Health Care Reform Update
On December 24th, the Senate passed its version of healthcare reform. The vote came just in time for the White House-imposed Christmas deadline, and set up House-Senate negotiations for this month. As you will remember, the House has already passed its legislation by a very thin margin.
As congressional Democrats work toward a final healthcare bill, they appear increasingly likely to forgo the formal conference committee process for merging House and Senate versions of the legislation, opting instead for closely held negotiations between leaders from the two chambers. Democratic leaders will try to draft a compromise version that would be acceptable to both chambers, attempting to pave the way for final congressional action this month or in early February.
There has been some dissent among Members concerning this approach. Typically, competing bills are reconciled by a conference committee composed of House and Senate chairs of key committees. However, Democrats are able to fashion a more informal procedure because they are not relying on Republican votes to pass the final bill. Many insiders believe this procedural approach is the best way to limit Republicans from derailing the process. Another overarching rationale for the abbreviated approach is to make sure congressional negotiators wrap up work as quickly as possible so the administration and its congressional allies can turn their attention to the economy and job creation.
While there are many issues to be resolved in any negotiation on health care reform, the most significant are whether to include a public option (included in the House but not the Senate), coverage for abortion services, and how the bill will be paid for: the House includes a tax on the wealthiest while the Senate includes a Cadillac tax, which is a tax on the most generous health insurance plans. An overall obstacle will be the need for congressional negotiators to keep the final 10-year price tag below $900 billion, forcing Democrats to pick priorities, since the House bill costs more than $1 trillion compared with a Senate measure that would cost an estimated $871 billion over the next decade.