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Olympia Snowe's Amendments

PH2009091901897.jpgIt's becoming pretty common for Hill and administration sources to tell me that "Olympia Snowe is more of a Democrat than some of the Democrats." What they mean by that is that she's pushing for a level of affordability and subsidies and consumer protections that far surpass what the Democratic swing votes are interested in. But is it true?

Here's a full summary of the amendments Snowe has offered. Her unique role in the debate means they're pretty likely to be adopted, and their adoption could potentially win her over to the bill. But are they any good?

After reading every one, I have to say: they're almost all worthy changes to the bill. Snowe vastly strengthens the exchanges, which is a huge deal. She expands subsidies to more people, sets limits on high deductible plans, and weakens the penalty in the individual mandate. If I'd read this list of amendments without an attached author, I would indeed have thought they came from a moderate, though not particularly conservative, Democrat.

Coverage:

1) The public plan "trigger," which I detailed here.

2) The current bill doesn't allow an employee who is offered insurance to seek help and tax credits on the exchange unless the employer's insurance would cost more than 13 percent of their income. Snowe's amendment "modifies the affordability test for granting access to subsidized Exchange coverage, scaling the criteria from 3 percent at 133 percent of poverty to 13 percent at 300 percent of poverty." Good!

3) The current bill allows small businesses with up to 50 employees to enter the exchange, and states can raise that to small businesses with up to 100 employees if they wish. Snowe's amendment makes this 100 employees from the outset. Good!

4) The current bill tells states to expand Medicaid to 133 percent of poverty in 2014. Snowe's amendment would allow them to expand to 100 percent of poverty in 2014, and "then phase in Medicaid eligibility to 133 percent of poverty more gradually." Seems bad, though potentially responsive to implementation issues I'm unaware of.

5) The current bill directs states to maintain their current Medicaid eligibility standards until the exchange starts up in 2013. Snowe's amendment would only direct that they maintain their eligibility standards up to 133 percent of poverty -- states that cover above that could drop their coverage. Bad!

6) The current bill doesn't set a maximum deductible for employer-based coverage above what the health savings account rules allow. Since those rules permit out-of-pocket spending of $5,950 for individuals and $11,900 for families, the deductibles could be incredibly high. Snowe's amendment "require[s] that an employer offering coverage shall not provide a plan with a deductible which exceeds $2,000 for individuals and $4,000 for families, unless offering contributions which offset any increase in deductible above these limits." Extremely good!

7) The current bill phases the small group market's insurance regulations into place over five years -- beginning, if I remember correctly, in 2013. This amendment accelerates that timetable so "all rating reforms are in place no later than January 1, 2014." Good!

8) The current bill directs the states to create five-year plans for including large employers in the exchange in 2017. This amendment would allow them to enter the exchange in 2013. This is a very good, totally awesome, hugely important amendment. It effectively opens the exchanges to all employers from the get-go.

9) "This amendment would allow Small Business Development Centers (SBDCs), a resource partner of the Small Business Administration, to participate in the competitive grant program." Seems fine.

10) This amendment ensures that small businesses that grow bigger can remain in the exchange. Imagine a 47-person business has been getting health insurance from the exchange, but they become a 107-person business. If this amendment is passed, they get to keep their current coverage. Good!

11) This amendments would require plans in the exchange to cover early periodic screening, diagnosis and treatment, which is very important for kids. Good!

12) This amendment allows states to access increased Medicaid funding for enrolling people who are currently eligible but simply unenrolled. Good!

Financing:

1) Snowe partnered with John Kerry and Maria Cantwell on this amendment to soften the excise tax: It would make sure the cap grows a little bit faster so it doesn't begin to tax average policies (at least not as quickly), and it permanently raises the cap for individuals and families between 55 and 65 years of age. Good!

2) A revision to adjustments to payment updates that I'm not qualified to evaluate.

3) Allow people to put more money in their tax-free flexible spending accounts. Good!

4) This amendment reduces the penalty on the individual mandates, though it doesn't say by how much. I'm coming to the view that that's good, though I wouldn't drop it too far down.

5) This amendment would eliminate the individual mandate penalty, and replace it with something called a "defined minimum contribution," which would also ensure access to limited health services. This seems like a potentially good idea, at least from a political perspective. Penalties don't poll well. The devil, however, will be in the details, and right now there aren't any.

6) Directs Medicaid to extend the "prompt pay" rules -- which directs Medicaid to pay claims very quickly -- to hospitals and nursing homes.

7) "The amendment would allow small business owners to be considered as employees in order to enable them to participate in a cafeteria plan." Seems fine.

8) "This amendment would state that it is the Sense of the Senate that the Senate should not waive the Senate Pay-As-You-Go point of order and the Senate point of order against long-term deficits when considering future legislation that would amend a final bill." In other words, it's this Senate politely asking future Senates not to bust the budget when amending the bill. It's not, however, binding in any way.

9) Protects HIPPA-excluded insurance plans from the excise tax. I don't know much about those plans.

Delivery System:

1) "Establishes a three-year, $75 million demonstration project that would allow Medicaid funding to be directed to non-publicly owned and operated psychiatric hospitals for Medicaid beneficiaries between the ages of 21-64 who require stabilization in these settings as required by the Emergency Medical Treatment and Active Labor Act."

2) "Directs CMS to develop national standards regarding air ambulances to ensure quality patient care delivery and safety of the aircraft."

Photo credit: By Karin Cooper -- CBS Face the Nation via Associated Press

By Ezra Klein  |  September 21, 2009; 11:44 AM ET
Categories:  Health Reform  
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Comments

Snowe is unique among GOPers in having a quaint interest in actually solving problems, although often not the way we would prefer. But still. No wonder Obama likes her.

The less liberal Dems don't really have such an interest and/or they are completely bought. But that is to all accounts what sets her apart from the rest of the GOP.

Obviously the Dems have made it clear they would welcome her but whether she would change (given ME is turning bright blue) would depend on what the GOP does if she defects in significant ways.

Posted by: Mimikatz | September 21, 2009 11:54 AM | Report abuse

Pretty good amendments over all. I especially like her her "minimum contribution" amendment. Instead of an excise "tax" people would be requred to give a "minimum contribution" that would go towards certain health care benefits.

Thus people will feel that it is less of a "tax" and penalty. Instead it will be an actual benefit.

Posted by: maritza1 | September 21, 2009 11:57 AM | Report abuse

Snowe understands the scope of being a public servant, though elected by only some taxpayers, mandated to represent ALL of them. Her calm, incisive, persistent determination to do what needs to be done, regardless of how cruelly and ridiculously other legislators respond to her efforts, reflects the very best interpretation of civic responsibility in the social contract that is our government.

Posted by: jillzimon | September 21, 2009 12:00 PM | Report abuse

Is there anything in any of the amendments that would stop lifetime and annual caps for plans outside of the exchange?

Posted by: thescuspeaks | September 21, 2009 12:08 PM | Report abuse

Good work, Ezra.

Posted by: wisewon | September 21, 2009 12:09 PM | Report abuse


Yeah, 4 and 5 under coverage seem strange to me too. Didn't Baucus' bill also have the feds picking up the Medicaid expansion or was that only in the HELP bill? I think I'm mixing them up. It seems like she's gotten pressure to soften the financial blow to the states for the medicaid expansion (a huge blow, incidentally).

Overall it's a somewhat unsatisfying piece of incrementalism but yeah, i'll take it.

Posted by: ThomasEN | September 21, 2009 12:13 PM | Report abuse

Many of these points deserve their own discussion. From what I understand Snowe was allowed to essentially write the Chairman's mark, so these amendments are mainly her fringiest ideas which Someone Who Matters has already vetoed.

Her unifying philosphy seems to be pro-health care industry. Some ideas are pro-business. Others seem bizarrely populist. For example, what happens when Coverage Item 6 meets the reality of crappy Walmart plans?

Posted by: bmull | September 21, 2009 12:14 PM | Report abuse

Snowe's trigger amendment isn't policy. "This amendment establishes a non-profit government corporation through which a “safety net” plan would be provided in any state in which affordable coverage was not available in the Exchange to at least 95% of state residents."

Who’s in the 5% who aren’t offered anything? How will they be covered?

Triggers are fake options and are designed never to be pulled, which is why they make bad policy.

Here's Lindsay Graham on MTP yesterday:

"When he says it won’t add a penny to the deficit, then the next sentence out of his mouth, “And if it does we’ll pull a trigger to stop the spending.” We’ve never pulled any triggers in any other bills."

One more time: We’ve never pulled any triggers in any other bills.

What on earth makes you think it will happen this time, Ezra?

Posted by: cab91 | September 21, 2009 12:20 PM | Report abuse

So, I didn't have to read far into the amendments to come across ones dealing with lifetime caps. I am still unclear, do grandfathered plans refer to individual market plans, or employer based ones as well?

Also, there will be a five years before those plans have to give up their caps? My parents are coming soon to their lifetime limits, my understanding is that even if this amendment is passed, nothing will help them, right?

Posted by: thescuspeaks | September 21, 2009 12:27 PM | Report abuse

I applaud the President and Senator Snowe to have the good sense to keep working together. Bipartisanship is a two-way street and it appears that Senatore Snowe is the only Republican willing to take on that mantle. If there were more Republicans like her, voters (outside of Maine) would at least have a choice between parties. Right now, those of us who are socially liberal to moderate, and fiscally moderate can only pull the lever for a dysfunctional Democratic party willing to do the job they're paid to do, i.e., legislate, albeit in a fractious manner. The GOP today is nothing more than a fraternity of Southern Republican Dixiecrats, and those who've imbibed their ghastly cultural values and lack of responsibility. This party is virtually unrecognizable from the party of Lincoln, Goldwater or for that matter, even Ronald Reagan. Senator Snowe herself stated that while her Republican values have stayed rock solid, the party has moved way to the right of her.

Posted by: jaysit | September 21, 2009 12:46 PM | Report abuse

Item #5 on that list represents better wording of the idea: it has always been a "defined minimum contribution", but saying that it is seems to make more sense to everyone.

Posted by: rmgregory | September 21, 2009 12:53 PM | Report abuse

I really hope they pass an amendment to remove the corporate reporting proposal, hidden on page 208, a massive new paperwork burden for small businesses...
http://bizzgov.com/blog1/?p=23

Posted by: fitiwalt1 | September 21, 2009 1:18 PM | Report abuse

Excellent - kudos to Sen. Snowe, and thanks to you, Ezra.

This process is what makes working together better than apart. Let's hope to see more of this.

Are there any other courageous Congressionals out there?

Posted by: chicago11 | September 21, 2009 1:55 PM | Report abuse

What about Senators who will be interested in pushing some 'bombs' in the name of amendments? For example, anything coming from Kent Conard or Ben Nelson which will torpedo this bill?

Otherwise good information and run down by Ezra. Thanks for the reporting.

Posted by: umesh409 | September 21, 2009 3:40 PM | Report abuse

umesh4009: "anything coming from Kent Conard or Ben Nelson which will torpedo this bill?"

Not necessary. This bill is self-torping.

Posted by: bmull | September 21, 2009 3:48 PM | Report abuse

No trigger has worked to ease exorbitant prescription drug costs. Why would a delayed-action trigger work to ease skyrocketing insurance costs?

Why not include a public option at the outset while writing into healthcare reform legislation a sunset provision of perhaps five years for the initial term of this public option. Then the claimed efficacy of the public option for reducing costs, enhancing affordability, and improving the quality of care can be properly evaluated, and the public option either dropped or resumed on the basis of results rather than ideology.

Posted by: FirstMouse1 | September 21, 2009 5:05 PM | Report abuse

I agree with FirstMouse1 in saying "why a late-acting trigger?" People are dying for no reason today. How about getting this thing moving. Everything else is a work in progress, why does this piece have to be dragged out? At least Snowe seems like she knows what she wants. The rest of the Republicans seem confused as to why they're even in government.

Posted by: fbutler1 | September 21, 2009 6:41 PM | Report abuse

jillzimon,great comment ,my thoughts exactly.

Posted by: donaldtucker | September 21, 2009 6:45 PM | Report abuse

I'll let others debate the arcana of the various parts of the health care proposals (it's been a long day and I'm tired, and I'm no wonk in the first place). But I do want to praise Olympia Snow (and not just because she comes from the state of my ancestors) for being a person who values statesmanship over partisan loyalty. I wish more legislators from BOTH sides of the aisle were like her.

Does that mean that I think that she's right about everything? Of course not. And she does have responsibility for representing the people of Maine--if she drifts too far from what they want, they'll replace her, and they should. But she also has responsibility to the nation as well, and she's meeting it. I would hope that the hyper-partisans on both sides would learn from her example.

But I'm not holding my breath.

Posted by: post_reader_in_wv | September 21, 2009 7:29 PM | Report abuse

Another politician from the school of though, "more use of power is good use of power". Ad-hoc numbers and regulations will add more non-sense to an already heavily regulated (and therefore highly expensive) healthcare/ Yet another jewel in the crown of Federal govt's achievements. After it's adventures in housing, finance, higher education and energy, the fed is out to give a finishing blow to a tortured healthcare sector. After this economic crises, perhaps people won't say this time that they didn't see it coming.

Posted by: NoWeCant | September 21, 2009 7:34 PM | Report abuse

Mr. Klein, you said you didn't know much about HIPAA plans. I do. Because I have a pre-existing condition, I'm being forced by insurance companies in California into a HIPAA plan.

Given my zip code, I have four choices of Calif. approved plans. The differences in monthly rates amongst them all is $25. But the average amounts to $900/mo with a $2000 deductible for an 80/20 plan. That amounts to $12,800/annually before getting to the 20% additional costs and copays. Because of the over 12% unememployment in CA, I'm surviving on unemployment of $22,800 gross per year. What this kind of health insurance policy means is that, before taxes, I would have $10,000/yr to live on, to pay rent, utilities, food, other insurance, etc.

Because I'm a single individual, my income is over the limit for Medicaid according to FPL so I'm left with no choice but to buy HIPAA insurance to help pay for my condition and not pay rent (move into my car?) or to pay rent and allow my condition to increasing worsen until I have to enter a hospital at the public's expense. Neither is a choice I wish to make.

When HIPAA was brought into being, it was designed to allow people to carry insurance from one employer to another, hence the "portability" in the name. However, the premiums skyrocketed to such a degree that no one can afford them.

As a backdrop to the cost issue, my COBRA payments - the combined amount of what my company had contributed plus my contribution towards my health insurance and a 2% administrative fee - for an 80/20 plan with no deductible amounted to $4,068/annually.

The difference between Cobra and HIPAA amounts to about $8,700. So what causes this significant difference in cost?

The Cobra policy was based on the rate given to an employer with several thousand employees, thus spreading the risk and costs amongst all the employees. A HIPAA policy is totally individual. No risk spreading, thus no reduction of costs.

And because insurers see no financial benefit to insuring people with any pre-existing condition, they have no incentive to reduce costs or create large pools of people to spread risk...which might reduce individual policy holder costs.

Posted by: valkayec | September 21, 2009 8:33 PM | Report abuse

is it me or does olympia snowe look like howard stern's twin sister in that picture?

Posted by: visionbrkr | September 21, 2009 9:56 PM | Report abuse

so if the "defined minimum contribution" ammendment passes in its form here and people run out of benefits in a short period of time and run into higher out of pocket costs to themselves and they complain about it whose fault is it? I'm sorry but the individual mandate penalty has to be at least 50% of an average plan otherwise you won't get the participation you need to make this viable. The healthy "young invincibles" will pay the tax and go uncovered and the sick will gladly take the insurance, plain and simple. Just like what happens in MA but to a much greater level because their individual mandate penalty is great than what Snowe proposes here.

Posted by: visionbrkr | September 21, 2009 10:07 PM | Report abuse

Good for Senator Snowe, and I say that as a far left liberal. I think this country would be in a different situation than it is today if more of our elected politicians worked as hard as she did, even if I disagree with a lot of what she says and votes for (though much less so than other Republicans).

I don't quite understand the reduction in Medicaid that she proposes. Medicaid, for all of its faults, is relatively successful in a lot of States. It is cheap to run and offers States more control over spending and I would think that this would appeal to Republicans more so than a Public Option.

Posted by: pmax | September 21, 2009 10:35 PM | Report abuse

I am confused about the description of #5. It reads as though before a snowe amendment, the bill requires that states keep their eligility rules in place until the exchanges are in place bu then can eliminate all non-mandatory coverage. Under the snowe amendment, even after the exchanges a minimum threshold would be set at 133% FPL. Is that what Mr. Klein means? If that were the case, then the Snowe amendment might be viewed as more favorable to the poor ie it maintains coverage. If he means that the Snowe amendment only extends current eligibility up to 133% FPL until the exchanges are in place and thereafter under the snowe amendment is in place, there are no rules except the mandatory medicaid coverage groups, then that would indeed be less favorable to the poor. Can someone explain which of these is the case?
For #11, the EPSDT coverage is good provided there are limits on what the patient has to pay. Currently, Walmart "covers" immunizations but has a dollar limit. Likewise, they "cover" mammmograms but only pay $60 toward them. This is not real coverage and they know it.

Posted by: ordinarymom | September 21, 2009 10:53 PM | Report abuse

North Korea should stop launch missile into the Sea of Japan

Posted by: makaay | September 22, 2009 8:26 AM | Report abuse

Coverage #4 & #5 Address serious concerns from states that the current proposals create unfunded mandates which could constrain already limited state budgets.

While larger medicaid spending is a good idea, I can understand exercising prudence on these issues. It would be a bad thing for the whole reform if there is a major push from states to repeal it.

Posted by: zosima | September 22, 2009 12:28 PM | Report abuse

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