DURHAM — By this weekend, a compromise that has the support of 60 U.S. senators will emerge or reform will likely be dead. Here are updates on several questions I posed just after the Senate Finance Committee passed the Baucus bill in October:
Will Republicans now see reform as inevitable and seek to constructively amend the bill instead of simply opposing? No. It has been all block, all the time. Once the merged Senate bill lost the support of Maine Republican Olympia Snowe - who voted for the Baucus bill - the focus has been on the 58 Democrats and two independents needed to override a Republican filibuster. Ongoing negotiations have highlighted the ideological diversity within the Democratic caucus.
Will the Senate's tax on high-cost insurance plans prevail over the House income tax increase? The tax on high-cost health insurance plans remains in the Senate bill, though it is applied to fewer policies than in the Baucus bill. Currently, the total family premium cost above $24,000 ($8,500 for individuals) will be subject to a 40 percent tax, affecting roughly the top fifth of all private policies. This is a de facto capping of the tax exclusion of employer-paid premiums, the aspect of the bill with the most promise for slowing cost inflation.
This tax increase has been ripped by Republicans. However, several Republican senators have co-sponsored bills that would totally repeal the tax exclusion, resulting in a far larger tax increase if you consistently apply the logic they have used in criticizing the Senate bill. Included in this number is North Carolina's Richard Burr, whose Patients' Choice Act would repeal the tax exclusion and provide tax credits for persons to purchase private insurance in exchanges. Criticizing the tax on high-cost insurance plans while proposing a repeal of the tax exclusion is disingenuous.
Will some type of public insurance option pass? No. The most surprising aspect of this debate has been the resurrection of the public option after it seemed dead. When the history is written, will the two-month discussion of a weak public option prove to have been a mistake that served only to lose Sen. Snowe? Or was this the only way to get the liberals in the Senate so invested that they were unable to walk away once the public option was dropped?
How much discretion will be granted to states? This question was largely related to the public option (opt in, opt out). However, the role of states in setting up and regulating health insurance exchanges could be a sticking point if there is a full House/Senate conference.
Will a Medicare Commission survive? The Senate bill has an Independent Medicare Commission while the House bill does not. However, the commission has been watered down to exclude hospitals (the most expensive part of the system) until 2020. More importantly, the Senate bill bars the commission from submitting proposals to Congress after 2019 if Medicare's five-year spending growth rate is lower than that in the overall system; it has almost always been slightly lower the past 30 years. Sens. Jay Rockefeller, Sheldon Whitehouse and Joe Lieberman are pushing an amendment to end these limitations.
The lack of bipartisan cooperation has most hurt the potential of the bill to slow cost inflation. For example, Republican senators who have proposed repealing the tax exclusion of employer-provided insurance understand that the current unlimited subsidy helps fuel health care inflation. If they had joined in the discussion with a goal of improving the legislation, perhaps the tax on insurance companies could have been replaced with a more straightforward capping of the tax exclusion.
Either could work to slow cost inflation, but a cap of the exclusion would serve to place more focus on the role of the end user of care - the patient - in driving inflation. It is hard to slow the inflation rate because doing so necessarily means patients receive less costly care than they are set to receive with no change. Doing so comprehensively would almost certainly require Democrats and Republicans to work together.
Donald H. Taylor Jr. is an assistant professor of public policy at Duke who blogs at www.donald htaylorjr.blogspot.com. This is one in a series of columns on health reform.