Finance Committee Senators: Reform Bill Trimmed To Less Than $1 Trillion

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Some senators on the Finance Committee said Thursday they've moved closer to cutting their health reform bill's cost to under $1 trillion.

The New York Times: "Senator Kent Conrad, Democrat of North Dakota, said the overall cost of the bill had been reduced mainly by limiting eligibility for various subsidies. Assistance would originally have been available to people with incomes up to 400 percent of the poverty level ($88,200 for a family of four). Democrats have lowered the ceiling to 300 percent of the poverty level ($66,150 for a family of four)."

"But as senators leave town for a weeklong Fourth of July break, Democrats are nowhere near where they had hoped to be. The Democrats had hoped that two Senate committees would approve the legislation by the end of this week. The measure could affect nearly every family, employer and health care provider in the country."

The bill is also likely to include mandates on employers to provide insurance for their employees, to tax those benefits and to scale back Medicare payment rates. "Senators said the cost of the bill might also be reduced by dropping or scaling back a plan to give tax credits to small businesses, to help them buy insurance. (Sen. Max) Baucus, (D-Mont.,) like House Democrats, wants to expand Medicaid to cover millions more people. But to save money, he and other Senate Democrats may delay the start of the expansion for three years, to 2013." Republicans in the Senate Finance Committee hoped to have a deal announced Thursday, but instead promised to keep working (Pear, 6/25).

The goal now is to finish a bill shortly after the 4th of July recess that is deficit-neutral, Baucus said, according to The Washington Post. "As described by aides and lawmakers on the Senate Finance Committee, the financing package includes substantial reductions in future spending on Medicare and Medicaid, the primary federal health programs for elderly and low-income people. In addition to trimming payments to hospitals and other providers, the panel is considering empowering an existing federal agency, known as MedPAC, to monitor Medicare costs and make adjustments unless Congress objects. The shift would take much Medicare authority out of the political process, diminishing the health-care industry's lobbying power" (Murray and Montgomery, 6/26).

The Associated Press: "'There's not a final bill that's agreed to. What there is now is a clear path to having a bill that is paid for,' said Sen. Kent Conrad, D-N.D., one of seven Republican and Democratic Finance Committee senators who've been working closely on the deal. Baucus has dubbed the group 'the coalition of the willing.' All seven issued a brief, joint statement later Thursday claiming progress, even though some Republicans involved made no secret of their skepticism."
"Aides said the Congressional Budget Office had estimated that the elements under consideration would extend coverage to 97 percent of the population, excluding illegal immigrants" (Werner and Espo, 6/26).

Roll Call: "The statement, signed onto by Finance Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa), comes after a week of furious negotiations on a bipartisan health care bill. Lending their names to the statement were Senate Budget Chairman Kent Conrad (D-N.D.); Health, Education, Labor and Pensions ranking member Mike Enzi (R-Wyo.); and Sens. Jeff Bingaman (D-N.M.), Orrin Hatch (R-Utah) and Olympia Snowe (R-Maine)."
"Baucus' enthusiasm is due in part to a recent Congressional Budget Office score of various policy options that puts the costs of a bill at less than $1 trillion over 10 years. The CBO also has scored those options as deficit neutral. Baucus revealed this information to reporters earlier Thursday" (Drucker, 6/25).

The Wall Street Journal: "The development came as the CBO issued a new forecast projecting that rising health costs will put increasing pressure on the federal budget. The nonpartisan office projects that if current laws do not change, federal spending on Medicare and Medicaid combined will grow from almost 5% of GDP today to almost 10% by 2035" (Adamy and Hitt, 6/25).

Politico: "The early outlines of the Finance Committee package reflect their middle-of-the-road leanings, but also the politics of the Senate, where supermajority deal making is often the only way to move a bill. They are drawing high-level attention, too. White House health reform director Nancy-Ann DeParle spent time Wednesday with the four Republican senators, and promised to bring their message back to the president" (Brown, 6/26).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.