As anticipated, reform activity increased over the past week. Much of this activity centered on the flurry of responses to Senator Max Baucus' release last week of the Senate Finance Committee's reform proposal. And with President Obama asking Secretary Sebelius to set a frequent flyer mileage record in her efforts to sell reform to the American public, reform activities are sure to increase - particularly given the view by certain Republicans that Senator Baucus' initial draft is a "stunning assault on liberty." Below are significant developments and areas of interest in health reform from the past week.
Well, If You Insist
With over 543 amendments already in place, Republicans and Democrats have begun rapid-fire negotiations over the Senate Finance Committee's reform proposal, "America's Healthy Future Act of 2009." Upon release of the second Chairman's mark on Tuesday, Senator Max Baucus (D - MT) announced revisions that signal renewed bipartisan support, yet the Senator also suggested the bill is getting close to reaching the 60 votes needed to pass the bill outright without the need for reconciliation. Important changes in the bill now include:
Scaling back a proposed penalty from $3800 to $1900 for those families who fail to purchase insurance;
Subsidies will be allowed for families up to 400 percent of the federal poverty guideline;
Stricter limits on charges by insurers to older individuals seeking coverage; and
Exempting certain high-risk professions from paying the High Cost Insurance Excise Tax for more expensive health plans.
Republican Senator Olympia Snowe (D - ME) played a key role in these new changes. But many Republicans continue to have concerns that Senator Baucus' version does not do enough to contain costs and bend the cost curve over the next decade.
Renewed interest has arisen with the Wyden-Bennett "Healthy Americans Act" that was proposed in the Senate two years ago by Senator Ron Wyden, (D - OR) and Senator Robert Bennett, (R - UT). While the bill failed to gain much traction when introduced, it has impacted movement of the current Senate Finance Committee bill and is recently receiving reconsideration by various Republicans as the bill champions a more free-market and free-choice approach. A key provision of the bill would be that employers "cash-out" all health benefits as wages requiring all Americans to buy insurance. Individuals would then be responsible for paying the full cost of their health insurance coverage. The bill gives more choice to individuals to reject employer offerings and purchase plans from regional or national exchanges sold by private insurers. All people would be guaranteed access to coverage under a low-cost plan regardless of income.
The "Healthy Americans Act" can be found here: http://wyden.senate.gov/issues/Healthy%20Americans%20Act/020609haa_bill.pdf
Who said Fair Market Value?
Included in the more than 500 proposed amendments to Senator Baucus' "America's Healthy Future Act of 2009" are two amendments from Senator Charles Grassley (R - IA) who has long been a proponent for reform in the tax-exempt sector, especially with respect to hospital and health care organizations. These particular amendments deal with governance and reasonable compensation issues for tax-exempt organizations. The first amendment would clarify that the IRS has the authority to require that tax-exempt organizations disclose information concerning governance and management practices on Form 990, which is the annual return filed by tax-exempt organizations. The second amendment would modify Section 4958 of the Internal Revenue Code, which is commonly referred to as the "Intermediate Sanctions Law," to remove the safe harbor currently available to tax-exempt organizations with respect to reasonable compensation. Under the Intermediate Sanctions Law, the IRS can impose an excise tax on certain organization insiders if compensation or benefits provided to such persons do not constitute fair market value. The safe harbor, which is commonly referred to as the rebuttable presumption of reasonableness, has been an important tool for tax-exempt organizations to establish that compensation is reasonable. Senator Grassley's amendment would still require tax-exempt organizations to undertake the processes and procedures involved with the rebuttable presumption of reasonableness, but it would eliminate the corresponding protections that tax-exempt organizations currently enjoy. As a result it would become easier for the IRS to assess excise taxes under the Intermediate Sanctions Law.
The Immortal Public Option
Earlier this week, House Speaker Nancy Pelosi (D - CA) stated that health reform legislation would pass the House within weeks, and that it would include a public option. The public option, or public insurance option, has been one of the most contentious aspects of the health reform debate and, at least more recently, has been seen by many on both sides of the aisle as a "bill killer." Speaker Pelosi seems to disagree, though it is difficult to tell whether she really believes that a public option is viable or whether such comments simply are political posturing. More importantly, even if the House does pass a health reform bill with a public option, it is unclear how such a bill would be reconciled with whatever health reform bill emerges from the Senate, which almost surely will not contain a public option.
Can Reform Cure Cancer?
The White House has released an interesting report that addresses the relationship between the prevalence of cancer in America and health reform. The report focuses on the impact that cancer has on patients with and without insurance and how health insurance reform is intended to serve as a solution to these problems. Relying upon a statistic that nearly one out of every two Americans born today will be diagnosed with cancer at some point during their lifetime, the report discusses the common problems associated with the cost of cancer treatment. These problems include:
Limits on health insurance choices;
Discrimination related to preexisting conditions;
Loss of coverage through employment; and
A lack of caps on out of pocket spending or benefit limits.
Some solutions that reform is expected to bring include:
Increased efforts on cancer prevention and early treatment options;
Promotion of high quality care;
Greater and more affordable insurance choices;
Elimination of preexisting condition or health status coverage limits; and
Eliminating caps on benefits or out-of-pocket spending.
The report may be viewed here: http://www.healthreform.gov/reports/fightingcancer/index.html
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