The Senate Finance Committee has embarked on its long journey to amend and refine the Chairman’s Mark of America’s Healthy Future Act of 2009. While there’s a lot of attention being given to the fact that committee members have submitted over 500 amendments that number is less impressive than it may seem. Many of these proposed changes are technical in nature while others are duplicative. Besides, it’s not the number of amendments that matter, it’s the substance of them that determines the scope of the task facing the committee.
The task is great. Three ideologies are at play on the committee: conservative, moderate and liberal. While conservatives will have their say and no doubt get a few of their proposals added to the bill, it is moderates and conservatives – most all of them Democrats – who will truly shape the final outcome. Most Republicans have made it clear they will vote against any bill that resembles the Chairman’s Mark. This effectively removes them from the mix, leaving the shaping of the legislation to a tug-of-war between moderates and liberals.
Senator Max Baucus modified his Chairman’s Mark to address criticism from liberals and to reach out to some moderates.
For example, Senator Baucus’ health care reform plan requires all individuals to obtain medical insurance and provides a premium subsidy to help make the coverage affordable for lower-income households. Originally, those subsidies were designed to cap premium costs at three percent of a household income for those making 100 percent of the Federal Poverty Level rising to thirteen percent of household income for those households earning 300 percent of the FPL. Senator Baucus modified his original proposal to “lower the maximum amount of income that families would contribute to their health insurance premiums to two percent of income for those at 100 percent of the Federal Poverty Level …” He also increased the number of Americans eligible for those subsidies to households earning 400 percent of the FPL ($43,320 for an individual; $88,200 for a family of four) and capped their premium costs at 12 percent of income — $10,584 for a family at 400 percent of FPL. (Page 6 of the Modifications to the Chairman’s Mark). To illustrate how the subsidies under various health care reform bills work, including the modified version of Senator Baucus’ proposal, take a look at the nifty subsidy calculator on Kaiser Family Foundation site.
Senator Baucus also reduced out-of-pocket maximums for households between 200 and 300 of the poverty level to two-thirds of the HSA out-of-pocket limit ($3,987 for an individual; $7,073 for a family in 2010). (Page 6 of the Modifications).
A change requested by Senator Olympia Snowe, the Republican most likely to support the bill in committee, was accepted by Senator Baucus. It would require small employers to provide a plan with a deductible of no more than $2,000 for individuals and $4,000 for families unless higher amounts are offset by HSAs, HRAs or the like. (This requirement would not impact the “young invincible” catastrophic coverage medical plan (that also cover preventive care) available to those 25 years old and younger. (Page 6 of the Modifications).
Speaking of the young invincible bill, Senator Baucus accepted another proposal by Senator Snow, opening up eligibility for these plans to those who would otherwise have been eligible for a hardship exemption from the requirement to obtain coverage. The exemption was available to those for whom premiums exceed 10 percent of their income. (Page 6 of the Modifications).
As originally proposed, workers receiving coverage from their employers that met certain conditions would be ineligible to receive tax credits to enable them to purchase coverage on their own through a health insurance exchange. Senator Baucus accepted yet another amendment from Senator Snowe that lowers this threshold, permitting employees whose share of premiums through their employer-sponsored coverage exceeds 10 percent of their income to qualify for the tax credit. (Page 7 of the Modifications).
There are other significant changes, too. For example, the threshold for plans on which insurance companies would be subject to a tax (so-called “Cadillac plans) had not been indexed to inflation in the original proposal. Over time this meant these plans (costing $8,000 for individual coverage and $21,000 for family coverage in 2013) would likely look more like Chevrolets. Senator Baucus now indexes the threshold for these plans. He also increased the excise tax from 35 percent to 40 percent.
The amendments accepted by Senator Baucus without a debate highlights his desire to placate Senator Snowe and other moderates on one hand while addressing some of the concerns of liberals on the other. The political calculus is simple: the more these Senators can claim that they improved the bill, the greater their political cover to vote for it.
Put another way, it is unlikely any of the changes accepted by Senator Baucus reduces the chances of the bills passage and many increase its chances. With hours of debate and dozens of sustentative changes to consider, this journey is far from over.