Ten more things about the official Kennedy-Dodd health care bill

Ten more things about the official Kennedy-Dodd health care bill

The Senate HELP Committee staff has filed an official copy of their draft legislation with the Senate clerk. A friend and I were discussing today two possible tactical scenarios:

  1. The weekend leak forced the majority staff to release their official text as damage control. Under this scenario, filing the official copy is a damage mitigation strategy: “If there’s going to be a version out there, let’s at least have it be a version we want.”
  2. The weekend leak was by the majority staff, and filing the official text is part of a gradual rollout strategy.

I’m guessing scenario 1 is right. Either way, we now have official text to chew on. This text is more expansive than the leaked version I posted Monday. It contains some new items, but is largely identical to the leaked draft.

More importantly, I have now had more time to read the 615 page bill. (I skimmed some parts.) Doing so turned up some things I missed the first time. So here are ten more things you should know about the official draft of the Kennedy-Dodd health care bill.

(Editorial note: I have made a page that will always have the latest version of this complete list, along with the comparison to the House Democrats’ bill. I will also post when I update that page.)

  1. The employer mandate section from the leaked draft has been replaced with [Policy under discussion].

    A few inside friends confirmed my guess – they think this is a tactical move by the majority staff to try to relieve blowback from the employer groups: Chamber of Commerce, Business Roundtable, NFIB (the small business lobby), etc. Until it is otherwise demonstrated, I will continue to assume that the Chairman’s mark will include language that will roughly parallel that in the leaked draft.
  2. The bill gives the Secretary of Health and Human Services authority to limit premiums and profits of health plans by forcing plans to rebate to enrollees premiums above a certain margin.
    Specifically,  section 2704(a) is the “Requirement to provide value for premium payments.” A health plan must report how much of their premium revenues are used for clinical services, how much for “activities that improve health care quality,” and how much for “all other non-claims costs.”Section 2704(b)(1) then tells the Secretary to look at how much other health plans spent on “all other non-claims costs,” and based on that survey, set an allowable percentage for this category. Plans are then required to rebate premiums if they go above this amount. This is direct (but confusing) regulation of premiums and profit margins.I found the labeling of this section interesting. It appears that this section will be the justification for the claim that this bill reduces health care costs. Loosely phrased, it appears their argument will be “We’re reducing health care costs by forcing plans to lower their administrative costs and profits.”
  3. The bill mandates that health plans include and provide financial incentives for the “medical home model” for services, then gives a highly prescriptive description of this model, detailing the interactions among the health plan and different types of providers.

    Section 3101(m) requires qualified health plans to develop and adopt a strategy “that provides increased reimbursement or other incentives for … improving health outcomes … including through the use of the medical home model defined in section 212 [of the] Affordable Health Choices Act, for treatment or services under the plan or coverage;”Section 212 then sets up the “medical home model” over seven pages of legislative text. I am far from an expert in plan-provider relationships, and am not familiar with the medical home model. But the language looks highly prescriptive, as if it is defining an extensive set of rules about the interactions among plans and different types of providers. I would love help from some commenters on what’s going on here, or some more education about the “medical home model.” My instinct is that, even if it is a good delivery model, the federal government should not be tilting the playing field for or against it.
  4. The bill requires health plans adopt Medicare and SCHIP�s �generally implemented incentive policy to promote high quality health care.
  5. Employers must offer the same health insurance to all employees, independent of salary.
  6. Gateways can charge a tax of up to 3% of premiums to cover implementation and administrative costs.This is a huge deal. Take a typical $13,000 (employer-based) family health insurance policy. That means the State can add up to $390/year to the cost.
  7. The Secretary of Health and Human Services shall required that Gateways shall “ensure that [uninsured] individuals are directed to enroll in the program [that she deems] most appropriate.” This is in the context of whether they should enroll in a private health plan, or a government plan: Medicaid, SCHIP, or the new “public option.” The bill gives SecHHS authority to push/force State Gateways to push/encourage/force? the uninsured toward (or away from) particular types of plans. The danger is that a SecHHS could say, “It’s best to have all the uninsured in a government plan.”
  8. States (through Gateways) shall redistribute premiums from plans with low-risk individuals to those with high-risk individuals.

    This gives the people running Gateways a tremendous amount of power over health plans.
  9. States can opt out their state and local employee plans for the first four years. I’m trying to think of a reason why they should be treated differently. Otherwise, it looks like caving to pressure either from State governments, or from public employee unions.
  10. The bill creates a new $10 B “Reinsurance for Retirees” fund to subsidize costs for those between ages 55 and 64. The bill defines eligible “employers” to include “a voluntary employee benefit association.” This may include the UAW VEBA.

    This looks like a fallback. Traditionally, health advocates on the Left have wanted to allow near-retirees (55-64) to “buy in early” to Medicare. And I need to be clear – I cannot conclude that this provision was written specifically to benefit the UAW VEBA. I just know that it allows a VEBA to apply as an employer for a share of this fund, and that the UAW VEBA is the most prominent one that might ask for such funds.

Remember, you can now always find an updated version of the complete list here.

While the list of two dozen items surely creates an impression of why I oppose this bill, I would like to put some structure on it. I hope to post in the next few days a higher-level view that crystallizes my biggest concerns with this bill in a structure that is easier to understand.

(photo credit: Wikipedia)

A messy end to a bad farm bill

Now let’s look at last week’s farm bill procedural snafu.

Last Wednesday we thought the farm bill veto would be straightforward:

  • Congress passes the farm bill conference report and sends it to the President. There are several steps in this process.
    • The bill is passed by both Houses. That’s the “engrossed bill.”
    • This engrossed bill is then “enrolled.” This means the House (or Senate) Clerk assembles the actual parchment copy, which is then signed by the Speaker of the House (Pelosi) and the President Pro Tempore of the Senate (Byrd).
  • The enrolled bill is then sent to the President by the House (or Senate) clerk. The technical term is the bill is “presented” to the President. (“Presented” is in Article I, Section 7 of the Constitution.)
  • The President then vetoes it by returning it to the Congress with his objections, and specifically, to the House that sent it to him (in this case, the House of Representatives).
  • Both Houses then vote on whether to override the veto. If more than 2/3 of both houses votes aye, the bill becomes law despite the President’s veto. If not, the bill dies.

Things got messy. Here’s what actually happened:

Congress passed the farm bill conference report. The engrossed bill was OK.

  • In the enrollment process, the House Clerk accidentally left out Title III, which covers agricultural trade and international food aid.
  • Speaker Pelosi and President Pro Tem (PPT) of the Senate Byrd signed the enrolled bill (missing Title III), and the Clerk presented (sent) it to the President.
  • The President vetoed the bill presented to him, by returning it to the House with a veto message stating his objections. Note that the bill the President vetoed is different than the bill the House and Senate actually voted for.
  • The House then took up the returned bill (still missing Title III) and voted to override the President’s veto. The bill was sent to the Senate, which did the same.
  • From the perspective of the Executive Branch, that bill (with no Title III) is now law, despite being different bill from what the Members of Congress voted for and thought they were sending to the President.
  • Now Congress has to pass a new bill that deals with Title III to correct their error.

How can this be the case? A Supreme Court decision in the late 19th century (Marshall Field & Co. v. Clark) established that the bill is whatever the Clerk presents to the President as the enrolled bill, even if it differs from the engrossed bill that the House and Senate passed. The Supreme Court declined to “look behind” the action of the Speaker of the House and the Senate PPT: as long as they have attested, through their signatures, to the bill enrolled by the House or Senate Clerk, then that bill is the formal definition of what the House and Senate passed, even if it differs from the language actually passed by the House and the Senate.

From the perspective of the Executive Branch, our hands are tied – there is no process to look behind the enrolled bill as presented to the President – the President has to deal with the bill he is sent. And once the veto was overridden, from the perspective of the Executive Branch all the constitutional formalities had been completed, and the bill became law, even though the President had objected to it, and despite the procedural foul-up.

The House majority leaders were aware of their blunder when they scheduled the veto override vote, and debated it on the House floor before that vote. It is odd that the Congress chose to take up and rush through a veto override of a bill that they knew was incorrect. One result is that we now have to implement a bill filled with bad policy. Another is that Congress must now pass a separate bill dealing with Title III.

This also serves as an opportunity to, at a minimum, fix important problems in the food aid title that Congress had planned to include in the first bill. The President has asked for two areas of flexibility in the food aid title that would allow the U.S. government to use the same number of dollars to help more starving people overseas.

  1. The President has asked for flexibility to spend up to 25 percent of certain food aid funds ($300 million per year) to buy food locally or “in country” from farmers (say, in Africa), rather than buying food in the U.S. and then shipping it to Africa. This is faster, because money can move instantaneously, while crops take weeks to move on ships. And it supports the development of an agricultural economy in the country in need. Historically low grain stocks and recent price increases make this reform more important than ever. U.S.-grown food will continue to play the primary food aid role, and will be the first choice in meeting global needs, but this flexibility would provide us with some ability to help more hungry people faster.
  2. We are concerned about Congress’ action to restrict the President’s ability to spend food aid money on emergency food needs. The version of the trade title that fell out of the vetoed bill required that increased funding levels be spent on “non-emergency” needs, like maternal and child health, and on sustainable agricultural practices. This means less money is available during times of crisis (like now) to buy food for emergencies. A cynic might claim that this is an attempt by some in the Congress to force the Administration to come back and request even more funding, rather than allowing us to use the existing pot of money more efficiently. This action would undermine the ability of the U.S. to save lives in emergency situations around the world.

We hope that the Congress will fix these two problems in the new Title III bill. Hungry people around the world deserve it.

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