The White House healthcare reform proposal was released early this morning. In a conference call with reporters this morning, White House staff walked through the top lines of the proposal, which uses the Senate as a base bill and makes some nods to issues raised by the House.
Most of the new provisions are devised to pass through a reconciliation package. Dan Pfeiffer, on the call, stressed a couple of times that the "American people deserve and up or down vote" on healthcare reform, and said that the White House specifically designed this package to work through reconciliation. While they "hope Republicans will come together" behind their own proposal and make it available before Thursday, it wold seem the White House isn't holding their breath on that happening, or any real movement from Republicans in support of the effort.
The basic changes from the Senate bill are detailed by David Dayen, who was on the call.
• Affordability. The subsidies improve upon the Senate bill, particularly at the low end, but also between 250-400% of poverty, where the maximum amount of income paid out of pocket as in insurance premium dips from 9.8% to 9.5%. The actuarial value also increases at the low end slightly, from 133% to 250% of poverty. For instance, instead of a 70% actuarial value at 250% of poverty, the number rises to 73%. These are cosmetic but tangible changes upward from the Senate bill.
• Donut hole. The donut hole, where Medicare Part D subscribers pay out of pocket for prescription drugs above a certain amount, would now get closed by this legislation....
• Rate review: This is the Health Insurance Rate Authority proposal from Sen. Feinstein that I mentioned last night. Again, I cannot see how this becomes germane through a reconciliation process. I asked Dan Pfeiffer today if they took that into account when crafting the proposal, and he said they did, although he added that “These calls are made by Senate parliamentarian.” In other words, this piece may get flagged by the parliamentarian, in which case the Senate could vote on waiving the Byrd rule, which would take 60 votes to overcome. That could be the plan, to force a clean vote for Republicans between the people and the insurance industry. This part of the bill would also require states that do not currently conduct rate review to do so.
• Losing the Cornhusker Kickback. The bill cancels the Nebraska deal to pay out their expansion of Medicaid coverage in perpetuity. However it adds serious assistance to states for the expansion, adding a year to cover the full cost (until 2014), upping funding to 95% through 2018 and 90% thereafter, with more money for states that already have expanded their coverage. Basically, the “unfunded mandate” of expanding Medicaid is extremely small....
• Excise tax. Essentially, the changes mirror the deal already worked out between the White House and labor to tweak the excise tax, although the bill raises the threshold for the excise tax all the way up to $27,500, higher than previously suggested. Nothing in the excise tax exempts collectively bargained plans – the changes specifically for labor now apply to all plans. This will allow the tax to, in the words of Jason Furman of OMB, “focus on the costliest plans, not the costliest workers.”
• Individual and employer responsibility. To make up some of the money from the tweaks to the excise tax, increase in FMAP funding for states and the improved affordability credits, the bill adds a variety of provisions. One of the ways is by increasing the penalties for the individual mandate and the employer responsibility. The hard dollar amounts are actually smaller for the individual mandate, but the percentage of income has increased. Basically it adopts the percentages from the House bill. The “hardship” exemption on affordability, exempting those who cannot find coverage that costs a certain percentage of income, remains.
On employer responsibility, the penalties are jacked up significantly, though there’s an exemption for the first 30 employees). The penalty goes from $750 per worker to $2,000....
There are additional Medicare and Medicaid waste, fraud, and abuse measures, many of which were proposed by Republicans in committee. Other offsets include lower Medicare Advantage payments, an additional $10 billion from PhRMA, extending the payroll tax and Medicare hospital insurance tax to unearned income, and a couple of tax loopholes will be closed. The revenue provisions would all easily fit into a reconciliation bill.
The public option is not included, and the Nelson abortion language remains. And a major element that's been key for the House, and which earlier leaks from the White House indicated would be included isn't there: the national exchange. It's possible that they couldn't figure out how to jam that in to a reconciliation package, and the insurer oversight proposal could help bridge the gaps created by not having a federal exchange.
The strong message from the White House is that they are prepared to use reconciliation to pass this bill, with Pfeiffer reiterating their need for an "up or down" vote on reform, breaking a Republican filibuster as needed.
There's ongoing discussion in Cedwyn's diary.