GOP Senate Win Threatens Healthcare Reform Legislation

January 19, 2010

January 19, 2010 ( UPDATED January 20, 2010 ) — When Massachusetts voters elected Republican Scott Brown to the US Senate tonight, they threw a wild card into the poker game called healthcare reform.

Brown, a state senator, ran as an opponent of Democratic reform plans, and the Senate race in heavily Democratic Massachusetts was seen as a referendum on the Obama administration itself. Once he takes office — and when that will happen isn't clear — Senate Republicans will command 41 votes, thus depriving Democrats of a 60-vote bloc (which includes 2 independents) that could prevent Republicans from filibustering healthcare reform legislation to death.

Both chambers of Congress passed separate healthcare reform bills late last year, largely similar but with a few salient differences. Usually, a conference committee consisting of House and Senate members would blend such dual bills into a single one that would come before both chambers for a final vote. Congressional Democrats chose instead to bypass the conference committee and merely amend the Senate bill behind closed doors to incorporate some House provisions.

That was the strategy before Brown upset Democratic contender and state Attorney General Martha Coakley in the race to fill the seat vacated by the late Edward "Ted" Kennedy, the Democratic lion of the Senate and the strongest Congressional advocate of healthcare reform during the past 40 years. The seat had been temporarily occupied by Paul Kirk. If Congressional Democrats can't come up with a unified bill by the time Brown takes office, they won't have the 60 votes needed to end a Republican filibuster.

Possible Strategy

To avoid that fate, Congressional Democrats have contemplated a hurry-up offense. They've considered the possibility of asking the House, for example, to quickly approve the Senate bill passed last year as-is — no dickering with House Democrats about their preferences. That way, they'd avoid a showdown vote in the Senate. And filibustering isn't allowed in the House either.

Taking an unamended Senate bill to the floor of the House promises to leave a lot of parties disgruntled. For one thing, the House would be voting on legislation that lacks critical compromises reached earlier this month on taxing "Cadillac" health plans, all for the sake of preserving the support of labor unions. The Senate bill originally called for health insurers to pay a 40% tax beginning in 2013 on annual premiums above $8500 for individual health plans and $23,000 for family plans, but organized labor protested that the tax would be too hard on its members.

To placate the unions, Congressional Democrats upped the health-plan thresholds to $8900 for individual plans and $24,000 for family plans and indexed these thresholds to changes in the Consumer Price Index plus 1%. In addition, Democrats agreed to raise thresholds even further for plans for several groups, such as workers in high-risk professions; exempt dental and vision costs beginning in 2015, and delay imposing the tax on plans negotiated by organized labor until 2018. Such compromises would go by the wayside if the House votes on the Senate bill passed in December.

For their part, House Democrats with their own reform agenda are bound to dislike being forced to vote the Senate bill up or down. In several respects, the House plan is a bolder one. It extends insurance coverage to more nonelderly, legal residents (96% of this group vs 94% in the Senate plan), expand Medicaid eligibility further, and create a government-sponsored health plan to compete with private ones.

May Use Budget Reconciliation to Make Changes Later

However, any bill passed by Congress and signed into law by President Barack Obama could be revised afterward more to the House's liking in a process called budget reconciliation. In the Senate, budget reconciliation measures can't be filibustered, which means Senate Democrats need only a simple, 51-vote majority to get their way.

However, budget reconciliation does not allow legislators to freely revise enacted legislation. They’re essentially limited to tweaking congressional budget resolutions regarding spending, revenue, and debt levels. So budget reconciliation probably would not allow Democrats, for example, to make the Senate bill as hawkish as the House bill is about not funding abortions with taxpayer money.

In any event, it’s not clear how much of the House bill will make it into the Senate bill in the reconciliation process, whether it’s related to the budget or not. At risk, for example, is the House provision to increase Medicaid reimbursement to physicians to Medicare rates — a $57 billion boost to physician revenue over 10 years. Organized medicine also prefers the House’s nonpunitive approach to the Physician Quality Reporting Initiative in Medicare. While the Senate bill imposes penalties on physicians who fail to participate, the House bill does not.


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