would create a national long term services insurance program which assists eligible individuals and their families to meet long term needs with a cash benefit and without forcing them into poverty to receive Medicaid benefits.
  2) Improving the Medicaid program:
  The Community First Choice Option would help to eliminate the institutional bias by encouraging state states to cover personal attendant services under the state’s optional service plan instead of through the waiver system by offering a 6% increase in the federal share of Medicaid for these services.

What Next?

We can expect action in both House this week. Already there are extremely heated debates among the grassroots, with some conservative activists charging that the plan is socialist and liberals claiming that the bill is a sell out to the insurance industry since there is no public option. Large interest groups have spent over $20 million this month alone lobbying for and against health care reform.

Very soon we will be asking chapters of The Arc and Affiliates of UCP to take action to support the president’s plan. The opposition is already very vocal. We must personally get involved to make sure that health care reform for ALL becomes a reality.