Jan 20, 2010

Massachusetts Election Complicates Efforts on Health Reform

While President Obama and Congressional Democratic leaders have been holding marathon meetings over the last couple of weeks in an effort to reach an agreement on a final health reform bill, the Massachusetts voters sent a wake-up call to Washington by electing Republican Scott Brown to fill the seat of the late Senator Edward Kennedy.

As a result of Brown's election, Obama and the Congressional Democrats will have to change their strategy for approving final health care reform legislation in the Senate, as the Democrats now lack the 60 votes necessary to overcome a Republican filibuster. The current line-up is 57 Democrats with two Independents who caucus with the Democrats, to 41 Republicans.

What happens next is anyone's guess. Among the possibilities are that:

• The House could simply take up the Senate-approved bill in order to avoid the need for each chamber to vote again on a final bill. This scenario appears unlikely, because many House Democrats oppose several provisions in the Senate bill.


• Congress could try to approve the legislation before Senator-elect Brown is officially seated (this scenario also appears unlikely).


• Congress could look to approve the legislation through the "reconciliation" process, which only requires a simple majority of 51 votes and cannot be filibustered. This scenario also appears unlikely as the reconciliation process produces an imperfect result, as any changes effected by the legislation will last only for the duration of the budget resolution (usually five or 10 years), and parts of the bill that do not affect revenue, spending, or entitlement programs can be struck on a "point of order."


• Democratic leaders could try to scale back/modify/improve the legislation to win over the votes of Maine Republican Senators Olympia Snowe and Susan Collins.


• Obama and Congressional leaders could continue on their current path, bring up a final bill for debate, and take their chances that the legislation will pass.

Prior to Tuesday's Election

Meanwhile, prior to Tuesday's special election, details emerged late last week about a tentative agreement among Congressional leaders and unions regarding the excise tax on so-called "Cadillac" plans. The thresholds reportedly will be increased from their current proposed level of $8,500 for single and $23,000 for families to $8,900 for single and $24,000 for families, with vision and dental insurance being excluded from the threshold beginning in 2015.

Further, a concession was made to delay the imposition of the tax on collectively bargained plans to allow for renegotiation. The agreement reportedly calls for delaying the excise tax for collectively bargained plans and state and local plans until 2018, and allowing the plans to negotiate into the proposed health care exchanges in 2017. ERIC strongly opposes any exception from the excise tax provisions for union workers.

While the intention has been to have a bill sent to the President by his State of the Union Address, clearly that will not happen at this point. President Obama's speech is scheduled for Wednesday, January 27.

ERIC Action: ERIC on January 18 sent a letter to the Administration and key Members of Congress urging that health reform support employer-based health care and expressing concerns over its future viability if certain provisions of the health care reform bills are enacted.

In addition, ERIC, along with 674 other signatories in conjunction with the National Coalition on Benefits, on January 19 wrote to House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV) urging the lawmakers not to disrupt the delicate balance that ERISA's regulatory framework provides in the offering of employer-sponsored health insurance coverage. The letter also cautions the lawmakers from enacting an employer mandate, in that such a move would increase employer and employee costs and limit the flexibility and innovation that serves as the foundation of the employer-sponsored health care system.

Questions or comments on health reform should be addressed to either Gretchen Young (gyoung@eric.org) or Adam Solander (asolander@eric.org).

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Websites:

ERIC Letter to President Obama

January 19th Letter to Congressional Leaders

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