Health Care Reform Passage is Historic, But Only the Beginning

Health care reform was passed by Congress today. It’s as simple as that. And as complicated. The legislation will do far less than either its proponents or opponents claim. But the legislation will change the insurance industry. It will begin to address some of the drivers of skyrocketing medical costs. It will aggregate more power and influence in government while it is far from a government takeover.

The political impact of health care reform legislation will have far reaching political ramifications for years to come. The Senate health care reform package and the associated clean-up legislation were passed exclusively with Democratic votes. Which means if, over time, the program is deemed by voters as successful the electoral benefits of the program will accrue almost exclusively to Democrats. And if the program is rejected by voters it will be Democrats who are punished.

The vote in the House of Representatives – 219-to-212 to pass the Senate health care reform bill and 220-to-211 in favor of the clean-up legislation – is historic by any definition of the term. Many Presidents of both parties had tried to pass health care reform. Many Congresses had considered such legislation. To President Barack Obama and the 111th United States Congress goes the credit (or blame) for actually taking action.

Their bill is more moderate than some that had been proposed (the proposals of both Presidents Bill Clinton and Richard Nixon were in many ways more far reaching) and far more liberal than others. Yet the politics, policy and process has polarized the nation in ways few issues have before. (I find it ironic that many of those marching against today’s health care reform today were doing much the same against the Viet Nam War in the 60s and early 70s – or condemning those who did).

The House vote today means that, once signed, the Senate health care reform bill, HR 3590, becomes the law of the land. However, virtually no one in Congress or the Administration likes that bill as written. Consequently, the House passed a companion bill, HR 4872, that makes several significant changes to the HR 3590. Most significantly, the companion bill can be considered by the Senate under established parliamentary rules that bypass the filibuster process. This means the clean-up bill can be passed by a simple majority of the Senate – 51 votes. Senate Majority Leader Harry Reid has assured House Speaker Nancy Pelosi he has rounded up the necessary votes. However, success is neither automatic nor guaranteed. Republicans have the ability to delay passage of the clean-up legislation and might be able to have key elements of it removed.

This means there will be two signing ceremonies concerning health care reform: in the first President Obama will sign into law the Senate health care reform bill that no one likes. In the second, President Obama will sign into law a measure that virtually everyone agrees makes the first bill better. American politics being what it is today, however, we will first witness the spectacle of Republicans trying to defeat legislation that contains provisions they would likely admit improve the law that they failed to defeat today. No wonder Alice in Wonderland is the most popular movie in the land today. The body politic has fallen through the looking glass.

As a result of tonight’s action, Congress has addressed the easiest part of health care reform: changing how insurance companies act and are regulated. These “market reforms” are meaningful. Some, although not all, were necessary. But in a real sense the measures enacted represent low hanging fruit. Because the reality is that insurance companies don’t determine insurance premiums in a vacuum. Congress has taken on the easy villains in this drama: the greedy insurance companies. But everyone knows (and a few will admit) that health costs will continue to increase at an unacceptable rate. This means lawmakers will soon be forced to address the real driver of increasing health insurance premiums: medical costs that increase at twice the rate of general inflation. Doing so will be more difficult than beating up on insurance carriers, but eventually there’s no escaping the need to address root causes.

Then there’s the inevitable law suits. State legislators are already passing laws to exempt their citizens from elements of the health care reform package (specifically the requirement imposed on virtually all Americans to obtain health care coverage). And any legislation of this magnitude is a boon for lawyers in both the private and public sectors.

Should agents and brokers (the primary audience for this blog) consider passage of health care reform the death knell of their profession? No. Change will be required (something that has been required with some regularity every few years for the past three decades). But thanks to the efforts of the National Association of Health Underwriters and the hundreds of brokers who have engaged in the health care reform debate, change does not mean elimination for today’s professional brokers. And the reality is, even if Congress failed to pass health care reform brokers faced substantial changes to their profession in the next few years. The status quo was going to change by legislative fiat or as the result of internal stresses. At least now we have a better sense of what the new world will look like.

The health care reform bills passed by the House of Representatives today draw the outlines of this new world. It will be up to judges and regulators and future Congresses and state legislatures to fill in the details. As mentioned previously, neither the health care reform process or debate is over yet.

So yes, the House of Representatives made history tonight. And it’s only the beginning.

The Never Ending Story That is Health Care Reform Continues

President Barack Obama is scheduled to announce his final health care reform package tomorrow (Wednesday). This is the version of reform the President hopes Democrats in Congress will embrace and enact through a process that would side-step the inevitable Republican filibuster of health care legislation. Passage is far from assured. There are still several parliamentary maneuvers available to the GOP to slow the legislative process down. And it’s unclear whether Democrats can muster a majority behind any single bill to pass health care reform even if no super majorities are required.

Yet there are indications Democrats could be successful. For example, the House passed its health care reform bill by the slimmest of margins – 220-215 – last November. Only one Republican voted for the bill and he has indicated he won’t bolt his party again. Given that 218 votes are need to pass legislation in the House, this doesn’t give Speaker Nancy Pelosi much room for error. However, according to the Associated Press, “at least nine of the 39 Democrats” who voted against the health care reform bill in November are now “undecided or withholding judgment until they see Mr. Obama’s final product.”

That same Associated Press story also reports that the President is thinking of incorporating four Republican proposals raised during the bipartisan health care reform summit last week. These are: 1) using investigators disguised as patients to uncover fraud and waste; 2) increasing payments to Medicaid providers; 3) strengthening and expanding Health Savings Accounts; and 4) expanding the medical malpractice reform pilot programs already in his bill.

It’s not that the President thinks including these provisions increases the likelihood of any Republicans supporting his health care reform legislation. But it would provide Democrats with a useful talking point during the firestorm that would follow passage of reform legislation by a simple majority vote in the Senate. Democrats will be able to say something along the line of “We met with Republicans and had an open mind, even incorporating some of their cost saving ideas into the final package. And our package already included several provisions Republicans had supported now or in the past. Their unanimous opposition, consequently, obviously reflects politics more than policy so we had to find away around the filibuster. What we did was fair, legal and within the rules.” Or something along those lines.

What all this means is that there’s still several chapters to go in the never-ending story that is health care reform.

  • Will Democrats find a way to bring health care reform votes to the floor of the Senate?
  • Will the House vote first or wait until after the Senate takes action (if it ever does)?
  • If a vote is taken, will there be sufficient votes to actually pass a bill?
  • If Congress does enact health care reform legislation, how soon after the President signs it into law will it take before the first law suit is filed?
  • Which party will suffer at the polls this November for the the procedural games both have played?

And on and on. Stay tuned.

Health Care Reform Effort Will Continue, But Fate is Uncertain

With the bipartisan health care reform summit history, President Barack Obama is turning to the future of his push to revamp America’s health care system. Here’s a simple way for President Barack Obama to demonstrate a commitment to cost containment and bi-partisanship. As he said in his weekly address this morning, “I am eager and willing to move forward with members of both parties on health care if the other side is serious about coming together to resolve our differences and get this done.”

He also made clear, however that he would move forward without Republican support if that was necessary. “I also believe that we cannot lose the opportunity to meet this challenge,” he said, concluding, “It is time for us to come together.  It is time for us to act.  It is time for those of us in Washington to live up to our responsibilities to the American people and to future generations.  So let’s get this done.”

The other day I wrote about the three step process Democrats are likely to use to attempt to pass comprehensive health care reform. To summarize: House Democrats would pass the health care reform previously passed by the Senate. The Senate would pass a clean-up bill (which I’ve also heard referred to as “sidecar legislation”) that makes fixes the House and President Obama want that impacts costs and taxes. The House passes the clean up bill. The President signs both bills and health care reform, Democratic-style, is the law of the land.

Turns out this gambit, while legal and within Congressional rules, doesn’t play out as cleanly as I’d first surmised. John Nelson, a regular reader, brought to my attention that there are various ways Republicans can slow this process down to a crawl. The GOP could not filibuster the sidecar legislation because it is being considered under what’s called the reconciliation process. However, they may not need to. Under the rules governing the reconciliation process Republicans can introduce an almost unlimited number of amendments. While in theory the reconciliation process limits debate to 20 hours, the amendments could stretch out the debate for weeks.

As President Obama accurately noted during the health care reform summit, most Americans care more about the substance of health care reform than the process. However, it’s equally true that the legislative procedures used to push the issue this far have created a cloud over the substance of reform. Republicans have artfully used the messy give-and-take typical when drafting major legislation and cast it as a reason to oppose what was drafted. Some of these criticisms, such as the deals cut to favor specific states, are valid; others, such as condemning the legislation because the bills themselves are large, are spurious. But what’s undeniable is the drumbeat of criticism concerning process has undermined the substance of the bill (of course the serious problems with the substance of the bill hasn’t bolstered it’s popularity either).

If the Democrats could accomplish their legislative maneuvers quickly attention would shift to he substance of the legislation long before the November elections. In other words, like yanking off a bandage, the political pain generated by the process would be over quickly. If Republicans force Democrats to spend weeks mired in process, however, the political pain becomes increasingly greater – and perhaps unbearable.

What all this means is that the odds of comprehensive health care reform passing have improved considerably since the election of Scott Brown to the Senate from Massachusetts and the subsequent loss of the Democratic caucus’ 60 vote, filibuster-busting majority. But those odds haven’t increased as much as a I thought when I wrote about the three-step process Democrats would likely use to enact the reform legislation.

There are smart people on both sides of the issue. There are passionate people on both sides. The effort to pass – and to defeat – health care reform will continue. How it ends is anyone’s guess at this point.

The Congressional Health Care Reform Three-Step

President Barack Obama repeatedly tried to get the bipartisan summit on health care reform to focus on policy rather than process. Now that the summit is over, however, process is rightfully back on the table.

As I noted in my previous post, many of the major health care reforms of the past few decades have been accomplished through use of the reconciliation process. But how exactly would it be used this time for this reform?

Let’s review where reconciliation fits into the wonderful whacky world of the U.S. Senate. As you’ll recall, 41 Senators can invoke a filibuster and consequently prevent a bill from coming to the floor.  Only if 60 of their colleagues vote to close debate (by invoking cloture) can a bill be voted upon by the full Senate. (For an interesting history of the filibuster and cloture, check out the Senate’s web site). There is an exception, however. Since 1974, budget and tax related items can be brought to the floor of the Senate through a process known as “reconciliation” and no filibuster can stop it. So a key issue is, what matters are eligible for the reconciliation process?

Enter Senator Robert Byrd the widely acknowledged master parliamentarian of the U.S. Senate. He created what is known as the Byrd rule to help determine what is outside the reconciliation process. Put simply, the Byrd rule defines as “extraneous matter” items that do not impact government outlays or revenue in a substantive way. (It’s more complicated than that, but that’s the gist of it).

New taxes, and the health care reform process has plenty of them, are clearly within the purview of the reconciliation process. Preventing carriers from excluding pre-existing medical conditions from coverage is not.

What this means is that the Senate can not pass comprehensive health care reform through the reconciliation process. But hang with me here, because the fact is they don’t need to pass comprehensive health care reform through the reconciliation process because they already have. Remember? It was only a few weeks ago, on December 24th, 2009 to be precise. The Senate passed a comprehensive health care reform bill on a party-line 60-to-39 vote. yes, I know. It seems like ages ago, but it has only been a couple of months. And that affirmative act still stands.

So here’s the legislative three-step Democrats are likely to use to pass comprehensive health care reform.

Step One: The House votes on and passes the Senate version of health care reform.
Step Two: The Senate, using the reconciliation process, passes legislation to “fix” certain aspects of the health care reform it passed in the Senate.
Step Three: The House passes the Senate’s ‘clean-up” bill.

Both the Senate health insurance legislation and the clean-up bill arrive on the president’s desk. He signs them both into law.

What you may (and should) ask, would be in the clean-up bill? As previously predicted here, the follow-up bill is expected to remove state-specific funding elements such as the special treatment currently in the Senate bill favoring Nebraska, Louisiana and a few other states. The clean-up is also likely to change the criteria of a “Cadillac health plan” subjecting fewer policies from being subject to the proposed excise tax. Other fees and taxes would also likely be a part of the second bill. In other words, the clean-up bill would only relate to the budget and/or taxes, meeting the test of the Byrd rule.

I haven’t come up with this on my own. This legislative dance to enact health care reform was discussed at length on “Hardball with Chris Matthews” on MSNBC (the relevant discussion starts at about 3 minutes, 10 seconds in this clip, although he refers to it as a two-step process). What’s significant, however, is that it’s a strategy that makes sense (if your goal is to pass health care reform). Republicans will object that it’s ramming health care through Congress, but the GOP can’t claim the three-step violates Senate rules.

Many thought President Obama’s health care reform bill died with the election of Scott Brown to the Senate from Massachusetts on January 19, 2010. The odds are: they were wrong.

Reconciliation Puts Health Care Reform on Fast Track and GOP in Bind

Democrats in Congress are going to pass a budget resolution soon and, at President Barack Obama’s request, it will include reconciliation protection for health care reform. This undermines the ability of Republicans to block provisions in whatever bill emerges and would allow Congress to send legislation to the president’s desk without any Republican support.

Reconciliation protection is not new. Republicans used it when they controlled Congress over Democratic outcries of injustice. Now that the Democrats are in the majority the script remains the same, just the roles have been exchanged. The purpose of all this is to prevent the minority party using a filibuster to block legislation.

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A quick social studies refresher: It takes 51 votes to pass legislation in the Senate. However, any Senator can mount a filibuster which prevents the Senate from voting on a measure (movie buffs may remember Jimmy Stewart mounting a one-man filibuster in Mr. Smith Goes to Washington).  It takes 60 Senators shut down a filibuster by voting for “cloture“. 

Reconciliation protection means filibusters are not allowed. Democrats (and the Independents who caucus withthem) now number 58 Senators (with a 59th, Al Franken, on the way from Minnesotta). Consequently,  Democrats need only hold on to 50 votes to pass health care reform legislation. Vice President Joe Biden would be happy to provide the 51st vote. Not a single Republican vote would be needed.

And now back to our regularly scheduled post:

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Imposing a majority vote on legislation as controversial as health care reform is not common in Washington, but it has precedent. The cable news chatterboxes and talk radio will be spewing sound and fury over the injustice of it all, but that’s mostly partisan political posturing. Politics, after all, is the art of getting things done. Exploiting (or, if you’re in favor of what’s happening, “merely invoking”) the rules to achieve a goal is very much an American tradition.

Nor does reconcilliation mean Republicans will be excluded from the health care reform debate. The culture of the Senate promotes vigorous debate.  As evidence: leading Senators are referring to the expedited process as a tool of last resort. The Los Angeles Times, for example, reports Finance Committee Chair Senator Max Baucusas expressing the hope that Democrats can work with Republicans to pass health care reform.

The reason is that Democrats like Senator Baucus want to pass long lasting reform. They recognize that pendulums swing — even political ones. Indeed, given the political environment of the past few years it’s hard to see how long Democrats can sustain their large majorities in the House and Senate. Pragmatic leaders want to find common ground so the new health care system they create can withstand changes in the political tide.  “If we don’t use reconciliation, we are going to have a much more sustainable result,” the LA Times reports Senator Baucus as saying. “When we jam something down someone’s throat, it’s not sustainable.”

Republicans aren’t buying it. They claim reconciliation means health care reform will not be subject to vigorous debate. That’s not likely. The Democrats are simply not unified enough to ram something this controversial through the Senate. Instead, a group of 16 moderate Democrats in the Senate will assure that multiple perspectives are heard. And like many Republicans they’ve expressed concern about the cost of reform and the expanded government role in health care coverage being sought by many Democrats. Without the support of at least half this group, the Senate Leadership can’t move a bill forward even on a majority vote. 

Reconciliation will prevent a filibuster, not debate. That debate will be loud and vigorous. It also, however, greatly increases the likelihood that there will be a vote on health care reform, most likely by the Fall. Which puts the GOP in a bit of a dilemma.

Republicans can remain on the sidelines of the debate leaving Democrats to shape the reform legislation and inherit the blame (or credit) of whatever is signed into law. Either way, however, the GOP is marginalized and their brand as the party of “No” is solidified. Not a politically pleasant outcome.

Instead, Republicans can engage in the debate, put forward alternatives and work hard to find common ground with moderate Democrats to force some of their provisions into the final legislative packkage. Compromise, however, means they’d need to accept some provisions they strongly dislike. Further, Democrats will get the lion share of the credit for finally addressing health care reform.

Worse for Republicans, accepting any significant compromise could put them at odds with their base — and the Rush Limbaugh’s of their world who speak for that base and who apparently cannot be opposed. It’s not clear the substantive gains Republican Senators could obtain by working with moderate Democrats is worth the resulting political pain.

Unless the moderate Democrats prevent it, healthcare reform is coming, probably in the Fall. Reconciliation protection will see to that. The loss of a filibuster does not, in and of itself, mean there will be no debate. Nor does it make Republicans irrelevent to fashioning comprehensive reform.

Reconiliation cannot make Republicans irrelevant. Only Republicans can make Republicans irrelevent.