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Temperatures are close to the boiling point on Capitol Hill as debate rages in Congress over the future of the U.S. health care system. Derided as a socialist government takeover by the right, and touted as a long-needed reform of a monopolized, corrupt and insufficient system which claims the lives of nearly 45,000 Americans each year by the left, the fight for a full revamping of American health care has proven to be the largest challenge yet for the fresh Obama administration and the new Democratic supermajority in Congress. And with the Senate racing to vote on a health care bill before it adjourns for the holidays, it has also become one of the most complex and fastest-changing political issues of the day, dominating Politics headlines. With all of this confusion (not to mention the staggering length of the legislative documents themselves), it's easy to get lost in the shuffle. In this piece, I will attempt to break down the two health care bills—the Affordable Health Care for America Act, which has already passed the House, and the bill still under debate in the Senate—to explain their main components and what effects they could have on the health care industry, as well as describing the struggle currently being fought in the Senate over its version of the bill.
I. The House bill
On November 7th, the House of Representatives passed the Affordable Health Care for America Act, H.R. 3962. The bill is an effort to impose stricter regulations on the private health care industry, significantly expand American health insurance coverage, and control rising health care costs. It seeks to accomplish these three overarching goals through a number of key provisions.
Health Care Regulation
Perhaps the most important provision related to regulating the current health care market is the definition, in Title II, of a “Qualified Health Benefit Plan” (abbreviated QHBP). For a private health insurance plan to qualify as a QHBP, it must meet a number of minimum standards of care as specified by the bill.
First and foremost, these standards require that the plan in question guarantees individuals acceptance into the plan and continued renewal without regard to the individual's current health or medical history, ban denial of coverage based on pre-existing medical conditions, and ban rescission of services except under certain extraordinary circumstances such as fraud (but never relating to changes in medical condition). In plain English, these provisions ensure that health insurance companies cannot engage in several relatively common practices today: denying coverage of care due to a claim that the need for such care arose out of a “pre-existing condition,” and dropping patients from the plan because the patient acquired an illness which is expensive for the company to cover.
Additionally, the bill specifies “minimum services to be covered,” which include—in addition to the typical hostpitalization, outpatient care, physician services, and prescription drugs—preventive care (including vaccinations) and mental health care (including substance abuse rehabilitation). These provisions also put a cap on out-of-pocket costs, and prohibit excessive pricing variance based on factors such as age and location.
Cost Control and Expansion of Coverage
Relating to expanding health care coverage to a larger number of Americans, the primary provisions of the bill require employers to provide health care benefits to all full-time employees (through a QHBP) or else pay a tax on the employee's wages, with the exemption of small businesses. In addition, health insurance coverage is made mandatory for most Americans, with a possible tax penalty for non-compliance. To ensure access to health insurance to low- and middle-income individuals and families, the bill expands Medicaid eligibility to 150% of the Federal Poverty Level (up from 133% currently), and offers subsidies for lower-income earners who still do not qualify for Medicaid.
In order to make medical care more affordable (and thus expand care to those who can't currently afford it), a number of provisions are included with the purpose of bringing down the cost of medical care. Chief among these is the establishment of what's come to be known as “the Public Option,” which would be a nationally-available, government-run health insurance option modeled after the Federal Employees Health Benefit Program—the insurance plan which is offered to government employees, including the President and members of Congress. The theory is that a government-run insurance option, accountable to the citizens rather than to stockholders, should be able to offer coverage at a lower cost than private insurers in the absence of a profit motive, and thus provide the private market with the competition necessary to bring down overall costs of coverage.
In addition to the Public Option, the bill establishes a centralized health insurance exchange which would serve as a marketplace where Americans can compare health insurance options and choose one that both serves their needs and fits their budget. Participation in the exchange is limited to insurance plans which meet the requirements in Title II (i.e., Qualified Health Benefit Plans, including the Public Option). Again, the theory is that providing a “one-stop” marketplace for insurance options will promote competition within the private market, thereby controlling costs.
II. The Senate Debate
After the passing of the Affordable Health Care for America Act by the House, the Senate began considering its own version of health care reform, the Patient Protection and Affordable Care Act, H.R. 3950. In April of this year, Republican Senator Arlen Specter, long considered a political moderate, announced that he was joining the Democratic Party, saying that he found himself “increasingly at odds with the Republican philosophy and more in line with the philosophy of the Democratic Party.” This, along with Al Franken's long-delayed election win in Minnesota after a lengthy recount, finally gave the Democratic caucus in the Senate (including two Independents) the 60-vote “supermajority” needed to supersede any Republican filibuster attempts.
However, shortly after the Senate health care proposal came into consideration, a few conservative members of the Democratic caucus, most notably Independent Joe Lieberman, began threatening to join a Republican filibuster of the bill, largely due to the controversial inclusion of the Public Option. Without 60 votes, the Senate bill appeared to be unpassable, and Democratic attempts to elicit support from more moderate Republicans like Olympia Snowe were proving to be equally unsuccessful as long as the Public Option remained.
In response to this apparent stalemate, Senate Majority Leader Harry Reid assembled a team of ten conservative and liberal Democrats to work out a compromise which would hopefully result in full Democratic support for the bill and ensure its passage through Senate. While details of the compromise which emerged from these talks are still sketchy, sources are reporting that the Public Option has been scrapped in favor of a two-pronged replacement: The first of which is an establishment of two nationally-available, privately-run (but non-profit) health insurance options overseen by the U.S. Office of Personnel Management (the same agency which runs the Federal Employees Health benefits Plan), and the second being an option for citizens age 55-64 to buy into Medicare (which is currently only available for those 65 and older).
This compromise has been largely lambasted by liberal interest groups as a “watered down” solution which “kills the heart of reform,” but many liberals in the Senate were optimistic that the compromised bill would be able to achieve the same goals while garnering the support it needed from conservative Democrats. However, Senator Lieberman, in a turnaround from his previous position, objected to the Medicare buy-in. Additionally, Senator Ben Nelson, a Democrat from the very conservative state of Nebraska, found issue with the lack of restrictions for federal funding of abortion coverage—a provision which exists in the House bill but was rejected on the Senate floor.
Finally, on Tuesday morning President Obama invited all 60 members of the Democratic caucus to the White House to discuss their options to pass reform. After jettisoning the proposed Medicare buy-in, Lieberman relented at last, saying, “... I'm going to be in a position where I can say what I've wanted to say all along: that I'm ready to vote for health care reform.” Senator Nelson remains a possible hold-out in the absence of stricter abortion limits, but he has not yet indicated that he would be willing to support a filibuster over the issue. In spite of heavy compromises, President Obama expressed great support for the current measure, saying that it meets all of the criteria he laid out in a speech to a joint session of Congress in September.
