Health Reform Negotiations

Friday, January 15, 2010

After a series of meetings this week between President Barack Obama and Congressional leaders to negotiate the merging of the proposed Senate and House versions of health care reform, it appears a final bill is starting to take shape.

Following a full day of negotiations on Wednesday , President Obama, Speaker of the House Nancy Pelosi, (D-CA) and Senate Majority Leader Harry Reid, (D-NV), issued a joint statement indicating that they had made "significant progress in bridging the remaining gaps between the two health insurance reform bills" and are "encouraged and energized." Further, House Ways and Means Committee Chairman Charles Rangel, (D-NY), indicated that negotiators hoped to reach agreement on the core of the legislation by Friday so that the bill could be sent to the Congressional Budget Office (CBO) for scoring.

News media reports indicate the negotiators are considering:

* Combining the national insurance exchange (suggested by the House) and the state-based insurance exchanges (proposed by the Senate). President Obama has indicated his support for a nationwide insurance exchange;

*Expanding the Medicare payroll tax to include some investment earnings in addition to wages

*Abandoning an income tax increase on high-income earners proposed by the House

*Removing an employer mandate on large businesses

*Including additional federal money to help states pay for the expansion of the federal-state Medicaid insurance program for the poor. This revision evolved in reaction to fall-out from the deal made by Senators with Sen. Ben Nelson, (D-NE), to provide additional funding to Nebraska to cover the Medicaid expansion. Sen. Nelson and other lawmakers and governors are pushing for the federal government to pay for the Medicaid expansion in all states.

Further, in a private meeting at the White House on Monday and a subsequent meeting on Wednesday, President Obama indicated to union leaders that while he is committed to including an excise tax on high-cost insurance plans in the final reform package, he is open to amending the proposal. The excise tax has generated significant criticism from unions and other House Democrats. Union leaders believe that the proposed tax on family insurance plans worth more than $23,000 would hurt too many union workers. In addition, 190 of the 256 House members object to the tax. House and Senate negotiators are considering raising the threshold for the tax and exempting certain industries.

President Obama also signaled support for the House's proposed repeal of the insurance industry's federal antitrust exemption.