President pushes to health reform negotiations

This week has included several unusual day-long negotiating sessions on health reform that included President Barack Obama and top Democratic congressional leaders. Progress appears to have been made on several issues and on Thursday the White House announced that a tentative agreement has been reached with union leaders to tax high-cost insurance plans. If the agreement holds, this would remove one of the major stumbling blocks in the way of a final compromise on comprehensive health care legislation.

The breakthrough on the insurance tax marked a victory for the White House, which has long sought a tax on high-cost plans as a way of curbing the rise in health care expenditures. Organized labor had opposed it, arguing the impact would fall heavily on workers whose bargaining contracts gave them more robust health care coverage and therefore limits on the amount of money that could be claimed as a tax deduction could increase income taxes for employees that opt for such plans.

Many key issues are still being debated including whether to establish a single national health insurance exchange, as supported by the House, or dozens of state exchanges, which has been proposed by the Senate. We are also closely following a proposed "Medicare Commission" board which could significantly reduce Medicare reimbursement process without a normal rule making process.

White House officials have told Democrats that they want an agreement as soon as possible, maybe in the next week to 10 days. It will then take time to receive a cost estimate from Congressional Budget Office before votes can be considered. If the goal remains to complete the legislation before the State of the Union, then they would need to be close to key compromises. The date of the State if the Union address has not yet been finalized but today we are hearing it could be February 9th.

Next week we expect to see how key Senators such as Nelson and Lieberman react to potential discussions as their support remains critical for health reform to pass.