NAHU State and Local Legislative Chair Washington Report

President-Elect Obama’s Administration

Key Cabinet Appointments:
Rham Emanuel (D-IL), Chief of Staff
Tom Daschle (D-SD), Health and Human Services Secretary
Peter Orzag, CBO Director

Still Vacant Key Positions and Possible Choices:
CMS Administrator- David Cutler, Harvard Economist; Pearson, AHIP and Harvard
Secretary of Labor- David Bonior, Former Representative; Dick Gephardt, Former Representative; Andrew Stern, President of the Service Employees Union International
Health Policy Advisor- Dr. Dora Hughes; Chris Jennings

Key Health Care Proposals to be considered by the 111th Congress:
Senator Wyden’s Healthy Americans Act

• Senator Wyden’s bill, which would eliminate the employer exclusion, may have lost some steam due to President-Elect Obama’s strong opposition to that financing mechanism articulated on the campaign trail.
• However, a group of Senators recently signed letter to president-elect Obama advocating for the measure. Along with Wyden, the letter was signed by Sens. Lamar Alexander, R-Tenn.; Bob Bennett, RUtah; Maria Cantwell, D-Wash.; Tom Carper, D-Del.;Norm Coleman, R-Minn.; Bob Corker, RTenn.; Mike Crapo, R-Idaho, Judd Gregg, R-N.H.; Daniel K. Inouye, D-Hawaii; Mary L.Landrieu, D-La.; Joseph I. Liebermann, I-Conn.; Bill Nelson, D-Fla.; Arlen Specter, R-Pa. and Debbie Stabenow, D-Mich.
• Includes an individual and employer mandate
  
• All Americans would have to purchase coverage through regional purchasing pools and purchasing pools would contain individual policies that would be guarantee issue and rated on a community or modified community basis.
  
• Government run “health help agencies” would be placed in charge of enrollment, purchasing and claims assistance.
  
• Plan would offer subsidies on a sliding scale for people, up to 400% of the federal poverty level, and would eliminate Medicaid and SCHIP, covering beneficiaries through regional pools.
• Includes a mandatory employer contribution, which is based on a complicated formula, taking into account the number of employees.
  
• Senator Wyden’s bill does have bipartisan support and co-sponsors. Some conservative republicans like that it replaces public programs with “private coverage” and its focus on individual policies rather than employer sponsored.
  
• The elimination of Medicaid and SCHIP, and the required employer contribution, led to the Congressional Budget Office stating that the bill could amount to being budget neutral for the US Treasury.

Senator Kennedy’s Health Reform Proposal

• The Senator and his staff are determined to see health care reform advance through Congress during the time the Senator has left.
• A group of strange bedfellows- consumer groups, insurers, business groups and others including NAHU, have been brought together to hammer our a new health care reform package. Leaders of these organizations are meeting regularly with the Senator’s staff in an attempt to negotiate consensus around the reform.
• Basis for the Kennedy reform will likely center on the 2006 Massachusetts reforms, which included both an individual mandate, an employer mandate and the creation of an exchange.
• On November 18th Senator Kennedy’s office announced the creation of three working groups within his Committee, 1) led by Senator Harkin (D-IA) on prevention and public health; 2) led by Senator Mikulski (D-MD) on improving the quality of care; and 3) led by Senator Clinton (D-NY) on insurance coverage. Still unclear which Senator would lead the third working group if Senator Clinton were to be nominated as Secretary of State in President-elect Obama’s administration.

Senator Baucus’ White Paper

• The very detailed paper advocates for an individual mandate, an employer mandate, subsidies through tax credits to both individuals with incomes up to 400% of the Federal Poverty Level (nearly $85,000 income for family of four) and small businesses, and discusses capping the employer exclusion from both income and payroll taxes based on benefit packages or income or both.
• It calls for a national health insurance exchange to offer both private coverage and a public Medicare-expansion product on a guarantee issue basis with no consideration of preexisting conditions; extension of Section 125 plans, Medicaid and SCHIP eligibility expansions; a Medicare buy-in option for early retirees, and a provision to the formula for Medicare Advantage plan payments.
• While NAHU certainly has concerns about a number of these ideas, the paper also focuses a great deal of attention on medical care cost containment, which NAHU believes is key to any responsible reform proposal.
• Cost containment ideas in the paper include wellness tax incentives, Health IT improvements, investment in comparative effectiveness research, increased transparency, disease management and medical liability reform

AHIP and BCBSA Endorse Individual Mandate w/ Guaranteed Issue Coverage

• AHIP and BCBSA both released statements the week of November 17th in support of an individual health insurance coverage mandate if coverage is also provided to individuals on a guaranteed-issue basis without regard to preexisting medical conditions.
  
• AHIP’s proposal expands on its existing guaranteed-access plan, released last year, which encourages states to guarantee-issue coverage in combination with a broadly funded pool to cover uninsurable risks.
• In 2006 NAHU’s Board of Trustees and Legislative Council approved a white paper on the issue of individual mandates, in which we state that we need to approach the idea of an individual mandate with caution. While the concept of an individual mandate does attempt to creatively address the problem of the uninsured, NAHU feels this solution raises practical and philosophical concerns, such as viable enforcement, cost, and possible greater government intrusion into the private health insurance market.
• NAHU also has a current internal working group on individual market reforms and is working actively to release our blueprint to address the needs of consumers purchasing individual insurance in the near-term future. NAHU will continue to work with AHIP, BCBSA, Members of Congress, state legislators, the administration, and others to find sensible solutions to the uninsured crisis.