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Shades of 1960s, Decisive Votes Usher in Sweeping Health Care Reforms

March 22, 2010
Related Topics: Medical Benefits Law, Benefit Design and Communication, Latest News

Democrats in the House have passed the most sweeping set of health care reforms since the advent of Medicare in the 1960s, doing so amid a weekend that resembled that decade in more ways than one.

The House approved a $940 billion health care reform package in a series of votes. In a vote of 219-212, the House first approved the Senate’s larger health care reform package, which is expected to be by signed by President Barack Obama by Tuesday, March 23.

Shortly afterward, the House cleared a reconciliation bill meant to revise the larger bill by a vote of 220-211, leaving the Senate to vote on the reconciliation bill.

Policywise, the two bills should be looked at like a single package. Working in tandem, the bills would trim $143 billion from the federal deficit over a 10-year window—$124 billion coming from health provisions and $19 billion from education and student lending measures, according to the Congressional Budget Office.

Provisions include:

• A requirement that most every person buy some level of health insurance coverage, with tax credits to help defray costs.

• Financial penalties for employers that do not offer insurance and for those individuals who do not acquire coverage.

• The creation of a new “exchange” where insurance companies can compete for customers.

• Increases in the federal share of spending for certain Medicaid beneficiaries.

• An expansion of Medicaid benefits to those at 128 percent of the federal poverty level.

• A reduction in payments to Medicare Advantage.

• Restrictions on physician ownership of hospitals.

• A phase-out of the so-called “doughnut hole” in the Medicare Part D prescription drug benefit.

• An excise tax on insurance plans with relatively high premiums.

Hospitals for the most part applauded the legislation. Richard Umbdenstock, president and CEO of the American Hospital Association, said the AHA was “very pleased to be able to support the bill.”

“Our main goal was to extend coverage and access, and 32 million Americans get coverage through this bill,” he said.

Umbdenstock specifically praised a last-minute measure that establishes $400 million over two years in new money that would be directed toward hospitals in counties that have collectively low Medicare Part A and B reimbursement. “I’m pleased the matter of geographic variation was resolved and done so with new money to recognize those [hospitals] with lower quartiles of payment,” he said.

Chip Kahn, president of the Federation of American Hospitals, which represents for-profit hospitals, also lauded passage of the bills. “From our standpoint, it accomplishes the kind of progress we were hoping for,” where health coverage is the first priority, he said.

Kahn was also pleased that the legislation settles the issue of physician ownership by placing restrictions on these types of hospitals, and that it stiffens the employer and individual mandates on insurance. Employer coverage in particular is critical for all hospitals, he said. With hospitals still being underpaid by Medicare and Medicaid “we will depend on good payment for private coverage.”

Physician groups weren’t happy to see the restrictions placed on physician-owned hospitals, nor were they pleased with the inclusion of an independent payment advisory board that would target doctors but exclude other health care sectors such as hospitals.

Physician groups have said they would lobby to tweak or altogether overturn those provisions in future legislation. In a teleconference Friday, March 19, J. James Rohack, president of the American Medical Association, said that Congress should “move immediately to correct problems with the bill’s proposed Independent Payment Advisory Board,” which he said could result in misguided payment cuts that undermine access to care and destabilize health care delivery.

A number of medical societies broke ranks with the AMA in opposing the bill. In addition to being upset over the advisory board, the societies were disappointed over the fact that Congress didn’t address the chief policy issue for doctors: fixing Medicare’s flawed physician payment formula.

The votes capped a long and contentious weekend in which not a single Republican vote was gotten for the effort. Outside the Capitol and in the halls of its surrounding office buildings, protesters kept a two-day vigil going against the legislation, often shouting “Kill the bill!” while also offering personal insults directed at lawmakers.

The heated rhetoric had been there since Day One of the yearlong effort to reshape how care is delivered and paid for across the country. But in the final two days, the tone sharpened as Democrats methodically picked up votes and opponents started to realize that the outcome of the vote would not be in doubt late Sunday night.

House Majority Leader Steny Hoyer of Maryland, speaking on the House floor to officially open debate on the two bills, harkened back to the days when lawmakers passed other major pieces of social legislation, such as Medicare, Social Security and civil rights. Hoyer said that “slurs, hyperbole and untruths” were common among all three of those movements, and he added the current health care reform effort among them.

“Those slurs were false in 1935, they were false in 1965, and ladies and gentlemen of the House, they are false in 2010,” he said. “This bill will stand in the same company for the misguided outrage of its opposition and for its lasting accomplishment for the American people.” 

Filed by Matthew DoBias and Jennifer Lubbell of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail

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