Health Reform -- Consensus Grows in advance of recess

This week significant progress appeared to be made in both the House and Senate toward identifying areas of consensus on health reform.

Members of the House Blue Dog Coalition and the House Energy and Commerce Committee are working to complete a compromised before the August recess and have been working hard at committee mark-up on a bill. The compromise has not been released in detail but is reported to include:

• Additional cuts of up to $100 million from the total cost of the reform bill and a requirement that the bill cost under $1 trillion (excluding the SGR fix)
• Dilution of public plan language by explicitly stating provider participation in a public plan is optional, and Removal of the provision indexing payments for the public plan to Medicare, instead allowing the HHS Secretary to negotiate provider payment rates
• Enhanced language around value based purchasing for hospitals
• Language grandfathering existing state insurance exchanges (e.g., Massachusetts Health Connector)
• Clarification that states have the option for state exchanges
• Less generous individual subsidies for insurance coverage
• Exclusion of customary prompt-pay discounts extended to distributors from a manufacturer's calculation of Average Sales Price for Medicare Part B Drugs and Biologics
  

As a part of the accord reached between the Blue Dogs and House leadership earlier this week, the House will not hold a floor vote on reform legislation until September to allow all members time to review all reform bills. If the current timeline holds, we expect the three House committees working the reform legislation-Ways and Means, Education and Labor and Energy and Commerce- will merge their bills together and move to the House floor mid-September. The Ways and Means and Education and Labor Committees have already passed their reform bills.

The Senate is not expected to mark-up a reform bill under after the recess based on statements from Chairman Max Baucus (D-MT) and Senate leaders negotiating on reform legislation. Senate Finance members report the Congressional Budget Office (CBO) has scored its current working draft at less than $900 billion over 10 years. While the official score has not been released, the draft approach is estimated to cover 95 percent of Americans by 2015, boost employer-sponsored coverage, and fully offset and even reduce the deficit in the10th year.