Hedge on pledge
Groups: Cover more people, or let us contribute less
As lawmakers hunkered down behind closed doors last week to begin the task of merging two comprehensive healthcare bills into one, hospital groups set boundaries on what they’d be willing to contribute to the final bill.
The nation’s hospitals last summer in an agreement with the White House and Senate Finance Committee had pledged to accept $155 billion over 10 years in lowered federal insurance reimbursement toward the cost of insuring Americans without coverage. While accepting reductions to Medicare and Medicaid payments, hospitals expected to benefit financially over the long term by caring for more insured individuals under the new health reforms.
But now with the current terms of the Senate healthcare overhaul expected to cover fewer of the uninsured than agreed upon, the hospital industry is calling for a possible revision. In the event a final healthcare reform bill falls short of the coverage expansions as outlined in the House bill, such a commitment should be reduced, the American Hospital Association wrote in a letter to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.). The reasoning for this is the $1.1 trillion House bill aims to cover at least 96% of all Americans, while the $871 billion Senate bill has a slightly lower target of 94%.
Lawmakers shouldn’t be surprised by the AHA’s position on this, said Richard Pollack, executive vice president of the association. “We’ve always taken the position that the $155 billion was related to getting 96%-97% coverage” for those uninsured legal U.S. residents in the country, and the House bill comes pretty close to that goal, he said.
The Federation of American Hospitals made a similar request in its own letter to congressional leadership. The Catholic Health Association, the third major hospital group involved in the White House agreement, said it “concurred with the principles of the AHA” on this matter, according to CHA spokesman Fred Caesar.
This doesn’t necessarily mean the agreement is in trouble, said Kemp Dolliver, managing director of equity research at Avondale Partners, a Nashville-based investment bank that recently did an analysis of the potential effect of the healthcare bills on various sectors of the healthcare industry. “It means the AHA would like to see either the higher coverage number or some reduction in the Medicare cuts,” Dolliver said.
Pollack also brushed off the notion that the agreement was on shaky ground. The industry’s financial commitment is just one component of the terms reached between the hospitals, the Senate finance panel and the White House, Pollack said, in an effort to put the issue in perspective. He conceded that negotiations “are in a challenging stage of mix and match, where we’re still trying to get the most favorable and best provisions in each bill.”
While the AHA favors the House’s coverage target, its letter also supported some of the Senate provisions, such as allowing not-forprofit, nongovernment organizations to negotiate rates with providers as an option in the exchanges, and omitting a public option.
Hospital groups weren’t the only trade associations making final wish lists to lawmakers last week. In its own letter to key legislators, the American College of Physicians rallied for the primary-care lobby, claiming that Congress should increase Medicare and Medicaid payments to primary-care physicians.
Pelosi seemed confident that the players in reform would be able to reconcile their differences and meet the “AAA test,” otherwise known as accountability, accessibility and affordability.
Yet, tense discussions lie ahead between the chambers. House Democrats said they were concerned that they could lose tough-fought ground on abortion, taxes, immigration and Medicaid funding as party leaders negotiate a final overhaul bill.
Finding a compromise between the two chambers on how to pay for the bill remains a chief sticking point. Rep. Louise Slaughter (D-N.Y.), chairwoman of the House Rules Committee, acknowledged last week that lawmakers might have to find a “hybrid” solution between the Senate’s primary “pay for”—the excise tax on insurance plans—and the House’s language to establish a surtax on wealthy individuals to offset the cost of a national healthcare overhaul. While the president may be committed to an insurance excise tax, even Pelosi admitted the approach “is not a popular initiative in the Congress, in the House or in the public.”
Unsurprisingly, the insurance lobby doesn’t like it either. “Cost containment shouldn’t begin and end with a Cadillac tax,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans, in a meeting with reporters last week.
The insurance industry has also taken issue with Congress’ interest in federalizing the regulation of the health insurance exchanges in the legislation. “State insurance regulators have extensive experience and expertise in regulating health insurance. They are also closer to consumers and have a better understanding of the markets they regulate than a single national regulator in Washington, D.C., could have. For these reasons, consumers are best served by insurance regulation that is located firmly at the state level,” the National Association of Insurance Commissioners stated in a letter to Pelosi and Reid.
(For more on reform, see the Washington Outlook, p. 28).
House Speaker Nancy Pelosi says she’s confident that the players in reform will be able to reconcile their differences and meet the accountability, accessibility and affordability test.