CHN: Senate Finance Committee Completes Mark-Up of Health Care Bill; Final Vote Still Pending

After debating and weighing over one hundred amendments for a little over a week, the Senate Finance Committee finished marking-up Chairman Max Baucus’ (D-MT) health care reform proposal early Friday. (For a summary of the proposal see Human Needs Report for September 23). Next is the final vote in Committee on the proposal, which Senator Baucus hopes will take place next week after the Congressional Budget Office has had a chance to score the revised proposal.
Some significant improvements to the mark were won through the amendment process, including a few child-friendly changes. Thanks to an amendment that was offered by Senator Debbie Stabenow (D-MI), which the Committee adopted, the mark would ensure that children in foster care would have access to crucial therapeutic services. Senator Stabenow’s amendment provides a statutory definition for Therapeutic Foster Care (TFC) and protects Medicaid reimbursement for the treatment contained in such programs. TFC provides intensive, individualized services in a community-based environment for children with severe mental and behavioral health needs.  Another amendment that was approved, offered by Senator Robert Menendez (D-NJ), would require all plans in the Exchange to provide behavioral health treatment as part of the mental health and substance abuse services. Senator Menendez also sponsored an amendment that would create a child-only health insurance plan and subsidies in the Exchange and that would allow children to qualify as individual applicants in the Exchange. Advocates who worried that children in mixed-status households might see their coverage and subsidies limited or denied because of the immigration status of other members of their household were relieved when the Committee adopted Senator Menendez’s amendment. Another child-friendly amendment that was approved and is worth noting is one that Senator John Rockefeller (D-WV) offered to keep the Children’s Health Insurance Program (CHIP) in place until December 31, 2019. Senator Baucus’ proposal would have moved CHIP beneficiaries into the exchange in 2013, when the program is set to expire. Advocates worried that children might not receive the same standard of benefits in the Exchange as they currently do in CHIP.

An amendment offered by Senator Jeff Bingaman (D-NM), which would streamline the process for applying for CHIP, Medicaid and tax subsidies, was also approved. This will help ensure that qualified individuals are able to get enrolled in public coverage or receive the tax credits for which they are eligible. Currently, two-thirds of uninsured children are eligible for but not enrolled in CHIP or Medicaid.

One of the bigger criticisms waged against Senator Baucus’ proposal when it was introduced was that it did not do enough to make health care affordable and accessible for low- and moderate-income people and at the same time it imposed hefty penalties on people who did not obtain coverage. In Baucus’ original proposal individuals would be required to have qualifying health coverage, otherwise they could face an annual tax penalty of $750 ($1,500 for families) for those with incomes between 100-300 percent of the federal poverty line (FPL) or $950 ($3,800 for families) if their incomes are above 300 percent of FPL. The original proposal also stipulated that hardship exemptions would be granted to individuals if the cost of the lowest plan option in the Exchange exceeded 10 percent of their income. Senators Olympia Snowe (R-ME) and Charles Schumer (D-NY) offered an amendment, which was adopted, to lower the hardship exemption to 8 percent of an individual’s income and to phase in the penalty for attaining coverage over five years. According to the amendment there would be no penalty in the first year, 2013, and the penalty would increase gradually to $750 for an individual and $1,500 for a family by 2017.

The Committee also voted down a few amendments which would have jeopardized the application process for public health programs and tax subsidies and imposed unfair restrictions on lawfully residing immigrants for receiving health insurance subsidies. Senator Kyl attempted to impose a five year waiting period before lawfully present immigrants would be eligible for subsidies. Another of Senator Kyl’s amendments which was defeated would have required people to show government-issued photo identification when applying for a health insurance subsidy. Similarly, Senator Grassley proposed an amendment that was not adopted that would have required Medicaid and CHIP recipients, or the legal guardians of child recipients to show photo identification when applying for these programs. These latter two amendments would have created new barriers for everyone applying for subsidies, CHIP and Medicaid.

Regrettably, there was a further setback with the “free rider” employer mandate provision, which would require employers with more than 50 employees to pay a fee if they have low- and moderate-income employees who receive federal subsidies. Now, due to an amendment, the provision was made even harsher – the penalties employers would have to pay would be non-deductible, creating greater fiscal disincentives for employers to hire low-income workers who need subsidies.

One major change that was not adopted, which has been a contentious issue throughout the health care reform debate, was the creation of a new government-run insurance plan to compete with private insurers in the Exchange. Senator Maria Cantwell’s (D-WA) amendment to create voluntary, state-run plans for people with incomes between 133 and 200 percent of FPL instead of providing them with tax credits to purchase coverage in the Exchange is the closest the Committee came to approving anything along the lines of a public option. The Senate Finance Committee language is the only proposal from the five congressional committees with jurisdiction that does not include a public option.

Once the Finance Committee takes a final vote, Senate Leadership will work to merge the Health, Education, Labor and Pensions and Finance Committee bills together. Senate Leadership has indicated that they would like to have a package on the Senate floor right after Columbus Day. The House may not have a bill on the floor until mid-October or later.

Budget Report 2012 - Self-Inflicted Wounds