Obama Administration Officials Consider Using Budget Reconciliation Process To Push Through Health Care Overhaul, Other Priorities

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health
Article Date: 19 Mar 2009 - 5:00 PDT

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Senior members of the administration of President Obama "are pressing lawmakers" to use the budget reconciliation process, which allows legislation to move through the Senate without the threat of a filibuster, to pass his proposals for health care reform and other issues, the Washington Post reports. Administration officials said that they have not made a final decision about whether to use the process, but White House Office of Management and Budget Director Peter Orszag on Tuesday during a Christian Science Monitor luncheon said that it is "premature to be taking it off the table" (Montgomery, Washington Post, 3/18). Orszag said, "It is not where we would like to start," adding, "I am aware, and the president is aware, of the concerns that have been expressed, especially by Republicans" (Maggs, CongressDaily, 3/18).

House Majority Leader Steny Hoyer (D-Md.) said that congressional Democratic leaders might use the reconciliation process (Bettelheim, CQ Today, 3/17). Senate Majority Leader Harry Reid (D-Nev.) said that he has made no decision on whether to use the process (Sanchez, CongressDaily, 3/18). Senate Finance Committee Chair Max Baucus (D-Mont.) previously has said that he opposes the use of budget reconciliation to pass health care reform legislation.

Congressional Republicans criticized the potential use of the process, which the Post reports "could irrevocably damage relations with the new president" (Montgomery, Washington Post, 3/18).

Budget
Obama on Tuesday said that he will continue to seek passage of his proposals for health care reform and other issues during the debate on his $3.55 trillion fiscal year 2010 budget plan, despite the prospect of higher deficits, CQ Today reports.

After a meeting with Senate Budget Committee Chair Kent Conrad (D-N.D.) and House Budget Committee Chair John Spratt (D-S.C.), Obama said that his budget plan, which includes a $634 billion health care reserve fund, is necessary to provide "an economic blueprint for the future" (Bettelheim, CQ Today, 3/17). Conrad and Spratt told Obama that they would seek to pass a budget plan designed to reflect his priorities on health care and other issues but added that they would need to make some adjustments to his proposal (Cooper/Hulse, New York Times, 3/18).

Obama in his budget plan estimates a $1.17 trillion deficit for FY 2010. This week, the Congressional Budget Office plans to release a score of the proposal (Bettelheim, CQ Today, 3/17).

Reid on Tuesday said that he expects the House and Senate Budget committees to draft and debate their budget plans next week, with votes by both full chambers expected in two weeks (Cooper/Hulse, New York Times, 3/18). Hoyer said that the House plans to consider a budget plan during the week of March 30 (Sands, Washington Times, 3/17).

Health Care Reform Could Cost $1.5T
The Obama proposal to expand health insurance to all U.S. residents could cost about $1.5 trillion over the next 10 years, according to health policy experts, the AP/Seattle Post-Intelligencer reports. According to the AP/Post-Intelligencer, administration officials have "pointedly avoided providing a ballpark estimate for Obama's fix, saying it depends on details to be worked out with Congress."

White House spokesperson Reid Cherlin said, "It's impossible to put a price tag on the plan before even the basics have been finalized," adding, "Here's what we do know: The reserve fund in the president's budget is fully paid for and provides a substantial down payment on the cost of reforming our health care system." Earlier this month, Orszag said that, although the reserve fund is "likely to be the majority of the cost," the amount of the cost covered by the fund "will depend on the details of whatever is finally done ... as we move through the legislative process."

John Sheils, a senior vice president of the Lewin Group, said providing health insurance to all U.S. residents likely would cost between $1.5 trillion and $1.7 trillion over the next 10 years. In an interview, Sheils said that the cost is "a difficult hurdle to get over." He added, "I don't know where the rest of the money is going to come from."

John Rother, public policy director for AARP, last week during a health insurance industry meeting in Washington, D.C., said, "Honestly ... we can't do it for the $634 billion the president put in the reserve fund," adding, "In all likelihood, it will be over $1 trillion," likely $1.5 trillion.

Economist Len Nichols, head of the health policy project at the New America Foundation, cited the cost at between $125 billion and $150 billion annually.

David Walker, a former U.S. comptroller general and current head of the Peter G. Peterson Foundation, said, "We are dealing with huge numbers," adding, "We need to have a much better sense of what we are talking about doing, and whether or not it's affordable and sustainable over time" (Alonso-Zaldivar, AP/Seattle Post-Intelligencer, 3/18).

Second White House Regional Forum on Health Reform
In related news, the White House on Tuesday hosted the second of five regional health care reform forums in Burlington, Vt., to solicit proposals from participants, the AP/Seattle Times reports. Massachusetts Gov. Deval Patrick (D); Vermont Gov. Jim Douglas (D); and Nancy-Ann DeParle, director of the White House Office for Health Reform, hosted the White House Regional Forum on Health Reform.

During the forum, Patrick and Douglas served as moderators and discussed efforts by their states to expand health insurance to more residents and increase access to preventive care. According to the AP/Times, the "recurrent themes were improving the delivery of preventive care to reduce emergency room visits, eliminating administrative costs and increasing the use of 'community care teams' that serve rural patients."

The White House will host the final three forums in Iowa, North Carolina and California through early April (Curran, AP/Seattle Times, 3/17).

No Federal Employees Health Benefits Program Expansion
The Obama administration might use the Federal Employees Health Benefits Program as a model for a public health care plan but will not seek to expand access to the program as part of a reform proposal, HHS official Neera Tanden said on Monday at the annual FEHB carrier conference, the Post reports. Tanden said, "What we're very impressed by in the FEHB is that it's a large pool that functions very well," but the administration seeks to "ensure that it's separate." She added that FEHB is "just a model for reform."

According to the Post, the comments provided some "relief to federal employees and retirees who had feared that such an expansion would eventually result in their rates going up" (Davidson, Washington Post, 3/18).

Congressional Efforts
In Congress, three "powerful" House committee chairs -- House Education and Labor Committee Chair George Miller (D-Calif.), House Energy and Commerce Committee Chair Henry Waxman (D-Calif.) and House Ways and Means Committee Chair Charles Rangel (D-N.Y.)-- have agreed to work together on health care reform legislation, the New York Times reports. According to Miller, Waxman and Rangel, most employers should help cover the cost of health insurance for employees, and the federal government should offer a public health plan to compete with private plans. In addition, the Times reports that "they had informally agreed to plow ahead on the assumptions that individuals would be required to carry insurance."

Miller said that the three lawmakers have decided to "try and work as one committee" to produce health care legislation by this summer. Waxman said that he hopes to have the full House consider the legislation before the August recess.

According to the New York Times, the agreement, "while no guarantee of success, could help build momentum for a bill" and "make it harder for lobbyists to derail legislation" (Pear, New York Times, 3/18).

On Tuesday during a House Energy and Commerce Health Subcommittee hearing, subcommittee Democrats and Republicans discussed health care legislation. They agreed on the need to expand community health centers and provide the public with more information about the cost of medical services but disagreed on a number of other issues "that are unlikely to be resolved before the full panel considers legislation to overhaul health care," CQ HealthBeat reports. The issues included the effectiveness of Medicare Advantage, the amount that undocumented immigrants contribute to increases in health care costs and a proposal to establish a public health plan to compete with private plans (Adams, CQ HealthBeat, 3/17).

At the hearing, subcommittee Democrats used the latest recommendations by the Medicare Payment Advisory Commission to make the case for the establishment of the public health plan (Wayne, CQ Today, 3/17). Subcommittee Chair Pete Stark (D-Calif.) said that implementation of the recommendations could reduce costs for Medicare (Reichard, CQ HealthBeat, 3/17).

Medical Device Companies
The Wall Street Journal on Wednesday examined how the "prospects of U.S. health care reform and cuts to medical spending have sparked big worries about a squeeze on medical device companies." After Obama released his budget plan -- which "didn't spell out any direct impact for products like heart devices or replacement hips, but it did inflame long-running worries that pressure on product prices could emerge" -- stock prices for medical device companies "tumbled sharply," the Journal reports. "While some observers believe the share sell-off went too far, with device companies swept up in a mass dumping of health care stocks, these worries may prove hard to shake," according to the Journal (Kamp, Wall Street Journal, 3/18).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

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