• Excise tax on insurers gains steam at White House
• Obama pushes to limit deductions for wealthy, create independent Medicare advisory committee
• Amendment to health reform bill would allow states to implement single-payer options
• White House, Congress, CBO push health reform information
• Tri-Committee tax proposal to fund health care reform would affect top 1.2%

• State legislators urge Congress to avoid unfunded health care mandates

• Polls show softening of support for current reform effort
• Not all physicians endorse health care reform bill
• Lewin Group launches center for comparative effectiveness research

Excise tax on insurers gains steam at White House

To help pay for an estimated $1 trillion health care reform bill, the White House is leaning closer toward supporting a proposal by Sen. John Kerry, D-Mass., to impose a surtax on insurance companies that provide high-end health care plans. White House Press Secretary Robert Gibbs, at a press briefing on July 27, said the White House is evaluating the insurance tax option that is under consideration by the Senate Finance Committee as they craft legislation for a mark-up before the August recess.

Gibbs emphasized that the administration and Congress have reached agreement on 80 percent of reform issues and acknowledged the remaining 20 percent “won’t be easy.” Areas of consensus are greater access to affordable health care coverage, a deficit-neutral health care reform plan over ten years and an end to insurance companies denying coverage due to pre-existing medical conditions, Gibbs notes.

President Obama maintains final legislation will reach his desk in the fall. Gibbs said there are “no intermediate deadlines” for getting the bill through Congress although Obama initially called on the House and Senate to pass health care reform bills before they started their August recess. “The President is encouraged that we're making progress and I think is satisfied with the path we're on,” Gibbs said.

Obama pushes to limit deductions for wealthy, create independent Medicare advisory committee

At a July 22 press conference devoted primarily to health care reform, President Barack Obama said that his preferred method of raising revenue would be to “limit the deductions, the itemized deductions, for the wealthiest Americans.”

Mr. Obama’s proposal has been described as affecting those with incomes of $280,000 or more. The National Federation of Independent Business estimates that one-third of small business owners with 20 to 250 employees make more than $280,000. Taxable income at small and medium-size manufacturers averages $570,000, according to the National Association of Manufacturers.

Mr. Obama also noted that “the House [has] suggested a surcharge on wealthy Americans…that basically only appl[ies] to families whose joint income is a million dollars. To me, that meets my principle that it’s not being shouldered by families who are already having a tough time.”

The million-dollar proposal has not yet been adopted by the House in its health reform bill H.R. 3200. The current version of H.R. 3200 would tax families with incomes of $500,000 or more. The Senate Finance Committee is considering a proposal to change the employee tax exclusion for employer-provided health care.

Amendment to health reform bill would allow states to implement single-payer options

Individual states would be able to implement single-payer health care programs under an amendment to the federal Affordable Health Choices Act (H.R. 3200), offered by Rep. Dennis Kucinich (D-Ohio) and approved by the House Education and Labor Committee by a vote of 27-19. The amendment would provide for a waiver of ERISA Sec. 514 to remove its preemption provisions for states that request it. ERISA Sec. 514(a) provides that ERISA will supersede any state law that "relates to" an employee benefit plan.

It is unlikely that the amendment will remain in future versions of H.R. 3200, however, as the health insurance industry, major self-insured employers, and other opponents of a single-payer option will oppose it.

White House, Congress, CBO push health reform information

As lawmakers in Washington head toward their summer recess, the White House and Congressional Democrats have stepped up efforts to provide legislators and the public with information intended to “make the case” for health care reform.

In his weekly radio address, President Barack Obama cited a new report from the White House Council of Economic Advisers on the impact of reform on small businesses.

The report states that “Health care reform will improve both the health and the economic well-being of small business employees through the expansions in health insurance coverage and reductions in health care costs.”

Small businesses. According to the report, small businesses pay up to 18% more than large firms for the same health insurance policy. In addition, 49% of firms with 3 to 9 workers and 78% of firms with 10 to 24 workers offered health insurance to their employees in 2008, compared with 99% of firms with 200 or more employees in the same year. The fraction of small firms offering health insurance to their employees has also been declining in recent years. From 2002 to 2008, the fraction of firms with 3 to 9 workers offering health insurance declined from 58%to 49%.

The report is available at http://www.whitehouse.gov/assets/documents/CEA-smallbusiness-july24.pdf.

Effect on congressional districts. On July 24. the House Energy and Commerce Committee released to each representative a district-level analysis of the impact of the legislation proposed in the House but not yet approved by the Energy and Commerce. Some “Blue Dog” Democrats on the Energy and Commerce Committee have been pushing for additional cost control measure in health.

The reports provide estimates for each Congressional District on the number of employers and individuals would gain from reform. For example, the report for the district of Rep. Charlie Melancon (La.), one of the Blue Dog Democrats, estimates that “up to 11,000 small businesses could receive tax credits to provide coverage to their employees; 3,000 seniors would avoid the donut hole in Medicare Part D; 350 families could escape bankruptcy each year due to unaffordable health care costs; health care providers would receive payment for $146 million in uncompensated care each year; and 115,000 uninsured individuals would gain access to high-quality, affordable health insurance.”

All the reports are available at http://energycommerce.house.gov/.

Additional information from CBO. In a July 26 letter to Rep. Dave Camp (Miss.), Douglas W. Elmendorf, Director of the Congressional Budget Office (CBO), provided “additional information about the effects of the specifications regarding health insurance coverage.” Earlier, Mr. Elmendorf had expressed doubts about the cost control potential of proposed reform legislation.

The CBO letter states that, in 2016, “about 9 million people who would otherwise have had employer coverage would not be enrolled in an employment-based plan under the Proposal [H.R. 3200, America’s Affordable Health Choices Act].” The CBO goes on to note that the net effect of H.R. 3200 on employment-based health insurance reflects larger changes in the other direction: “We estimate that about 12 million people who would not be enrolled in an employment-based plan under current law would be covered by one in 2016, largely because the mandate for individuals to be insured would increase workers’ demand for insurance coverage through their employer. On net, therefore, about 3 million more people would have their primary coverage through an employer under the proposal than under current law.”

The CBO report is available at http://www.cbo.gov/

Tri-Committee tax proposal to fund health care reform would affect top 1.2%

The latest health care reform proposal put forth by the House Tri-Committee to finance reform by imposing a surcharge on wealthy individuals would affect only the highest income 1.2% of U.S. taxpayers, according to an analysis by the Center on Budget and Policy Priorities.

“The House surcharge proposal is reasonable and well-targeted,” the Center noted. “In recent decades, incomes have grown disproportionately for households at the top of the income scale, while their tax burden has fallen substantially. Moreover, despite charges to the contrary, the proposal would have only a small impact on small businesses. The congressional Joint Tax Committee estimates that it would have no impact at all on 96% of small business owners—broadly defined as any taxpayer with as little as $1 of business income—and that only half of the 4% of small business owners who would be affected derive more than a third of their income from a business. At the same time, the House plan would enhance the ability of small businesses to offer affordable, quality health insurance to their employees.”

The Center for Budget and Policy Analysis report, House Health Bill’s High-Income Surcharge: A Reasonable Approach, is at http://www.cbpp.org/cms/index.cfm?fa=view&id=2874.

State legislators urge Congress to avoid unfunded health care mandates

On July 23, 2009, the National Conference of State Legislatures (NCSL) enacted a policy on federal health reform that will guide lobbying efforts on Capitol Hill. The policy, which urges Congress and the Obama Administration to build on state reform efforts, supports:

• preservation of state regulation of insurance;
• protection for "legacy states" that already have enacted health reform; and
• a public option for individuals for whom private insurance is not a choice.

However, reflecting state legislators' concern about the potential financial impact of federal reform, the policy rejects unfunded mandates that would shift costs to states, as well as an expansion of mandatory benefits unless it is fully funded by the federal government. A trigger mechanism, which would guarantee enhanced federal Medicaid funding when economic indicators decline, is also specified.

Several of the major federal health care reform proposals would increase the number of people eligible for Medicaid and expand the types of services states would have to provide. States want to make sure they don't get stuck with the tab for these additional expenses.

"We support covering all Americans, but we want to ensure that a state-federal partnership includes respect for state law, avoiding costs shifts and unfunded mandates," said NCSL President Joe Hackney.

Source: National Conference of State Legislatures, http://www.ncsl.org.

Polls show softening of support for current reform effort

Recent health care polls indicate continued but lessening support for the health reform legislative efforts currently being considered.

According to the July Kaiser Health Tracking Poll, a majority of the American people (56%) continue to believe that health reform is more important than ever despite the country’s economic problems, and the public believes by a two-to-one margin (51% versus 23%) that the country will be better rather than worse off if Congress and the President enact health reform. However, a larger share of the public is worried that Congress and the President will pass a bill that is bad for their family (54%) than are worried that health care reform will not happen this year (39%). While a majority of the public favors health care reform now, the share that is supportive is down five percentage points since June (from 61% to 56%) http://www.kff.org/kaiserpolls/pomr072309nr.cfm).

Since April, approval of Mr. Obama’s handling of health care has dropped from 57%to 49%, with disapproval rising from 29%to 44%, according to the most recent Washington Post-ABC News Poll (http://www.washingtonpost.com/wp-srv/politics/polls/postpoll_072009.html).

The most recent Zogby International poll suggests an almost even split among those who agree and disagree that a public plan option “is needed to keep insurance companies honest” (http://www.zogby.com/news/wf-healthcarereform.pdf).

Not all physicians endorse health care reform bill

On July 16, the American Medical Association (AMA) sent a letter to House leaders endorsing H.R. 3200, America’s Affordable Health Choices Act. However, according to Sermo, an online community of physicians, the AMA’s endorsement does not reflect the position of all practicing physicians. In fact, according to a recent survey of 4,156 physicians conducted by Sermo, 89% of doctors claim that “the AMA does not speak for me.”

A document entitled An Open Letter from America’s Physicians, available at http://www.doctorsunite.org, details the physician community’s concerns with the health care system and how these concerns affect physicians’ ability to provide quality care for their patients. The letter has been signed by more than 13,000 U.S. physicians to date.

For more information, visit http://www.sermo.com.

Lewin Group launches center for comparative effectiveness research

On July 16, the Lewin Group, a health care policy and management consulting firm, announced that it has launched The Lewin Group Center for Comparative Effectiveness Research (CER) for health care treatments. CER compares the safety, effectiveness, cost, and other clinical and economic outcomes of health care interventions used to prevent, diagnose, or treat diseases, disorders, and other health conditions. Major national health care reform proposals now pending in Congress, including President Barak Obama’s initiative, include CER provisions. In fact, Lewin currently is providing analytical support to the Federal Coordinating Council for Comparative Effectiveness Research in the council’s development of a strategic framework for CER, and is identifying existing CER projects as well as gaps and potential priorities for future CER investment.

The Lewin Group Center for Comparative Effectiveness Research will offer the following capabilities:

• development and management of data sets and registries;
• data analysis, including linked data sets and electronic health records;
• tools for analysis of longitudinal health outcomes for treatment effectiveness and drug safety;
• services to conduct and manage institutional review board-approved comparative trials; and
• CER technical assistance, CER knowledge transfer, and consulting on CER methods and policies.

For more information, visit http://www.lewin.com/CER.