The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Senate Finance Health Reform Framework Creates Context for President’s Speech

Posted by Alan on September 8, 2009


In yesterday’s post I described some highlights of a draft health care reform proposal being circulated in Washington by Senate Finance Committee Chair Max Baucus. Yesterday all I could find were news stories about the proposal. Today the full text of what is called the “Framework for Comprehensive Health Reform” is available.

There’s a lot of interesting details in the proposal. It would dramatically change the way health insurance is priced, purchased and administered. It brings together several proposals to reduce the underlying cost of care (although it fails to bring them together into a single section – a political error in my view). It offers subsidies to make coverage more affordable. requires individuals to obtain coverage, and penalizes businesses of more than 50 workers who fail to offer its employee’s insurance. It does not include a government-run plan, but does create state-level health insurance exchanges and authorizes health insurance co-operatives.

The document is only 18 pages and well worth the reading. Because what is significant about the framework is its embodiment of the more moderate ideas under serious Congressional consideration. The framework is not legislation and the Finance Committee is likely to make significant changes to various aspects of the proposal. But if the legislation that emerges from the committee is anything like what’s being circulated by Chairman Baucus, it is the vehicle for reform that has the best chance of capturing any Republican support and of attracting moderate and conservative Democrats. It is also the legislative package destined to be the target of liberal wrath.

Which is another reason the Senate Finance Committee’s Framework is significant. The proposal is being circulated just before President Barack Obama’s address to Congress on health care reform. In his speech President Obama will be creating the context for the final push toward comprehensive health care reform. Previously the debate had focused on the only proposals on the table – the liberal bills passed by the Congressional committees. You were either for them or against them. The Framework being considered by the Senate Finance Committee brings forward a new option, a more moderate option. It won’t attract the support of conservative Republicans – nothing Democrats propose could. But it may attract some GOP votes and it certainly will bring along many moderate and conservative Democrats.

I have long maintained that health care reform would be decided by such moderates. But it is up to President Obama to make this possible. His speech will either strengthen or weaken Senator Baucus’ proposal. His address is expected to clarify what provisions he considers crucial to reform and which he simply prefers and encourages. If he stakes his position firmly in the liberal camp the chances of moderates prevailing is greatly reduced. If, however, he embraces some of the provisions put forward by Senator Baucus, the debate will shift considerably toward the middle. And the legislation likely to emerge from Congress will look substantially like the Framework.

In other words, President Obama is coming to the health care reform arena with no intention of sitting on the sidelines. Now that there are two teams on the field, he needs to make clear which one he’s on.

7 Responses to “Senate Finance Health Reform Framework Creates Context for President’s Speech”

  1. JimK said

    The attached link is a response to Ms. Palin’s call for “Tort Reform.”

    Click to access TrueRiskF.pdf

    Additionally, I have attached a report from the State of Tennessee on malpractice claims. Page four is particularly informative. According to the information on page 4, there was a total of 316 court case judgments during 2007, the plaintiff prevailed in a total of 7 cases.

    Click to access 2008MedMalReport111908.pdf

    • Nosedoc said

      The kind of tort reform that is needed to reduce health care expenditures has nothing to do with caps on non-economic damages, which successfully served its purpose in Texas and California, which was to stabilize malpractice insurance premiums and reverse the egress of physicians out of state. Caps do nothing to lessen the fear of health professionals of being sued for a missed diagnosis, no matter how remote the possibility might be. Defensive medicine is the result, costing the American public billions of dollars in unnecessary health services each year. Real tort reform, such as the establishment of health courts with experienced panels of judges rather than lay jurors who are to see past adverse outcomes and frequently unable to understand the complicated issues involved in medical decision-making, would streamline the medical liability process and make it reliable in its judgments. Real tort reform results in a system that can quickly identify medical errors and justly compensate the individuals and families who are truly wronged in the event of a medical error or negligence, while at the same time establishing consistently defensible standards of care for physicians to help guide decision-making in the future, avoiding the excessive use of diagnostic studies which tend to beget additional studies. The system we have now serves no one but the litigators (i.e., the attorneys) themselves.

      • JimK said

        While I am not sure of the statistics on overall Tort claims, I am sure it is fair to say that a number of Tort claims involve industries in which the general public has little knowledge of either the technology involved in the industry or Industry Standards. Therefore, under your scenario every industry could make the case that all claims against a specific industry should be decided by industry specialists.
        As to the “complicated issues involved in medical decision-making” aspect of your argument, I doubt very much that if the medical decisions are within the medical profession’s accepted “Standard of Care” guidelines that a malpractice claim would have much chance of surviving summary judgment. If the claim does survive summary judgment we are back to my first point.

  2. JimK said

    Alan

    I have 2 questions for you:
    How does the proposed Baucus Plan fare against the Federal Employees Health Benefits Program (FEHBP)?
    I know the obvious difference is the fact that the Federal Government picks up 75% of the premiums under the FEHBP and 65% of the premium for retirees.

    Which leads me to my second question, Do any of the proposed income group subsidies come close to matching the government’s 75% FEHBP contribution?

    Disclosure: I am a retired Postal Employee covered under the FEHBP. The government’s share of my premiums are not paid by the taxpayers but by the Postal Service, which receives no Federal Funding.
    I would like to add that as a former Federal Employee I have been paying Health Insurance Premiums for over 30 years, this obviously included a time when most private employees were receiving free health care insurance. One other thing, over 30 years ago I left a private employer that had a much more comprehensive Health package then most of the packages offered under the FEHBP.

    • Alan said

      Hello JimK and thank you for the comment. I assume you’re asking about how the exchanges contemplated by the Senate Finance Committee’s Framework compares to the FEHBP. The Framework is only a high-level description of reform provisions. Until it’s translated into legislative language it’s impossible to answer your question with any precision. However, it appears there will be a substantial difference. The FEHBP is a purchasing pool that negotiates with private carriers concerning rates and benefits and facilitates enrollment by federal employees. The Senate Finance Committee appears to be moving toward state exchanges that will act as simple information clearing-houses. They’ll provide data, but neither negotiate rates nor enroll consumers in plans. This could change, however. For example, the federal legislation could give states the options to make their exchanges more robust and act more like a purchasing pool. There’s a long way to go before we know what the exchanges will look like.

      As for the premium subsidies, those are somewhat in flux, but all proposals seem to set them based on household income. Some families are likely to get more than 75% when the dust settles, some families substantially less and some none at all.
      Hope this helps.

      • JimK said

        Alan

        Thanks for the reply. However, your answer raised another question in my mind. Although the States do not negotiate with individual plans don’t they set minimum standards for Medical Loss Ratios (MLR)?
        I am new to this area and much of what I am asking may simply demonstrate my ignorance, but if my understanding of MLR’s is correct, which is if the MLR is set at 75%, the insurance company must pay out at least 75% of the premiums collected in medical reimbursements. If the insurance company pays out less than 75%, they must reimburse their customers (I do realize that the 75% does not apply to an individual customer). So is this not, in essence, negotiating rates?

        Jim K

        • Alan said

          Not all states have a minimum medical loss ratio. In fact, most don’t. And the kind of negotiating I’m talking about between the purchasing pool and carriers is about specific benefits (this is covered, this is not) and pricing (it costs exactly this much). I don’t consider this process to be the same as mandating specific MLRs. The bottom line, of course, is that we don’t know yet what the exchanges will look like yet.

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