Perspective

Forestalling a Filibuster — Senate Reform Bill Cleared for Floor Debate

John K. Iglehart

N Engl J Med 2009; 361:e54December 10, 2009

Article

Faced with unanimous Republican opposition, Senate Democrats, joined by two independents, closed ranks in a rare Saturday session on November 21 to advance consideration of a vast health care reform bill. Without a vote to spare on a motion to clear the way for floor consideration of the contentious bill, Democrats prevailed 60 to 39. Having defeated Republican efforts to derail the measure, Senate Majority Leader Harry Reid of Nevada can now open floor debate in early December.

The bill would expand health insurance coverage to about 31 million people at a cost of $849 billion over 10 years, while reducing the federal deficit by $130 billion, according to the Congressional Budget Office. To the disappointment of organized medicine, the Senate bill would only eliminate the 21.2% reduction in Medicare's physician fees scheduled for next January, rather than adopt the House-approved approach that would also replace the formula on which Medicare bases its annual fee updates.

White House Press Secretary Robert Gibbs issued a statement on behalf of President Barack Obama, saying that the Senate vote “brings us one step closer to ending insurance company abuses, reining in spiraling health care costs, providing stability and security to those with health insurance, and extending quality health coverage to those who lack it.”

The daylong debate offered a preview of what promises to be a bruising, full-scale war over reform that may engage the Senate for weeks. In remarks shortly before the vote was taken, Reid accused Republicans of stifling a historic debate that the nation needed to hear: “Imagine if, instead of debating whether to abolish slavery, instead of debating . . . giving women and minorities the right to vote, those who disagreed had muted discussion and killed any vote.” Senate Minority Leader Mitch McConnell (R-KY) said that voting for the procedural motion was tantamount to approving the bill, which, he said, would raise taxes, cut Medicare spending, and create a “massive and unsustainable debt.”

Reid had introduced the bill on November 18, after spending about 3 weeks blending two measures from different Senate committees. The combined measure would require most legal residents to obtain health insurance; set up insurance “exchanges” through which certain individuals and families could purchase coverage with the help of federal subsidies; expand Medicaid; and substantially reduce the growth of Medicare's payment rates for most services (except physician services). The bill's hefty cost would be paid with the proceeds of an excise tax on “Cadillac” health insurance plans, as well as through substantial reductions in the growth of Medicare and Medicaid and other smaller changes in the federal tax code.

As Democrats come closer to enacting a policy goal that has eluded the party for decades, other interests seem certain to join Republicans in opposing the reform bills that cleared the House (220 to 215) and the measure that faces stiff debate in the Senate. Prospective opponents include many governors who fear reform's consequences for state budgets, an array of private-sector stakeholders, and members of a divided public.1 To maintain the 60 votes necessary to defeat a likely string of Republican efforts to block the bill, Democrats will have to negotiate many backroom bargains with senators. The effort to secure the vote of Senator Mary Landrieu (D-LA) to clear the reform bill for floor consideration provided an initial indication of the kind of horse trading that may be needed: Reid ended up folding about $300 million into the bill to help Louisiana pay for health care for its low-income residents.

Most of the major reforms in the bill, including the vast expansion in coverage, will not take effect until 2014. To counter complaints about the long lead time, Democrats have emphasized changes that would take effect soon after the bill is signed into law. Among these are immediate bans on insurance companies' termination of coverage in the event of illness and imposition of lifetime caps on benefits. The bill would also provide immediate access to insurance for uninsured persons with a preexisting condition, help small businesses to buy insurance by providing tax credits to defray its cost, and offer new assistance to lower the cost of prescription drugs for Medicare beneficiaries.

The House-passed and Senate bills are similar in many respects, including the coverage expansion and the creation of a public insurance option to compete against private carriers. Although Reid's bill would enable states to opt out of a public plan, the question of whether to create such a plan at all will be the subject of intense debate on the Senate floor.

Another controversial policy at the heart of these bills is an emphasis on financing reform by redistributing wealth from people of means, most of whom are insured, to middle-class and lower-income individuals and families through public subsidies for coverage. To a large extent, this Democratic approach is diametrically opposed to former President George W. Bush's championing of income tax cuts favoring the wealthy. The House bill redistributes wealth by imposing a 5.4% surtax on high-income households. Reid's bill would impose a 40% excise tax on employer-sponsored health plans with premiums of more than $8,500 for an individual or $23,000 for a family. However, given the concerns of organized labor, whose support Reid needs in his bid for reelection next year, he limited the tax on workers in dangerous fields, such as firefighters, coal miners, and people who repair electric and telephone lines. Reid also proposes to increase the Medicare payroll tax on high-income employees: single people with annual wages over $200,000 and married couples with a combined annual income of at least $250,000 would be subject to a 1.95% payroll tax, rather than the current 1.45%.

Beyond paying for reform, the issues that remain highly contentious include providing coverage of abortion services and allowing undocumented immigrants to purchase coverage, using their own money, through an insurance exchange.

As the Senate prepares to consider reform legislation, the public remains deeply divided over the Democratic plans, and the majority of those responding to opinion surveys are persuaded that health care costs will increase regardless of what happens in Congress. In a mid-November poll by the Washington Post and ABC News, 48% of the 1001 respondents said they support the changes proposed by Democrats, whereas 49% were opposed.1 Among these opponents, 56% believed that the overall cost of health care would increase as a result of reform, and few believed that Americans would see clear benefits in exchange for higher expenses. Republicans came under some fire in the poll: 61% of respondents said that the GOP is “mainly criticizing” Democratic proposals without offering any alternative.

The concerns expressed by the public (and trumpeted by Republicans) over a rising unemployment rate, deficit spending aimed at salvaging the economy, and the wars in Iraq and Afghanistan seem to be affecting the administration's view of health care reform, particularly in relation to spending and the federal deficit. To underscore its commitment to reducing the deficit, the administration disclosed recently that it is considering using some of the $700 billion in economic stimulus money to begin to draw down the deficit. In developing a 2011 budget, the administration has directed cabinet agencies (except the Departments of Defense and Veterans Affairs) to propose two plans — one that would freeze spending at the 2010 level and another that would reduce outlays by 5%. In addition, Congress must soon increase the federal debt limit, currently set at $12.1 trillion — a move that will surely lead Republicans to accuse the administration of overspending.

Given legislators' mounting concerns about the large and growing deficit, winning enactment of the major legislative priority of organized medicine — eliminating future cuts in Medicare's physician fees and developing a new formula for calculating fee updates — has become a greater challenge. On November 19, the House, by a vote of 243 to 183, passed a bill that would accomplish both objectives. However, in a vote taken several weeks ago, all 40 Republican senators and 13 Democratic senators voted to defeat a similar measure.

The growing deficit has also sparked internal debates among the White House staff. Should tighter cost controls be incorporated into the reform legislation? Or would such changes be deemed too disruptive by health care stakeholders — and even by a spending-wary public — and therefore have untoward political repercussions for the administration? Such considerations will no doubt inform the debate as health care reform proceeds to its next set of hurdles.

This article (10.1056/NEJMp0911439) was published on November 25, 2009, at NEJM.org.