Baucus Bill Passes 14-9

Members of the Senate Finance Committee today voted 14-9 to pass the "chairman's mark" of the America's Healthy Future Act bill.

All Democrats on the panel voted for the bill, and Sen. Olympia Snowe, R-Maine, was the only Republican to cross party lines to vote for it.

"Is this bill all that I want?" Snowe asked. "Far from it. But when history calls, history calls."

Snowe said she was voting to continue the process of working on the health reform issue; that she has grave concerns about what might happen when the AHFA bill is merged with the HELP bill, and when a health bill goes to the Senate floor; and that she might not vote for the health bill that emerges on the Senate floor.

The vote came after another long AHFA bill markup session.

The chairman's mark of the AHFA bill, an alternative to a health bill developed by the Senate's Health, Education, Labor and Pensions Committee, was developed by the Finance Committee staff under the direction of Senate Finance Committee Chairman Max Baucus, D-Mont. The committee sent a heavily revised version to the Congressional Budget Office and the Joint Committee on Taxation for review Oct. 2. The CBO released an analysis of the possible effects of the proposal on the federal budget deficit Oct. 7. The bill returned to the Finance Committee today for a final committee vote.

Now that the committee has approved the AHFA proposal, Senate leaders plan to combine it with the HELP bill, then bring a combined bill to the Senate floor for debate.

Baucus noted that the committee had spent more time on marking up the bill draft than it had spent on any single piece of legislation in decades.

He led the Finance Committee in singing "Happy Birthday" to Sen. Maria Cantwell, D-Wash., who responded by joking that she thought the process of drafting the AHFA bill would go on so long that the committee would end up celebrating the birthday anniversaries of all of its members.

Republicans on the committee blasted the draft and the process that produced it.

"We tried to take the chairman's mark in a different direction," said Sen. Charles Grassley, R-Iowa, the highest-ranking Republican on the committee. "We were rebuffed at every step."

Sen. Jim Bunning, R-Ky., complained that the committee had not sent the Congressional Budget Office analysts – who were in charge of estimating the effects of the bill on the federal budget deficit – the final statutory language.

Sen. Jon Kyl, R-Ariz., said that, in some cases, the CBO used assumptions that appear to be different than those included in the bill draft summary. The CBO, for example, assumed that a proposed fine that would be imposed on people who fail to buy health coverage would increase along with inflation, but the AHFA summary shows that the fines would not be indexed.

Because of the omissions, "the estimated cost of the bill is incorrect," Kyl said.

Sen. Orrin Hatch, R-Utah, said the process of reviewing the bill has been too rushed for the CBO to prepare an analysis of how the bill might affect insurance premiums.

Hatch also pointed to a prediction in a Joint Committee on Taxation analysis that the combined effects of various components of the bill might increase the marginal tax rate for a family of 4 with $34,200 in annual wage income to 59%, meaning that, after subtracting federal taxes and health costs, the family would get to keep only 31 cents of every dollar earned over $34,200.

Sen. Pat Roberts, R-Kan., questioned the credibility of AHFA proposal provisions that call for the government to hold down the rate of increase in Medicare provider payments each year. In reality, whenever Congress has tried to impose similar provider payment increase slowdown in the past, it always has come back and voted for a funding supplemental, he said.

"I think this is where the big shell game comes in," Roberts said.

On paper, Medicare funding may hold steady, and benefits may remain roughly the same, but providers will be dropping out of the program, Roberts said.

Sen. John Ensign, R-Nev., complained about the lack of a CBO estimate of the effects of the AHFA proposal on overall health care costs. "We haven't brought health care costs down with this bill," he said.

Sen. Michael Enzi, R-Wyo., praised Baucus's work on the bill but noted that many of his constituents find the bill confusing, partly because detailed legislative language is not yet available.

Many people on Medicare, for example, wonder why Congress seems to be shifting Medicare funding to other uses while at the same time creating a commission that will look at ways to save Medicare from insolvency, Enzi said.

Doctors want to know why the Medicare commission will be looking at their reimbursement rates but not at hospitals' reimbursement rates, and they also want to know what Congress will do about the medical malpractice issue, Enzi said.

"They're really not seeing us doing anything about tort reform," Enzi said.

In addition, the bill does not do anything to lower the cost of health care for working, insured Americans, and it may increase their costs by creating too high a standard for what will constitute the kind of "creditable coverage" that consumers must own to meet individual coverage requirements, Enzi said.

Enzi also echoed Roberts' comments about the long-term effects of efforts to hold down Medicare reimbursement rates on Medicare network provider participation rates.

"If you can't see a doctor, you don't have health care," Enzi said.

Some Democrats slammed critics of the AHFA bill draft.

Sen. John Kerry, D-Mass., accused America's Health Insurance Plans, Washington, of using an incomplete, distorted description of the bill when it commissioned an analysis of the bill's effects.

The AHIP analysis is an example of "politicking for corporate gain at its worst," Kerry said.

How well health insurers end up doing after health reforms are implemented should not be a concern, Kerry said.

"Health insurers have been laughing all the way to the bank while people suffered," Kerry said.

Health insurers' interest in earning a profit is understandable, but wanting to "cherry pick the least risk" is not a good approach to providing health coverage, said Sen. Ben Nelson, D-Fla., a former insurance commissioner.

"It's not surprising that they come out at the eleventh hour with a report that says that this thing is all flawed," Nelson said.

Some say the United States needs to rely on private-selector health system solutions, but "the system we have is a private system, without government oversight, and it's not working," said Sen. Robert Menendez, D-N.J.

"A vote against the bill is to be for the status quo," Menendez said. "The status quo some of our colleagues are trying to protect is a health insurance Ponzi scheme."

Sen. Kent Conrad, D-N.D., argued that leaving the health finance system in its current state is not an option.

If current cost increases continue, the country soon will be spending 33% of gross domestic product on health care, up from about one-sixth of GDP today, Conrad said.

"That is unsustainable," Conrad said.

Sen. Blanche Lincoln, D-Ark., said she will vote for the current AHFA draft but is not guaranteeing that she will vote for future health bills. She said she will be asking questions about any given proposal such as, "Does it increase the deficit?" and, "Does the legislation promote choice?"

Lincoln also emphasized that she is joining with 7 other senators to ask that Senate Majority Harry Reid, D-Nev., ensure that the complete text of any bill and a complete Congressional Budget Office budget analysis are posted online before the Senate proceeds to a final vote.

A video recording of the hearing will be available here.

Baucus Bill Passes 14-9

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Baucus Bill Passes 14-9

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