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Previewing the final health-care bill


EJ Dionne sketches out the likely outcome of the House-Senate negotiations:

Over the past week, I've talked with key figures in the House, Senate and White House, and the outlines of a deal are becoming reasonably clear. The public option is, alas, dead. But the idea of setting up a national insurance exchange -- alongside state exchanges -- where the uninsured can buy coverage is very much alive. The House is demanding this as the price for giving up on the public plan, and a national exchange would provide for much more consumer-friendly regulation of health insurance policies.

Almost everyone in both houses wants to find ways of making insurance more affordable. Steps in this direction would include more generous subsidies for the purchase of insurance than those in the Senate bill and expanding its Medicaid provisions. The bill's price tag will grow from the Senate's $871 billion over a decade, probably to somewhere between $930 billion and $950 billion.

The tax on "Cadillac" insurance plans, opposed by both organized labor and the insurance industry, is likely to be scaled back but not eliminated. Currently, the Senate bill includes a 40 percent excise tax on high-end health insurance plans -- those at or above $23,000 for families and $8,500 for individuals.

Many opponents would settle for raising that ceiling to $28,000 for families, with a comparable increase for individuals. That would reduce the number of policyholders covered by the levy. But because of fierce resistance to the tax from a large group of House Democrats, this could prove to be one of the most vexing issues in the negotiations.

In the meantime, negotiators are looking to extend to all states a version of the special deal that saved Sen. Ben Nelson's home state of Nebraska from the bill's increased Medicaid costs. Nelson himself is pushing for this change, which would cost $25 billion to $30 billion over 10 years. One solution: somewhat more modest across-the-board Medicaid relief to all states.

This basically tracks with what I'm hearing. The Medicare Commission remains unsettled, and the way the excise tax is valued might change. In particular, it may be tied to actuarial value rather than total cost, or it may account more directly for age. The precise mix of insurance regulations might shift as well, as the House has a stronger set than the Senate does. But broadly speaking, people aren't expecting much in the way of surprises.

Photo credit: AP Photo/J. Scott Applewhite.

By Ezra Klein  |  January 12, 2010; 9:53 AM ET
Categories:  Health Reform  
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"The Medicare Commission remains unsettled, and the way the excise tax is valued might change."

So how about this: if these things are basically thrown to the wayside remaining in name only, we stop using the words "cost control" in connection with this bill.


Posted by: wisewon | January 12, 2010 10:06 AM | Report abuse

hmm, I'm wondering about tying the excise tax to actuarial value. That might make some people more comfortable. Though, remember that cadillac plans not only have less cost sharing, they also happen to cover things that other plans don't as part of their benefit package (IVF, adoption, egg-freezing, mostly expensive fertility-type services). Not sure how that would play out.

I'd also have a strong employer mandate in my health reform fantasy draft and, like wisewon, a Medicare Commission more like the Federal Reserve board, and less like a glorified Utilization Management Committee.

Posted by: ThomasEN | January 12, 2010 10:54 AM | Report abuse

"...people aren't expecting much in the way of surprises."

They never do, do they? They are always surprising, those surprises.

Posted by: mattalvarado | January 12, 2010 11:01 AM | Report abuse

If the House can get the Cadillac tax limited to expensive plans with low actuarial value, that would be a significant concession. The rest is mostly window dressing.

Posted by: bmull | January 12, 2010 12:29 PM | Report abuse

"Almost everyone in both houses wants to find ways of making insurance more affordable"

But not by making health care more affordable...nooo, that would be too hard. We'll just demand to pay less for insurance and force the insurance providers to lower costs by denying more claims and taking higher cost providers out of their plans.

Posted by: staticvars | January 12, 2010 2:56 PM | Report abuse

Why is the Senate so opposed to the public option? It would cost almost nothing extra to have, and would create less of a burden on taxpayers.

Posted by: JustinB1 | January 12, 2010 11:05 PM | Report abuse

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