Listen to the Interview (mp3)

Jackie Judd: Good day, I’m Jackie Judd with Health On The Hill. Joining me with an update on health care reform negotiations on Capitol Hill: Mary Agnes Carey and Eric Pianin, both of Kaiser Health News. Mary Agnes, what is the state of play on the Senate side where Max Baucus, the Chairman of the Senate Finance Committee, two other Democrats and three Republicans were still huddling last night trying to come to some kind of an agreement on legislation?

Mary Agnes Carey: Right, well, of course everyone involved stresses that it’s not a deal until everything is agreed to. But here are some of the things that they were talking about. Last night, they talked a lot about financing options. They’re looking at this tax on health insurance plans that  some describe as ‘gold-plated.’ The area of value of the plans could be around the vicinity of $25,000 or higher. That was discussed as a financing option.

The finance group that’s working together is coalescing around a couple of areas. One is called a free-rider provision. And under this, if an employee were allowed to get a subsidy to go into the health insurance exchange or go into the Medicaid program, the employer would be required to contribute some, if not all, of the cost of that amount. This is a provision they are looking at to try to discourage employers from dumping employees that might have health insurance in the private sector into the public sector. It’s called a provision called “crowd out.” You don’t want to create public policy that drops insurance coverage in the private sector and puts [people] them into the public sector. That’s one thing.

The finance group also seems to be coalescing around this idea of regional co-ops versus the broader public plan that’s being discussed and is in the House Democratic proposal. And a regional co-op or a state co-op, however they would set it up, would be designed to work in that area. That’s versus the idea of one national public plan for health insurance. So those are all of the areas that the Senate Finance Committee has been discussing and is leaning towards at this time.

JJ: Going back to the free-rider provision. If that same small business owner had an employee who did not qualify for any kind of public subsidy, would that owner then be responsible or have no responsibility in terms of providing health care?

MAC: I think that’s going to come down to: what is the threshold of small businesses that have to provide coverage? For example, in the final bill say, do they say companies with 50 or more employees are required to provide coverage? It depends on what that threshold is.

JJ: And the idea of the regional co-ops. Certainly a different one than the public option, but would the criticism be the same? That these co-ops could create a situation where the insurance industry could argue that its finances would be in jeopardy because it would depress prices?

MAC: I think it all comes down to the way they design co-ops. The big criticism against the co-ops is that it isn’t one uniform national standard. Now, for people who like the idea of a co-op they say: ‘precisely, we don’t have to have one size that fits all and a particular area can decide what’s best to cover the uninsured or to provide coverage rather in that particular area.’ So that’s in the side of people that like the regional co-ops. If you don’t like the regional co-op and you prefer a broader public insurance plan, you would make the argument that we need to have a uniform standard that is available to everyone, no matter where they live. So, I think the insurance industry will be watching, of course, with an eye on their bottom line, to see how this impacts them.

JJ: Eric, you took watched the House yesterday. There were two significant events there. The Energy and Commerce Committee Chair, Henry Waxman, met with Blue Dog Democrats, and then later in the day there was what’s being called a seminar for House Democratic members to walk them through the thousand page bill that’s in play on the House side. What happened?

Eric Pianin: Well, I think that the Democratic leaders made it clear that they’re very eager to get things moving, they’re very eager for Energy and Commerce to complete its negotiations. But they’re willing to show some patience in possibly waiting until this Fall to bring a bill to the floor rather than coming up with a measure that they really can’t sell to the vast majority of the members of their caucus.

Things were going on on dual tracks yesterday. The rank and file members of the Democratic caucus were being brought in and given, as you say, a seminar on what’s in the emerging legislation. Staff members from three committees that have jurisdiction in this matter were in a big room and members came in throughout the day to ask their questions and listen and learn.

But the real action was going on elsewhere with Henry Waxman meeting with a small handful of conservative Blue Dog Democrats trying to iron out difference that have held up this legislation. I think they’re making some progress, but it’s probably not moving along quickly enough so that they could wrap things up, have a bill ready to be sent to the floor by late this week or early next week for them to vote on. And so, Nancy Pelosi, Steny Hoyer, and other members of the leadership are signaling that it’s quite possible that, at most, we’ll get some action out of the Energy and Commerce Committee and then people will go home for the summer, think it over, and then come back in the fall and vote.

JJ: There was an Associated Press report that said that Waxman actually had made some type of offer to the Blue Dogs. Any idea what that offer was?

EP: Well, there are several issues that are near and dear to the hearts of the Blue Dogs. One of them has to do with the Medicare reimbursement rates for doctors and hospitals and there’s a big concern in rural areas that the rate system works against hospitals and doctors. They have been pushing to change the rate structure, so that any hospital or doctor providing services to patients who take part in the new public option would be reimbursed at a higher rate than Medicare. This is to address what they see as longstanding regional disparities in the reimbursement system. So that’s one thing that they’re working on.

There’s also a big concern among the Blue Dogs that small businesses in their region would be hurt by an employer mandate. They want to make sure that there are some exemptions for the smallest of businesses so that they’re not basically driven out of business or forced to get rid of employees or refuse to hire employees who would likely require health care coverage by that business.

I think also the Blue Dogs have been pushing to keep the public option or the public insurance plan in reserve as something that could be triggered and put in place if the overall health insurance scheme doesn’t work down the road. Democratic leaders in the House are very adamant that the public option should be put in place immediately, and so I think there is a lot of push back from the leadership on that issue.

JJ: A quick final question to each of you, starting with you, Eric. What’s expected today? More negotiations?

EP: More negotiations by Waxman and the Blue Dogs. They have their fingers crossed that they can bring a bill to markup in Energy and Commerce by Wednesday. That may be wishful thinking. The hope is that they can somehow get committee action before Congress recesses for the summer.

JJ: OK, and Mary Agnes on the Senate side?

MAC: Negotiations will continue. Max Baucus is scheduled to meet with Senate Finance Committee Democrats this morning. He’ll resume his negotiations with the Democrats and the Republicans on the panel that are part of the gang of six. They’ll talk later today. Last night when Sen. Baucus was asked, “Will you be able to markup your bill in committee by the time the Senate is scheduled to leave?” which is August 7, he said, “We don’t know, we’ll be ready when we’re ready.”