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  Work on a Combined Senate Health Care Reform Bill Continues  

Senate Majority Leader Harry Reid (D-NV), Finance Chairman Max Baucus (D-MT), and former Acting HELP Committee Chairman Chris Dodd (D-CT) continue their closed-door negotiations with the administration and other key senators to combine the two-committee-passed comprehensive health reform bills into one piece of legislation for Senate floor consideration. While the trio originally hoped to have a bill finalized by next week, it now appears unlikely that one will materialize before the week of November 2. Floor debate on a combined measure is being estimated to last anywhere between three to eight weeks.  

One milestone toward achieving a combined bill was met this week when the Finance Committee released the legislative language to go along with the conceptual mark it passed on October 13. NAHU’s comparative analysis of the Finance bill and the Senate HELP Committee bill and H.R. 3200, which has been updated to reflect the new bill language, can be found here.

It has been widely reported that Reid is pushing for a public option component to the bill, but it is unclear whether the votes can be found. One possible compromise is a limited public option with the opportunity for states to opt out, or to give each state the ability to create a public plan under set criteria if they so choose. Reid met with several centrist Democrats trying forge compromise on this issue today. Speaker Pelosi is faced with the same difficulties in her caucus as she grapples with discord among her various Democratic constituencies.

NAHU has been focusing a great deal of effort through coalition partners, behind-the-scenes communications and Hill visits on technical areas of the bill that could be improved as the two measures are combined. We have also taken the lead on drafting a letter from the joint Agents and Brokers Alliance that will be delivered next week on all of the issues we would like to see addressed in a combined bill. Furthermore, this week, we are asking our members with specific practice/market area expertise to send Operation Shout letters to their senators about specific topics in a combined bill, such as Medicare, Long-Term Care and account-based plans like HSAs and FSAs. We also have a letter for all members to send that addresses our overall concerns about the shape of health care reform legislation. 

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Senate Democrats Fail To Muster Enough Votes for Medicare Doctor Fix



On Wednesday, the Senate Democratic leadership suffered a significant defeat when they fell far short of obtaining the votes needed to pass a measure to restore provider payment reimbursement levels in Medicare over a 10-year period. Senate Majority Leader Harry Reid (D-NV) brought the controversial measure, S. 1776, offered by Senator Debbie Stabenow (D-MI), to the floor as a means of excluding the cost of the provider fix from comprehensive health reform legislation. However, the $247 billion dollar bill did not have a funding offset, so it was widely criticized by both Republicans and Democrats alike as fiscally irresponsible and a blatant means of evading President Obama’s pledge of only signing deficit-neutral health reform legislation into law. The legislation was defeated 53-47 on a cloture motion, with 12 Democrats and Independent Senator Joe Lieberman (I-CT) joining with the entire Republican caucus in opposition. 

This defeat is significant to the overall health care reform debate for several reasons. First of all, it signals how fragile Reid’s hold is over his Caucus, and how the views of moderates and deficit-hawks need to be considered as the Senate prepares to consider much more costly and comprehensive health reform legislation on the floor next month, particularly on issues relative to government spending and the overall affordability provisions in the legislation. Also, by requiring the Senate to address provider reimbursement issues within the context of the larger reform bill (the Finance-passed measure contains funding for a one-year fix), the Democrats negotiating the details of a merged bill have less money to work with. This could mean limitations on some of the more costly and controversial provisions under consideration, like a government-run public plan. Finally, it shows the limits on the influence of the American Medical Association; which did heavy grassroots and advertising to support the measure, as they considered it to be a top priority and critical to the success overall health reform. Had it passed, they were widely expected to give a ringing endorsement to the overall reform bill. 

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Antitrust Exemption Discussions Continue


Efforts to eliminate the limited antitrust exemption of insurers provided by the McCarran-Ferguson Act continued this week, with the House Judiciary committee voting 20-9 in favor of H.R. 3596, The Health Insurance Industry Antitrust Enforcement Act of 2009, which would eliminate the exemption to ban insurers from engaging in price-fixing, bid-rigging and market allocation. Democratic members on both sides of the Capitol indicated this week that they would like to include such provisions in a broader health reform measure. 

However, the problems that these measures are trying to remedy (price-fixing, bid-rigging and market allocation) are already illegal. The McCarran-Ferguson Act provides only a limited antitrust exemption under federal law, has no impact on state antitrust laws, and does not, in any way, address health insurance market concentration or competition issues. Health insurance carriers use the current exemption mostly to share data on fraud to better combat the crime, and to share information on the brokers and agents who sell policies. The exemption also allows standardization of risk classification and policy forms, and joint underwriting ventures. All of these things benefit consumers by improving insurer efficiency, which means reduced administrative costs and ultimate savings for all insurance consumers. Thus, the net effect of the legislation would be a weakening of consumer protections and cost savings provided by strong state-level regulation. NAHU’s issue summary in this topic can be found here.

NAHU views these efforts as a political trick designed to distract from the true problemthe rising cost of medical care. The current bills on the table do little to reduce actual medical care costs, which are the true drivers of increasing health insurance premiums. In addition, as currently structured, above and beyond their extraordinary costs to the federal government, these reform bills would not only substantially raise private health insurance premium rates for millions of American consumers and employers by imposing new rating requirements, costly mandates and excessive taxes and fees, but will also fail to ensure adequate risk-spreading or motivate all Americans to maintain continuous coverage.

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House Votes Not There for a Robust Government-Run Public Plan Option


Speaker of the House Nancy Pelosi (D-CA) reportedly was planning to release a bill next Tuesday or Wednesday that combined the various versions of H.R. 3200 with a dramatically reduced price tag and a “robust” government-run public plan option. However, it is now being reported that the Speaker, who is known to be a skilled vote-counter, learned Thursday night that she does not have the 218 votes her preferred “robust” public option. In a press event today she acknowledged that while she was not abandoning the public option, House leaders may need to go with a softer alternative when they consider the realities of what can be passed through their own Chamber and successfully negotiated into a final  bill with the Senate.

This realization shows the strength of the moderate Democrats in this process, and also makes the possibility of a public option trigger more likely. The measure, which has been proposed by Senator Olympia Snowe (R-ME) and recently endorsed by President Obama, would allow for a public option to be created in a certain number of years time if certain goals relative to coverage and affordability are not met by the private market. But Senate liberals insist that a trigger mechanism will only work if it is triggered. It may also lead to a more limited public option, as is reportedly being considered by the Senate Democratic leadership, to create a national public plan but allow states to “opt out.” In any case, we are now unlikely to see House floor action on a combined measure until the week of November 6 at the earliest, as Pelosi continues to negotiate with all sides of her fractured caucus.

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Many of you have asked how you can help contribute more to the association during these momentous times. The next few months will be the most intensive of times for our association's government affairs efforts. We have every reason to believe that health system reform legislation will move forward, and we need to preserve the role for agents and brokers and ensure continuance of the private market. GRIP is a voluntary donation program created some years ago for our legislative expenses at the national level that we have reinstated to help defray the costs of our current lobbying efforts.

We are now soliciting both individual and chapter contributions to GRIP, and would greatly appreciate any additional help as there is still much to be done on the legislative and regulatory front.

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