Health Care Reform Update

The following is a fairly comprehensive update (from the Big “I”) on where things stand with the Health Care Reform debate that continues in Congress.  The next couple of months will be extremely important for all.  Take a few minutes to review what is expected to happen from here:

With House and Senate members back in their districts and states for much of last week, there was very little health care reform movement in Washington. Senate Majority Leader Harry Reid (D-NV) continues to hold hope that the Senate will begin debate on the merged Finance/HELP Committee bill this week. However, that timeframe is looking less likely since, at press time, Reid is still awaiting a cost estimate and analysis from the Congressional Budget Office (CBO) and has yet to circulate the bill’s text to even his own caucus. Given those circumstances, this week’s update gives us an opportunity to assess the winter forecast for health care reform.

Conventional Forecast: The Senate begins consideration of the merged Finance/HELP Committee bill possibly this week but more likely the week of November 30th. The health care reform debate is anticipated to consume at least 3-4 weeks, meaning the Senate will be hard pressed to conclude debate prior to the December holiday recess. Following Senate passage of the bill, either just before the holiday recess or in early January, the House and Senate will each appoint members of their respective chambers to serve as conferees for a House/Senate conference to negotiate a final compromise bill. After a majority of conferees reach agreement on a conference report, likely sometime in January, the House and Senate will each vote on the conference report and then send it to the White House for the President’s signature.

Unconventional Forecast: The Senate begins consideration of the merged Finance/HELP Committee bill possibly this week but more likely the week of November 30th. After 3-4 weeks of debate, Senate Majority Leader Harry Reid (D-NV) is unable to attract the necessary 60 votes to invoke cloture and end debate on the bill. At that point, Reid pivots and invokes the partisan budget reconciliation process to consider the bill. In this year’s congressional budget resolution, Democratic Leadership inserted language giving them the option to utilize the budget reconciliation process to consider health care reform legislation. The budget reconciliation process is typically reserved to legislate policy changes in mandatory spending or revenue programs. Under it, debate is closed after 20 hours in the Senate and it only takes a mere 51 votes to pass a bill. Aside from political considerations, the major drawback to using the reconciliation process is that provisions included in the bill must have a budgetary effect (either increase or decrease revenue). If they do not have a budgetary effect, they are subject to a point of order in the Senate and it takes a super majority of 60 votes to keep the extraneous provision in the bill. Senate parliamentary experts have suggested this route would likely have the effect of turning the health care reform bill into swiss cheese as many key provisions would be subject to a point of order and stricken from the bill. With all of that said, should the Senate proceed down this path, they would pass a bill with 51-plus votes, and then ship the reconciliation bill to the House for a vote. Following House passage, assuming the House does not amend the bill prior to passing it, the bill would be sent to the White House sometime in January for the President’s signature.

Other news… On Friday (11/13), the Centers for Medicare and Medicaid Services (CMS) issued a report analyzing the House-passed health care reform bill. In the report, CMS estimates that the House-passed bill would increase health care costs over the next decade by $289 billion. This number will be cited often over the next several weeks as proof that the House bill fails to bend the cost curve.

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