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Health Care News Roundup: Reconciliation and the Doc Fix

January 13, 2014

President Obama to Outline Reconciliation Push WednesdayThe New York Times is reporting today that President Obama is “prepar[ing] for a speech on Wednesday to outline ‘the way forward’ and to flesh out the substance of his proposed compromise based on

stethoscope and insurance docs

President Obama to Outline Reconciliation Push Wednesday

The New York Times is reporting today that President Obama is “prepar[ing] for a speech on Wednesday to outline ‘the way forward’ and to flesh out the substance of his proposed compromise based on the bills passed by the House and Senate.”

House Speaker Nancy Pelosi indicated yesterday that this new announcement would include a "scaled back" approach to health care reform -- a "Plan C" as it were. But according to a report in today's edition of The Hill, House Majority Leader Steny Hoyer says that's not the case: “Hoyer affirmed that Democratic leaders intend to press ahead with their plan for the House to take up the Senate bill and for both chambers to consider a package based on Obama’s proposal via budget reconciliation rules that would allow the smaller bill to pass the Senate on a simple majority vote.” In other words, it's the same plan, just with the adjustments necessary to make the bill clear the parliamentary thresholds of reconciliation.

Democrats Aim to Finish By Easter

The anticipated timeline for the Capitol Hill activity was outlined today by Inside Health Policy (subscription required), and it goes something like this:

“According to [a] Democratic memo, the timeline may be: Step one: The House passes the Senate's health reform bill by March 19. The bill then goes to the president for signature without going through conference. As part of this step, there are reports that House leaders want to see a letter signed by at least 50 Senate Democrats committing to passing tweaks to the Senate bill worked out between the two chambers, but a Democratic policy consultant says such a letter is unlikely to transpire. More likely, the source said, Senate Majority Leader Harry Reid (D-NV) would privately vow to House Speaker Nancy Pelosi (D-CA) that he has the votes. Step two: After the Senate bill becomes law, the House then amends the Senate bill through a reconciliation bill, to be passed by March 21. That bill would be the only opportunity to amend, add or strike provisions in the Senate bill. Step three: The Senate begins debate on the reconciliation bill by March 23. Debate is limited to 30 hours. Votes begin March 26, the first day of Easter recess, at which point Reid announces that the Senate will stay in session through recess to consider all amendments. Vote on final passage follows consideration of the last amendment. The goal is to pass health reform before the Spring recess (March 29-April 9), so as to avoid a repeat of last year's brutal August break, sources said. Over the next few days, two Democratic sources said, the summary of the president's proposal will be turned into legislative language to be incorporated into the reconciliation bill by the House and Senate legislative counsel. A Republican lobbyist, however, said legislative counsel has determined that they can't finalize drafting until after House moves the Senate bill, ‘further slowing the process and probably raising the anxiety level of House moderate’ Democrats.”

Indiana's HSA Example

In a piece in the Wall Street Journal on Monday, Indiana Gov. Mitch Daniels outlined the benefits of his state's HSA program, frequently cited as a pro-market solution to rising health costs. As the NCPA details:

  • In Indiana's HSA, the state deposits $2,750 per year into an account controlled by the employee, out of which he pays all his health bills; Indiana covers the premium for the plan.
  • The intent is that participants will become more cost-conscious and careful about overpayment or overutilization.
  • Unused funds in the account -- to date some $30 million or about $2,000 per employee and growing fast -- are the worker's permanent property.
  • For the very small number of employees (about 6 percent last year) who use their entire account balance, the state shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected.

This year, over 70 percent of Indiana's 30,000 state workers chose the HSA option.

Doc Fix Falls Through

The annually delayed 21.2% cut in Medicare reimbursements started Monday, but with less outcry then you might expect -- mostly because doctors have become so used to the so-called "doc fix" being enacted, no one honestly believes that Congress will fail to do so again. The results of skipping the doc fix would be felt by many patients:

If physicians are true to their warnings, Medicare patients next week may experience difficulty making an appointment. A recent poll conducted by several medical societies representing neurosurgeons, for example, revealed that almost 40% would cut back on seeing new Medicare patients if reimbursement continues to decline, while 18% would stop accepting new Medicare patients altogether. Another 27% said they would treat fewer established Medicare patients.

However, the American Medical Association continues to believe that the doc fix will be passed, according to AMA President Cecil Wilson, and it is almost certain to be retroactive.

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Benjamin Domenech is the founder and publisher of The Federalist and a senior fellow at The Heartland Institute. @bdomenech