Government

Senate health panel approves its part of reform bill

But the Congressional Budget Office director says the measure would not significantly control long-term health spending.

By — Posted July 27, 2009

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A Senate committee on July 15 approved a national health system reform bill with the same party-line, 13-10 vote that defeated many of the amendments Republicans on the panel offered during the month-long bill markup.

The Senate Health, Education, Labor and Pensions Committee approved the Affordable Health Choices Act, its share of a national reform bill expected to be considered by the full Senate. Panel members adopted amendments creating an approval pathway for generic biopharmaceuticals and requiring members of Congress to enroll in the measure's public plan coverage. But Democrats held the line against the addition of medical liability reforms and the establishment of a payment floor for physicians participating in the bill's public health plan.

Attention now turns to the Senate Finance Committee, which is working on its half of the bill. In late July, the committee was still negotiating the bill's spending and savings provisions, more than a month after Finance Committee Chair Max Baucus (D, Mont.) had hoped to begin marking up a bill.

HELP Committee Democrats, including Sen. Patty Murray (Wash.), said the panel's vote was a major step forward in fixing the nation's health system. "A few months ago, health care reform was hundreds of different ideas and bills," she said. With the bill approval, she added, the panel has settled on one path.

Sen. Barbara Mikulski (D, Md.) said the measure forced Republicans to make a decision. "In the end, they did not want to support universal coverage for all Americans."

Spending a concern

HELP Committee Republicans said they appreciated the opportunity to offer hundreds of amendments, but the panel did not approve enough changes to gain their support.

Many of the amendments changed only technical language, GOP members said. Sen. John McCain (Ariz.) said panel Republicans could not embrace a bill that spends so much without trying to cut health costs. "Glaring in its absence is medical liability reform," he said. Republicans offered four medical liability amendments, but HELP Committee Democrats said they did not want to encroach on the Senate Judiciary Committee's jurisdiction on the issue.

Congressional Budget Office Director Doug Elmendorf bolstered Republican cost concerns with his testimony at a July 16 Senate Budget Committee hearing. When asked if the Senate HELP Committee's legislation and a pending House reform bill would control increases in health spending as requested by President Obama, Elmendorf said neither would "reduce the trajectory of federal health spending by a significant amount. And, on the contrary, the legislation significantly expands the federal responsibility for health care costs."

CBO previously had estimated that the HELP Committee measure would cost $600 billion over a decade, but that does not include the estimated $500 billion cost of expanding Medicaid to cover Americans earning up to 150% of the federal poverty level. That provision is expected to be in the Finance Committee portion of the bill.

Obama said during his weekly radio address on July 18 that any health reform bill must pay for itself. "I will not sign on to any health plan that adds to our deficits over the next decade."

Biologics language at odds

Sen. Chris Dodd (D, Conn.) -- who chaired the bill markup hearings -- said the Affordable Health Choices Act had significant bipartisan input. Senators considered nearly 800 amendments and accepted 161 Republican changes. "There were numerous contributions made -- not just technical amendments," Dodd said.

For example, Dodd cited a generic biologics pathway amendment sponsored by Republicans and approved by a 16-7 vote. The provision would provide 12 years of exclusive marketing to the original biologic drug manufacturer before generic competition would be allowed, in addition to existing patent protections.

The language is very similar to an agreement brokered in 2007 by HELP Committee Chair Edward Kennedy (D, Mass.). But Obama prefers to allow generic biologic drug competition after only seven years. House Energy and Commerce Chair Henry Waxman (D, Calif.) has introduced legislation that would allow generic competition after as few as five years.

Generic Pharmaceutical Assn. President and CEO Kathleen Jaeger noted that a recent Federal Trade Commission report also called for only seven years of marketing exclusivity. The report said 12 years would discourage drug company innovation by offering too much protection.

"This unprecedented action strikes a huge blow to consumers at a time when many Americans are struggling to pay for the medicines they need," Jaeger said. Trade associations such as the Biotechnology Industry Organization counter that the 12 years is needed for drugmakers to recover investments in research and technology.

Sen. Tom Coburn, MD (R, Okla.), scored a minor victory when panel members voted 12-11 to approve his amendment requiring members of Congress to enroll in the bill's public insurance plan option. But Dr. Coburn said he expected the provision to be removed when the HELP Committee and Finance Committee bills are merged.

Republicans also helped ensure that the bill's public plan option would be subject to the same rules as private insurers and that wellness programs would be expanded further than the original bill, according to a Democratic HELP Committee aide.

The American Medical Association did not endorse or reject the HELP Committee bill. But in a July 10 letter to the Senate HELP Committee, the AMA offered several comments about the original bill, including suggesting that the measure's public plan option clarify that enrollees have access to out-of-network benefits. The Association also said the bill should allow state insurance regulators to continue monitoring the conduct of health plans and insurance agents, including on the issues of prompt pay and fair contracting requirements.

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ADDITIONAL INFORMATION

HELP panel's half of health reform

The Senate HELP Committee on July 15 voted along party lines to approve its share of a national health reform measure -- the Affordable Health Choices Act. The Senate Finance Committee has jurisdiction over other aspects of the health system, but it has not yet unveiled a bill. The HELP measure would:

  • Establish state or national health insurance exchanges, called affordable health benefits gateways, within 60 days of bill enactment.
  • Create a public health insurance option, available through the gateways, that would pay physicians and others negotiated rates of no more than the average of the rates of all health plans offered.
  • Provide cost-sharing caps and scaled financial assistance to buy private coverage for individuals and families earning up to 400% of the federal poverty level.
  • Prohibit health plans from imposing lifetime or annual limits on coverage or denying coverage based on health status or preexisting conditions.
  • Require individuals to have health insurance, with exemptions if affordable coverage is not available.
  • Mandate that employers with more than 25 employees who don't offer a certain level of coverage and premium assistance pay an annual fee of $750 per full-time worker and $375 per part-time worker.
  • Require all group and individual health plans to continue offering coverage for dependent children up to age 26.
  • Expand National Health Service Corps and community health center funding.

Source: Senate Health, Education, Labor and Pensions Committee bill summary, July

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