The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Countdown to the Real Work on Health Care Reform

Posted by Alan on December 20, 2009

With a commitment of 60 votes, Senate Majority Leader Harry Reid unveiled the manager’s mark of the Patient Protection and Affordable Care Act or, as it is better known, the Senate’s health care reform bill. After day long negotiations over abortion and other issues, Senator Ben Nelson agreed to vote in favor of bringing the bill to the Senate floor.

The manager’s mark of HR 3590 identifies the changes made to the  original Senate health care reform legislation (in other words, if you want to read the bill you have to read both the original and the most recent document). As has been widely reported, there are some provisions of the legislation specifically aimed at securing the support of Senator Ben Nelson of Nebraska. For example, the health care reform bill will increase state spending on Medicaid. The Senate bill reimburses states for this extra cost until 2017 at which time the federal matching funds are phased out. Except for Nebraska where the federal government would pay for Medicaid expansion forever. (Or, to be realistic, until Congress takes the subsidy away).

There’s a host of other provisions of interest. A government-run health plan is out of the bill, much to the frustration and dismay of liberals. Carriers would be required to maintain a medical loss ratio of 80 percent for small group and individual products while meeting a minimum 85 percent MLR for their large group block of business. Rating differences based on age would be limited to a 3-to-1 ratio. However, states could increase the minimum medical loss ratios or narrow the age-based rating difference. There’s new language concerning abortions, one of the inducements to get Senator Nelson’s vote, although this language is apparently not strong enough for anti-abortion Democrats in the House.

The Office of Personnel Management would create a copy of the Federal Employee Health Benefit Plan featuring private carriers. (It appears both for-profit and non-profit plans could participate in this new program, but I may be reading it wrong and only non-profits are permitted). There’s a host of preventive/wellness programs, pilot projects and other provisions aimed at addressing costs. And it would allow carriers meeting certain federal standards to offer coverage in other states through state exchanges.

(I received an email from a conservative broker blasting this provision as removing the ability for “the Citizens of a State having a say on State Laws and Mandates!” Which is pretty funny considering it’s at the center of Republican reform proposals, was a part of Senator John McCain’s health care reform platform when he ran for president, and is not much different than the Associated Health Plans advocated by conservatives for over a decade. Sometimes it seems to be less about the underlying public policy and more about who makes a proposal that drives the reaction.)

The bottom line is that Senator Reid did what he needed to do to cobble together 60 votes in the Senate. What, in the words of former Majority Leader Tom Daschle, is the equivalent of shoveling 60 frogs into a wheelbarrow.)  As a result, the Senate will pass health care reform.

And that’s when the fun begins. There are substantial differences between the House and Senate versions of health care reform. Perhaps Speaker Nancy Pelosi, recognizing the greater challenge Senator Reid has in rounding up votes, will instruct House negotiators to quickly adopt the Senate version of health care reform. This could result in a bill passing Congress in very early January.

More likely, however, House and Senate negotiators will struggle to refine the legislation. The result will be closer to the Senate version than what passed the House, but it would not be the same HR 3590 that will pass the Senate. This process will take significantly longer, perhaps most of January. While unlikely, the conference committee has the power to start with a blank piece of paper and write a brand new bill.

My guess is Speaker Pelosi will focus on a few key modifications to the Senate bill. So long as it doesn’t cause one of Senator Reid’s frogs to jump out of the wheelbarrow these will be accepted. The result will a relatively short conference committee leading to a final vote on health care reform by mid-January.

What’s significant is that the playoff season is almost over. The World Series (that would be the conference committee) is about to begin. Which means the real work of writing health care reform legislation is about to begin.

Added December 21, 2009: Memorandum from the Congressional Budget Office to Senator Harry Reid summarizing their analysis of the Patient Protection and Affordable Care Act and to a blog posting by CBO Director  Douglas Elmendorf concerning a correction to the calculation of federal reductions beyond 2019.


15 Responses to “Countdown to the Real Work on Health Care Reform”

  1. Scott said

    Thorton, your chemical plant example is silly and comes from someone who obviously doesn’t understand the realities of the real health reform world. Regardless of anything that the government could do, there will always be complicated issues dealing with health insurance. Claims prosessed wrong, claims denied, questions about particular situations and the need to speak to someone who has been there, done that and actually cares about their client as opposed to a government phone answerer waiting for their next break. Obviously, you are so well educated and so well versed that you would never need anyone elses expertise in this area. Brokers are the grease that keep all the wheels moving, in spite of the government, in spite of the doctors, hospitals and insurance companies. We are the ones that help pull all these complicated areas together and help the client. The government could never and will never be able to make all these problems go away and then it will be all pink bunny rabbits and ponies. Once the governemnt gets involved, and my job becomes even more of a nightmare, I am sure I will look back on these days and say I remember when you could actually get something done….

  2. Alan, I too am a broker and I have watched this health care reformed debate with amazement. All this media coverage of political posturing, grandstanding, name calling, nick picking, misinformation, town hall anger, tea party protest, what’s in and what’s out and what is it going to cost tax payers is just plain nonsense. Look, your IQ and your shoe size would have to be the same number if you don’t understand that all this fussing and fighting is about the bottom line of the companies that provide service, insurance and/ or support to the health care industry and their clients. If this debate was truly about helping people attain health insurance for the sake of saving their lives or their financial stability it would have been settled months ago.
    I talk to people every day as a broker and I see and hear firsthand the affect of not having insurance has on people. We have become a nation were business bottom lines are more important than saving the lives of our very own citizens. Why is this a political issue instead of a moral one? Why are we so easily drawn into political battle between so called conservatives and progressives that we forget the goal of the exercise? The answer is simple. Businesses who feel their bottom line will be negatively impacted will stop at nothing to keep this from happening.
    I will say this though, if you did not have a good background or working knowledge of how government works from your high school civics class, you got a good refresher course watching this debate. In addition, since most of us aspire to be good Christians and want to follow the teachings and actions of Jesus, why would you oppose free universal health care for all who needs it? Isn’t that what he did? Did he not tell all his disciples to follow his example and heal the sick without expectation of compensation? What am I missing here?

    • Mark said

      Please define what you mean by “free”.

    • I am health insurance broker too. My heart breaks when I learn of a young girl who is severly flat footed with resulting hip and knee problems and is teased at school. The company insurance is way too expensive to put the dependants on. She would get declined on the individual side. There needs to be insurance for children who have pre-exisiting condtions but it should not be free. I think that it should be graded on a sliding scale with the parent’s income. I think when you start giving out “free” insurance then it becomes an entitlement program. Everyone should pay even if it is slight- don’t forget the widow’s mite. If you can’t pay then give back through volunteering at a food bank. I just don’t believe in the principle of “free insurance” unless you are severely handicapped. Our legislation should be founded upon principles not upon kickbacks. The whole ides of “what’s in it for me or my state” is wrong. We have missed the mark in the name of charity. Charity never faileth unless you seeketh your own.

      • Rick said

        Why even discuss “free insurance”? Why should insurance take the blame if doctors and hospitals refuse to do pro-bono work?

  3. npg said

    just because you call a broker “conservative”, just why is it “pretty funny” that he opposes loss of state control of insurance matters again? do you really think brokers you label as “conservative” all agree with conservative politicians concerning the matter of “association” plans? try to keep your liberal bias from showing, if you can, that is

    • Alan said

      This broker has spoken positively of the Republican reform proposals, virtually of which include the selling across state lines proposal. As I’ve written since the presidential campaign, I find this to be a very non-conservative position. Perhaps “funny” wasn’t the right word to have used. “Ironic” might have been better. Thanks for bringing this to my attention npg.

      • npg said

        Brokers, particularly small California brokers, who might otherwise consider themselves conservative (not for reasons relating to any personal morality, but for reasons more closely related to Jeffersonian Democracy and the more libertarian inclinations of small businesses (like many brokers), could not possibly support any interstate plans which simply further erode their role in the distribution channel…and so I can assure you that many of us who oppose this “reform” bill are astute enough to severely disassociate ourselves from D.C. reformists, Republican or otherwise, who will cut a deal with the insurance companies without the participation of the agent community…so, yes, I oppose this bill, not because I am a lockstep “conservative” as defined by some Senator or “blogger”, but because I oppose the incremental socialism that has been greatly accelerated by the Obama-Pelosi-Reid mobsters currently in power…so I don’t know who this broker is to whom you refer, but he is nuts if he supports any program which diminishes or ignores our role in the community and in this industry…

        • JimK said

          Let me see if I understand you; you are a self-professed libertarian who wants monopoly protection against healthcare competition.

        • James S. Thornton said

          I can’t begrudge anyone from trying to protect his or her livelihood. But if his or her livelihood depends upon providing a service–like helping people negotiate an incredibly and needlessly complex and unfair health care system–I also think the service provider needs to keep the bigger picture in mind.

          At the risk of using a (somewhat) inflated analogy, imagine if your home town had a chemical company that regularly released burning gases into the local atmosphere, resulting in disfiguring burns to a large chunk of your town’s people. Imagine now that you make a very healthy living providing cosmetic surgical repairs of those whose skin has been affected.

          Along comes a movement to regulate the chemical plant. You and your fellow cosmetic surgeons say, “Now wait a minute! Without this chemical company, the need for my services might well dry up!”

          Though I understand your lament, I think sometimes we all must give in a little for the greater good.

          The fact that those poorly served by the current health care system are not as visible as these fictious disfigured townspeople does not change the basic fact.

          An awful lot of Americans cannot get or keep health insurance, due to no fault of their own, despite the best help that the best brokers can offer them. Unless you are covered by an employer, odds are you are up the creek.

        • npg said

          uhhh, no Jim…when the government takes over the distribution channel, Marx would call that Socialism…since when has the federal government fairly competed on anything? just think WalMart, except a million times worse, against a corner store…

  4. Gary Weiss said


    What did you see in the bill regarding HSA’s and high deductible plans?



    • Alan said

      Gary: The only reference in the original legislation (not the manager’s mark) to HSAs is on page 113. Starting at line 17 the section reads “The Secretary may issue regulations under which employer contributions to a health savings account … may be taken into account indetermining the level of coverage for a plan of the employer.” The significance is: 1) I couldn’t find any explicit prohibition of HSAs; 2) there appears to be no modifications to HSAs; and 3) this statement would not be necessary if HSAs were going away. So I conclude they remain with us, unchanged. Hope this helps.

      • James S. Thornton said


        What is your opinion of HSAs? For whom are they a good option? For whom are they not?

        I have been looking for alternatives to what I and my family have now, and it appears that a very high HSA are the only option that we even have a prayer of being able to get because of “pre-existing conditions”–statin and antidepressant use.

        When I asked someone at the Kaiser Family Foundation about these (in the course of researching an article on health insurance), she told me that insurers are really enthusiastic about these as a way of drastically keeping their costs down. But she said that unless you are quite wealthy, they really bite you if you ever have a significant injury or medical problem.

        Anyhow, I am curious what you think of the approach.

        • Alan said

          Hello James. I know you’re having trouble finding affordable coverage and I hope an HSA-eligible plan can help. These high deductible plans are definitely a good deal for the healthy and wealthy, but they can be a good choice for the less healthy and the not-so-rich as well. Yes, they have higher deductibles than most plans (although this is somewhat mitigated because all of a family’s expenses apply to their combined deductible). A significant number of people go no further, buying HSA-eligible plans as catastrophic coverage. The advantage of these plans, however, is that the insured can put pre-tax dollars into a Health Savings Account (thus the name of the program). This HSA is like an IRA, but the money can be used for medical expenses (such as meeting the deductible). Any unused dollars at the end of the year can be rolled over. This is an oversimplified explanation, but hopefully it gives you a general grounding in how this program works.

          I’m disappointed, but not surprised, by the response of whoever you talked to at the Kaiser Family Foundation. Some folks have a knee-jerk reaction to health insurance with significant deductibles. However, the decision as to whether an HSA-eligible plan will work for you and your family is more complicated than such a simplistic approach. I recommend you talk to a local broker (check out the NAHU web site to find one near you — The math is relatively straightforward, however. The HSA-eligible plan is likely to be much less expensive than your current coverage. How much of that savings could you put into the HSA to help offset the higher deductible?

          Bottom line: HSA-eligible plans are not for everyone, but I’ve seen them work extremely well for a number of non-wealthy individuals. It’s definitely worth pursuing. Hope this helps.

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