This week, some House and Senate health aides began informal discussions and negotiations to merge H.R. 3590, the health reform legislation passed by the U.S. Senate on December 24, with H.R. 3962, the comprehensive health measure passed by the House of Representatives in November. For NAHU’s side-by-side comparison of the two bills, click here.

It will take a substantial amount of negotiations to merge these two bills while maintaining a coalition of Democrats large enough for final passage. This week, many congressional staffers were out of the office or reviewing the thousands of pages of legislative language that comprise the two bills. While it is clear that some informal discussions among leading staff have already begun, every discussion so far has been behind the scenes. As for our elected officials, House and Senate members are not formally scheduled to return from their holiday recess until mid-January, but the health care discussions between key members are expected to get under way far in advance of that. Senate Finance Committee Chairman Max Baucus (D-MT) indicated last week that key senators may conduct limited discussions this week via telephone.

It remains unclear whether a formal conference committee, which is typically televised on C-SPAN, will be held to resolve those differences, or if the negotiations to resolve differences between the two bills will be conducted on an informal basis between congressional leaders. Democratic leaders will make the decision on the conference committee procedure in early January and make formal appointments to the committee at that time, if necessary.

The key differences that need to be resolved in conference include the potential creation of a government-run public plan or some variation, the provisions addressing the use of federal funds to cover abortion procedures, and the financing of the measure. The House bill pays for it primarily through an income tax surcharge on the wealthiest Americans, whereas the Senate imposes an excise tax on high-cost health plans, raises the Medicare payroll tax by 0.9% for higher-wage earners, and imposes new taxes on health insurers and other industries.

Another wrinkle is that both versions of the legislation use substantial cuts to Medicare to finance large portions of the bill. However, the Congressional Budget Office recently reported that this funding was also to be used to shore up the solvency of the Medicare trust fund, and cannot be spent twice.

In addition to the more high-profile issues, additional items that are of high priority to NAHU and need to be resolved are the role of the states in the exchange and health reform generally, the medical loss ratio requirements and the structure of the exchange and other health insurance market reforms—including the individual mandate and its potential enforcement. We are working, in conjunction with industry and coalition partners, on a conference committee strategy concerning these key issues and will continue to keep you informed of any breaking developments. If you have any questions, please feel free to contact a member of our Government Relations Department.

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States Begin to Question the Constitutionality of Some of the Health Reform Provisions in the House and Senate Bills

On December 23, the attorneys general in eight states (Alabama, Colorado, Georgia, Michigan, North Dakota, South Carolina, Texas and Washington) announced that they will investigate the legality of the special funding arrangements for Nebraska’s Medicaid program that Senator Ben Nelson (D-NE) negotiated to secure his vote for H.R. 3590’s final Senate passage. The legislation would give Nebraska a permanent exemption from paying a state match for Medicaid expansion population created by the legislation, but the other states would need to begin to pick up a share of those expenses beginning in 2017. The bill also would grant an additional Medicaid funding to the states of Louisiana, Massachusetts and Vermont. This investigation was prompted by a letter from South Carolina’s two senators, Jim DeMint and Lindsey Graham, to their state’s attorney general raising the issue and asking how to proceed. 

Provisions in the Senate bill that exempt only certain non-profit insurers from the $6.8 billion annual premium taxes imposed on health insurers beginning in 2011 may be challenged as well. According to a Democratic Senate aide, the language was written in a way that only Mutual of Omaha Insurance Company, as well as Blue Cross Blue Shield nonprofit plans in Nebraska and Michigan, would qualify.

Possible exemption for nonprofit insurance companies is crafted for those that meet several requirements. One way to qualify is to spend an average of 92% of premiums on health care expenses. The provision also could exempt nonprofit insurers that provide guaranteed-issue coverage to people who can't get insurance plans elsewhere.

Finally, many lawmakers have also begun to question the constitutionality of the individual mandate provisions for all Americans to purchase qualified health insurance coverage called for in both bills. This week, the attorney general of Florida, William McCollum (who is also a gubernatorial candidate), held a press event to question the mandate. At least 10 other state attorney generals have made similar statements in recent months, indicating the likelihood of a constitutional challenge by at least some states should the provision actually become law. The legal arguments surrounding this issue are interesting and here for your benefit are some resources that delve into the issue:

• The Heritage Foundation analysis critiquing the individual mandate
• A floor speech by Senator Max Baucus (D-MT) defending the individual mandate

On a related front, The New York Times reported this week that about a dozen states are debating a proposed amendment to their state constitutions that would try to block, at least symbolically, much of the proposed federal health care overhaul on the grounds that it tramples individual liberty.

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NAHU Legislative Town Hall Webinar on the Health Reform Conference Process

NAHU CEO Janet Trautwein and President Russ Childers will host a free one-hour legislative town hall meeting webinar for members on January 8 to discuss the progress of federal health reform legislation and NAHU’s priorities and goals as the measure works it way through the conference committee process. Click here to register.

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Learn More about the New COBRA Subsidy Extension and How It Will Impact Your Clients

On December 21, President Obama signed into law a measure that includes an extension of the federal subsidy of COBRA and state continuation benefits created last spring by the American Reinvestment and Recovery Act of 2009 (ARRA). The new law extends the subsidy from nine to 15 months, and changes the eligibility date from December 31, 2009, to February 28, 2010.

NAHU will host free, one-hour professional development webinars for members on January 6 at 4:00 p.m. EST and January 7 at 1:00 p.m. EST. The webinars will discuss the subsidy changes and how agents and brokers can best help their clients. Please click here for registration information.

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Register for NAHU's Capitol Conference 2010 Today!

Registration and the hotel room block are now open for NAHU’s 2010 Capitol Conference to be held March 8-10 at the JW Marriott Hotel in Washington, DC.

The 111th Congress has spent much of this year actively working on comprehensive health care reform and will continue its efforts into 2010. It is vital, especially this year, that NAHU members visit with our lawmakers and present ideas that work. 

Capitol Conference is a unique chance to sit down and share our knowledge with the people who make the laws that affect our profession and our clients. It’s also a great opportunity to connect with your fellow members about health care reform ideas and hear exciting speakers address the current state of our delivery system.

The schedule this year will feature a full day of training and information sharing on Monday, March 8, and exciting speakers and Capitol Hill visits on Tuesday, March 9, and Wednesday, March 10. We need as many NAHU members as possible in Washington this year to make our voices heard. We look forward to seeing you at Capitol Conference 2010!

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