Senate committee trims cost of health system reform bill

Washington -- Scaling back individual health insurance subsidies and requiring employers who don't offer adequate health coverage to pay into a coverage pool has reduced the cost of a Senate committee's bill by nearly half, to about $600 billion. But the measure is a work in progress.

The Senate Health, Education, Labor and Pensions Committee began marking up the Affordable Health Choices Act on June 17. The bill is sponsored by HELP Chair Edward Kennedy (D, Mass.),but Sen. Chris Dodd (D, Conn.) is leading the markup.

The Senate HELP bill -- and likely the Senate Finance bill, which has not yet been released officially -- would expand coverage along a model adopted by Massachusetts in 2006. It would create health insurance exchanges for those without coverage. The bill would offer sliding-scale subsidies for low- to moderate-income people to buy coverage, but it also would require individuals to have health insurance or pay a tax penalty.

The cost of the Senate HELP bill has been a sticking point. But committee Democrats said a July 2 Congressional Budget Office cost estimate of $600 billion over a decade makes the bill viable. CBO had estimated that an earlier, partial version of the bill would cost about $1 trillion over a decade.

President Obama has said he wants a health reform bill that costs no more than $1 trillion that is fully offset with new revenue or savings.

The revised proposal also would create a public health insurance plan to compete with private health plans, with physician pay rates negotiated by the HHS secretary. Fees would not exceed -- but could be less than -- those of private health plans. Participation in the plan would be voluntary. The American Medical Association House of Delegates agreed in June not to oppose or support a public plan outright but to "support health system reform alternatives that are consistent with AMA principles of pluralism, freedom of choice, freedom of practice and universal access for patients."

The Senate HELP bill is still incomplete. It does not yet include a Medicaid expansion or other subsidies that are expected to be part of the Senate Finance measure.

Absent the Medicaid expansion, the Senate HELP bill alone would reduce the number of uninsured by only about 20 million over a decade, leaving 34 million uninsured in 2019, CBO estimated. Dodd said that when the Senate HELP bill is merged with the forthcoming Senate Finance bill, the combined measure will cover 97% of Americans.

Senate HELP Republicans said Democrats should be more honest about the cost and limitations of the Affordable Health Choices Act.