How the Senate will whittle away at the House health care reform bill.

How to fix health policy.
Nov. 8 2009 5:41 PM

Watch It Shrink

Think the House health care reform bill's too long? Not after the Senate whittles away at it.

Click here for a guide to following the health care reform story online.

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Affordability. All versions of the health care reform bill require virtually every American to possess health insurance. It is therefore no small challenge for Congress to make sure that the private and/or public health insurance policies made newly available to the uninsured be affordable. The House bill provides tax credits on a sliding scale for incomes up to about $88,000 for a family of four. These would limit out-of-pocket costs for premiums to 1.5 percent of income for the poorest families and 12 percent of income for families earning $88,000. The Senate finance committee bill, which likely will set the affordability guidelines for the blended bill, offers a similar sliding scale of subsidies for incomes up to $88,000, but it's stingier. The subsidies start at 2 percent of income, not 1.5 percent, and they hit the 12 percent ceiling at $66,000, not $88,000.

Abortion. During House debate, Republican leader John Boehner of Ohio pestered House Democratic leaders about whether the anti-abortion amendment, which is not in either version of the Senate bill, would remain in the bill after House-Senate conference. Obviously they hope it does not, but it remains to be seen whether the Senate can resist pressure from the U.S. Conference of Bishops.

The 1976 Hyde amendment already prohibits the spending of Health and Human Services funds to pay for abortions. But 17 states have gotten around that prohibition in the Medicaid program (the Hyde amendment's principal target) by paying for abortions not with federal funds but with state funds. (Medicaid is jointly funded by the federal and state governments.) Health reform advocates had hoped to achieve a similar workaround in the House bill by segregating federal funds from private funds generated through premiums in the new health insurance exchange. Many bill supporters no doubt also hoped the Hyde amendment might eventually be repealed, freeing health reform from this cumbersome requirement. But Michigan Democrat Bart Stupak blocked both paths with an amendment that states no funds made available through the bill "may be used to pay for any abortion or to cover any part of the costs of any health plan that includes coverage of abortion" except where the mother's life is endangered or the pregnancy is the result of rape or incest—the same exceptions codified in the Hyde amendment. The amendment theoretically allows private insurers to offer policies covering abortion within the exchange provided the policyholder receives no federal subsidy, but that caveat is sufficiently restrictive that no insurer is likely to bother.

Negotiated drug prices. The House rejected a bad deal that the White House and the Senate finance committee cut with Billy Tauzin, president of the Pharmaceutical Manufacturers of America. Under the deal, the drug manufacturers would not be asked to give up more than $80 billion over 10 years to pay for health care reform. In exchange they would support health reform. As part of the deal, the government would not try to eliminate a prohibition in the 2003 law creating a Medicare drug benefit preventing Medicare from negotiating what it pays for drugs. The House bill, however, eliminates this idiotic prohibition. As I've noted before, the blended Senate bill will likely honor this costly bargain.

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I don't mean to be too hard on the Senate. The Senate finance committee bill imposes necessary cost controls on Medicare that are at least theoretically tougher (assuming Congress has the stomach to stand by them). It also rescues the State Children's Health Insurance Program from oblivion, whereas the House bill eliminates it, redeploying some of its low-income beneficiaries to Medicare and some to the new health insurance exchange. Saving S-CHIP, the Congressional Budget Office found, is the cheaper option, because of efficiencies inherent to government-supplied health insurance that all parties to this debate refuse to dwell on (except perhaps Rep. Dennis Kucinich of Ohio, a single-payer advocate who voted against the House bill).

On the whole, however, most parts of health care reform that the Senate will now remove would be better left intact. Let's hope something's still left when it's done.

E-mail Timothy Noah at chatterbox@slate.com.

Timothy Noah is a former Slate staffer. His  book about income inequality is The Great Divergence.

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