Diary

Assessing next steps on health care reform requires looking at some cold hard facts

There are two big myths that are polluting our discussion of health care reform.  Without a clear eye as to these facts, fruitful debate is impossible.

1) The original ACA was passed with 60 Senate votes, and not the budget reconciliation.  The original ACA was passed with 60 votes in the Senate and not through the use of budget reconciliation in the Senate.

The Senate at that time had 60 Democrats, just enough to pass Obamacare.  However after the bill passed the Senate, Democrat Senator Ted Kennedy died.  In his place, Massachusetts elected Republican Scott Brown.  That meant that if the House made any changes to the bill the Senate wouldn’t have the necessary number of votes to pass the amended bill (because they knew no Republicans would vote for Obamacare).  So Senate Leader Harry Reid cut a deal with Pelosi: the House would pass the Senate bill without any changes if the Senate agreed to pass a separate bill by the House that made changes to the Senate version of Obamacare.  This second bill was called the Reconciliation Act of 2010. So the House passed PPACA, the Senate bill, as well as their Reconciliation Act. At this point PPACA was ready for the President to sign, but the Senate still needed to pass the Reconciliation Act from the House.

Brian Sussman

The Senate.gov website shows that HR 3590 passed by a 60-39 vote on December 24, 2009.  It also shows that on December 23, 2009, a Cloture Motion passed on the same 60-39 vote margin.

Mr. Sussman’s description above it accurate.  The reconciliation process was used to induce the House to pass the Senate bill without changes, but the reconciliation process was not used on HR 3590 (aka Obamacare)

2) The repeal bill passed in 2015 and vetoed by Obama in 2016 was not a full repeal of Obamacare.

The “repeal” of Obamacare that passed the House and Senate in December 2015 was significant, but it was not the “full repeal” that most people thought it was.  If the news sounded to good to be true at the time, it is because it was. The Senate bill passing a “repeal” of Obamacare was passed on December 3, 2015.

By voting to nullify Obamacare — the signature domestic accomplishment of the Obama administration — GOP congressional leaders fulfilled a longtime pledge to voters and rank-and-file members to get a repeal to President Barack Obama’s desk, even though he will veto it.
Republican leaders also want to send an unmistakable message to voters: If you elect a GOP president next year and keep the them in charge of Congress, Obamacare will go.

The problem is that the December 3, 2015 Senate bill did NOT repeal all of Obamacare.  To read what was actually passed by the Senate and vetoed by President Obama, you need to look at H.R. 3762

TITLE I–HEALTH, EDUCATION, LABOR, AND PENSIONS

(Sec. 101) This bill amends the Patient Protection and Affordable Care Act (PPACA) to terminate the Prevention and Public Health Fund, which provides for investment in prevention and public health programs to improve health and restrain the rate of growth in health care costs. Unobligated funds are rescinded.

(Sec. 102) Funding for community health centers is increased.

(Sec. 103) Certain funding for U.S. territories that establish health insurance exchanges is no longer available after 2017.

(Sec. 104) The Department of Health and Human Services (HHS) may not collect fees or make payments under the transitional reinsurance program.

(Sec. 105) This bill makes appropriations for FY2016 and FY2017 for HHS to award grants to states to address substance abuse or to respond to urgent mental health needs.

TITLE II–FINANCE

(Sec. 201) This bill amends the Internal Revenue Code to require individuals to pay back the full amount of advance payments in excess of their premium assistance tax credit. (Currently, there is a limit on the amount of excess an individual must pay back.)

(Sec. 202) Provisions relating to the premium assistance tax credit, reduced cost-sharing, and eligibility determinations for these subsidies are repealed on December 31, 2017.

(Sec. 203) The small employer health insurance tax credit does not apply after 2017. (This credit is for certain employers who make contributions toward employee health coverage purchased through a health insurance exchange.)

(Sec. 204) The penalty for individuals who do not maintain minimum essential health care coverage is eliminated.

(Sec. 205) Large employers are no longer required to make shared responsibility payments.

(Sec. 206) For one year, this bill restricts the availability of federal funding to a state for payments to an entity (e.g., Planned Parenthood Federation of America) that:

  • is a 501(c)(3) tax-exempt organization;
  • is an essential community provider primarily engaged in family planning services and reproductive health;
  • provides for abortions other than abortions in cases of rape or incest, or where a physical condition endangers a woman’s life unless an abortion is performed; and
  • received a total of more than $350 million under Medicaid in FY2014, including payments to affiliates, subsidiaries, successors, or clinics.

(Sec. 207) This bill amends part A (General Provisions) of title XI of the Social Security Act (SSAct) to require the additional payments to U.S. territories for Medicaid under the Health Care and Education Reconciliation Act of 2010 to be made by the end of FY2017 instead of the end of FY2019.

This bill amends title XIX (Medicaid) of the SSAct to end the expansion of Medicaid under PPACA on December 31, 2017.

After 2017, hospitals may no longer elect to provide Medicaid services to individuals during a presumptive eligibility period.

States must maintain Medicaid eligibility standards for individuals under 19 years old through FY2017 instead of through FY2019.

The federal medical assistance percentage (FMAP, the federal matching rate for Medicaid expenditures) for U.S. territories is 50% after 2017 (currently, the FMAP is 55%).

The increased FMAP for childless adults and home and community-based attendant services under PPACA ends December 31, 2017.

After 2017, states may no longer elect to provide certain individuals with a presumptive eligibility period for Medicaid.

Medicaid benchmark plans are no longer required to provide minimum essential health benefits after 2017.

After 2017, states are no longer required to operate a website for Medicaid enrollment that is linked to the state’s health benefit exchange and Children’s Health Insurance program (CHIP).

(Sec. 208) Medicaid allotments for disproportionate share hospitals are increased.

(Sec. 209) The excise tax on high cost employer-sponsored health coverage (popularly known as the “Cadillac tax”) does not apply after 2017.

(Sec. 210) Health savings accounts (HSAs), Archer medical savings accounts (MSAs), health flexible spending arrangements (HFSAs), and health reimbursement arrangements may be used to pay for over-the-counter medications.

(Sec. 211) This bill lowers the tax on distributions from HSAs and Archer MSAs that are not used for medical expenses.

(Sec. 212) Salary reduction contributions to an HFSA under a cafeteria plan are no longer limited.

(Sec. 213) The annual fee on manufacturers and importers of brand name prescription drugs is eliminated.

(Sec. 214) The excise tax on medical devices is eliminated.

(Sec. 215) The annual fee on health insurers is eliminated.

(Sec. 216) Medical costs are allowed as a tax deduction regardless of whether the costs are taken into account when determining the amount of the subsidy for an employer-sponsored retiree prescription drug plan under Medicare part D (Voluntary Prescription Drug Benefit Program).

(Sec. 217) A tax deduction is allowed for medical expenses in excess of 7.5% (currently, 10%) of adjusted gross income.

(Sec. 218) The additional Medicare tax on income above a certain threshold is eliminated.

(Sec. 219) The indoor tanning services tax is eliminated.

(Sec. 220) The net investment income tax is eliminated.

(Sec. 221) A health insurer is allowed a tax deduction for the full amount of an employee’s compensation. (Currently, there is a limit on the amount of an employee’s compensation that a health insurer may deduct.)

(Sec. 222) Provisions relating to the economic substance doctrine are repealed. (The economic substance doctrine treats a transaction as having economic substance if it has a purpose other than reducing income taxes. Currently, there are penalties for claiming tax benefits for transactions without economic substance.)

(Sec. 223) Funds are transferred from the Department of the Treasury to the Federal Hospital Insurance Trust Fund.

GOING FORWARD: A fruitful debate on healthcare reform needs to be grounded in reality, which is just another way of saying facts.

It is not productive to call Paul’s plan Obamacare Plus.  See also this article published by Forbes.

It is not productive to call the HHS Sec/House plan Obamacare Lite.

We are going to need to pass something in the range of these plans, and exaggerated language will make compromise impossible.  If that happens, we will have what I call “Obamacare Obamacare”.