The House is scheduled to consider H.R. 3692, the Pelosi health care bill, later today. The bill will be considered under a modified closed rule, making in order only selected Democrat amendments and a Republican substitute amendment. The rule provides that the manager’s amendment—as modified by the Rules Committee—shall be considered as adopted upon enactment of the resolution. An updated summary of amendments made in order follows.
Amendments Made in Order
Rep. Dingell (D-MI): The modifications to the Manager’s Amendment narrow the scope of the biofuel tax credit that only “black liquor”—a by-product of the pulp-making process—shall be excluded from eligibility for the credit. The Manager’s Amendment as originally introduced would have made additional products ineligible for the credit.
The modified Manager’s Amendment also establishes two new public health grant programs—one related to the development of medical schools in health professional shortage areas, and the other a demonstration program permitting the National Health Service Corps to offer incentive payments to members assigned to “a health professional shortage area with extreme need.”
Finally, the modified Manager’s Amendment modifies Federal Trade Commission patent enforcement authority with respect to the new restrictions on generic drug makers’ patent settlements with brand name manufacturers.
Rep. Dingell (D-MI): The 42-page Manager’s Amendment makes several technical and substantive changes to the bill. With respect to the high-risk pool program established effective in January 2010, the amendment allows individuals with employer-based retiree coverage to buy into the pool if that coverage’s premiums exceeds “such excessive percentage as the Secretary shall specify.” The amendment also extends the citizenship verification provisions required for insurance affordability credits in the bill—the same citizenship verification regime based upon that enacted in this year’s SCHIP reauthorization (P.L. 111-3). However, many may be concerned that the provisions as drafted would not require individuals to verify their identity when confirming eligibility for subsidies—encouraging identity fraud while still permitting undocumented immigrants and other ineligible individuals from obtaining taxpayer-subsidized benefits.
Insurance Price Controls: The amendment creates “a process for the annual review, beginning with 2010…of increases in premiums for health insurance coverage,” requiring carriers to submit justifications to States for any premium increases, and providing $1 billion for a five-year program of grants to States to facilitate such ends, beginning in 2010. The amendment requires States to make recommendations to the Commissioner “about whether particular health insurance issuers should be excluded from participation in the Health Insurance Exchange based on a pattern of excessive or unjustified premium increases.” Many may be concerned first that this provision would further increase the role of State and federal bureaucrats in micro-managing private insurance companies, and second would permit bureaucrats to deny all private plans access to the Exchange for the mere reason that an Administration desires to enroll all Americans in the government-run health plan. Many may further question how a government-run plan will promote “competition” if the government itself will permit which plans are able to “compete.”
Other Insurance Changes: The amendment permits the Commissioner to permit “direct primary care medical home plans” to meet the bill’s definition of a qualified plan. Some may view this provision as an authorizing earmark intended to benefit Democrat lawmakers in specific locations.
With respect to the partial repeal of insurers’ anti-trust exemption, the amendment exempts State medical malpractice laws from the bill’s impact, removes an exemption in the bill allowing insurance companies to coordinate actions with respect to “information gathering and rate setting,” and makes other technical changes. The amendment applies provisions of the Government Performance and Results Act to the bill, and requires reports every three years by executive agencies on “the quality of customer service provided.” The amendment requires the development of standards for interstate insurance compacts by January 2014, and makes other technical changes to those provisions. The amendment makes adjustments in reimbursements by the government-run health plan for States operating a cost-containment waiver for providers under provisions in the Medicare statute.
Tax Changes: The amendment delays for two years (from 2011 to 2013) provisions withdrawing the tax-free status of subsidies provided to employers providing retiree prescription drug coverage, per provisions of the Medicare Modernization Act (P.L. 108-173). The amendment repeals—rather than delaying until 2019—the application of worldwide interest allocation provisions first enacted into law (but never implemented) in 2004. The amendment also includes a new provision making adjustments to the existing second generation biofuel producer credit, designed to exclude “black liquor”—a byproduct of the pulp-making process—from eligibility for the credit.
Medicare and Medicaid Provisions: The amendment delays the application (from January 2010 to April 2010) of certain payment rules related to skilled nursing facilities, and expands the number of physician-owned specialty hospitals permitted to expand their facilities. (The bill would prohibit most physician-owned facilities from expanding.) As the bill includes a “special rule for a high Medicaid facility,” many may view these provisions as an authorizing earmark intended to protect physician-owned specialty hospitals located in Democrat Members’ districts.
The amendment allows States to (within limits) reimburse nursing facilities for the cost of conducting background checks and screening required in the bill, and requires the Secretary to develop new quality measures for the care of individuals with Alzheimer’s disease. The amendment allows the Centers for Medicare and Medicaid Services (CMS) to withhold payments for durable medical equipment for 90 days if CMS finds “a significant risk of fraudulent activity” within the program, and inserts provisions requiring disclosure of a toll-free fraud hotline number on Medicare beneficiaries’ explanation of benefits.
The amendment clarifies that all individuals under age 19 with family incomes under 150 percent qualify for Medicaid under the bill’s expansion, and adds sense of Congress language regarding States adding coverage of home- and community-based services to their long-term care programs under Medicaid.
Public Health Provisions: The amendment provides that funding provided from the new Public Health Investment Fund may be spent “only if…the amounts specified…are equal to or greater than the amounts” spent during Fiscal Year 2008. The amendment clarifies that the bill’s language regarding liability reform grants shall not pre-empt existing State laws imposing caps on damages or attorneys’ fees, and makes States with such caps eligible for grant payments—provided that the new laws enacted by States to receive incentive payments do not include such caps on attorneys’ fees or damages.
The amendment includes a new grant program for mental health and substance abuse screening in primary care settings, establishes additional Offices of Minority Health in the Centers for Disease Control, the Substance Abuse and Mental Health Services Administration, the Agency for Healthcare Research and Quality, the Health Resources and Services Administration, and the Food and Drug Administration, and imposes requirements related to diabetes screening and outreach and collection of vital statistics data. The amendment includes a study on duplicative grant programs within the Public Health Service Act, and authority for the Secretary to streamline any programs found unnecessarily duplicative—provisions which many may view as ironic, given the 111 new bureaucracies, boards, and programs established in the bill itself.
Rep. Stupak (D-MI): The Stupak amendment as modified strikes language requiring the government-run plan to pay for abortion services, and prohibits any federal funds authorized or appropriated by the bill—including those of the Indian Health Service—except in case of rape, incest, or to save the life of the mother. The amendment further provides that nothing shall prohibit “any nonfederal entity (including an individual or a State and local government) from purchasing separate supplemental coverage for abortions” for which federal funding is prohibited. Such supplemental coverage must be “paid for entirely using only funds not authorized or appropriated” by the bill, and may not be paid for by “individual premium payments required for a[n] Exchange-participating health benefits plan towards which an affordability credit is applied.” Likewise, non-federal health plan offering entities (i.e., plans in the Exchange except the government-run plan) can offer separate supplemental abortion coverage.
: The Republican substitute includes a total of $25 billion in mandatory funding for State-based high-risk pools, which provide coverage to individuals with pre-existing conditions. The substitute provides that, in order to receive risk pool grants, States must ensure all individuals verify both citizenship and identity, under a regime established in the Deficit Reduction Act (P.L. 109-171).
Insurance Reforms: The substitute eliminates a current-law requirement that individuals must exhaust their COBRA benefits (if eligible for same) before becoming eligible for guaranteed-issue individual coverage under the Health Insurance Portability and Accountability Act (HIPAA). The substitute eliminates lifetime or annual limits on insurance benefits, and prohibits insurance companies from canceling policies except in cases of demonstrated fraud, further requiring third-party external review of any insurer’s decision to rescind a policy.
The substitute provides a total $35 billion in State innovation grants for States whose insurance reforms result in lower premium costs to individuals. States would receive the maximum grant for reducing premiums by 8.5 percent over three years, 11 percent over six years, and 13.5 percent over nine years. (Smaller grant amounts would be available for States that achieve premium reductions slightly below the above levels.) The program also includes bonus grants for States that reduce their percentage of uninsured individuals by 10 percent within five years, 15 percent within seven years, and 20 percent within nine years, with smaller amounts available for States that reduce their percentage of uninsured individuals at levels below the benchmark amounts above. The substitute includes language encouraging the development of State-based health plan finders, and provisions for the administrative simplification of health insurance claim processing.
The substitute provides for the establishment of Association Health Plans, allowing small businesses to band together across state lines for the purposes of purchasing health insurance. The substitute permits dependents under age 25 to remain on their parents’ health insurance policies, and prohibits States from enacting laws prohibiting employers from auto-enrolling their employees in group insurance coverage. The substitute also permits individuals to purchase coverage across State lines.
Health Savings Accounts: The substitute makes contributions to Health Savings Accounts (HSAs) eligible for the current-law saver’s credit, permits individuals to pay for high-deductible health plan premiums with funds from the HSA account, and includes other clarifying language regarding the coordination of high-deductible health plan enrollment and the establishment of the HSA itself.
Doctor-Patient Relationship: The substitute includes medical liability reforms, imposing caps on non-economic damages of $250,000, caps on punitive damages, restrictions on attorney contingency fees, and restrictions on the liability statute of limitations and collateral source damages. The substitute includes language clarifying that “nothing in this Act shall be construed to interfere with the doctor-patient relationship or the practice of medicine,” and repeals the Federal Coordinating Council for Comparative Effectiveness Research established in the “stimulus” bill.
Wellness and Other Provisions: The substitute expands current-law incentives for prevention and wellness, extending to 50 percent from 20 percent the maximum variation in insurance premiums for individuals’ compliance with healthy behaviors and wellness initiatives. The substitute incorporates anti-fraud provisions, including full funding for the Obama Administration’s request for anti-fraud funding for activities within the Department of Health and Human Services.
Finally, the substitute includes a pathway for Food and Drug Administration approval for follow-on biologics, providing a period of patent exclusivity 12 years, with a six-month extension possible in cases where a manufacturer agrees to an FDA request for pediatric studies. The substitute gives FDA the authority to issue general or specific guidance documents (subject to a notice-and-comment period) regarding product classifications.
Pro-Life Protections: Finally, the substitute includes prohibitions on federal funding for abortions, and extends the current-law Hyde Amendment to prohibit federal subsidies being “expended for a health benefits plan that includes coverage of abortion,” except in cases of rape, incest, or to save the life of the mother. The substitute also includes conscience protections prohibiting discrimination against any “health care entity that does not provide, pay for, provide coverage of, or refer for abortions.”
: The Congressional Budget Office, in its analysis
of the Boehner substitute, found that the provisions contained therein would reduce the deficit by $68 billion over the 2010-2019 period, and by similar amounts in future years. CBO also concluded that 3 million more individuals would have access to insurance coverage than under current law. Notably, CBO concluded that on average premiums would decline for all forms of health insurance under the Boehner substitute—by about 5-8 percent in the individual market, up to 3 percent in the large group market, and by up to 10 percent in the small group market
. Many may note that President Obama promised
the American people that, “For those who have insurance now, nothing will change under the Obama plan—except that you will pay less;” the Boehner substitute meets the President’s own criteria.