On July 31, 2009, the House Energy and Commerce Committee approved HR 3200, the America’s Affordable Health Choices Act, by a 31-28 vote. Five Democrats joined all committee Republicans in voting against the measure. Passage followed lengthy negotiations with Democrats on the committee, first with fiscally conservative “Blue Dog” Democrats and then with liberal Democrats in the Congressional Progressive Caucus. Modifications to the underlying bill include the following:
- Requirements that a new public health insurance option must use a formulary and must negotiate payment rates with providers rather than setting rates at 5 percent above Medicare payment levels
- A requirement that insurers selling plans in the new health insurance exchange obtain government approval for premium increases exceeding 150 percent of the annual medical inflation increase
- A provision allowing the Secretary of Health and Human Services to negotiate drug prices with pharmaceutical companies under the Part D prescription drug benefit
- A provision allowing 12 years of market exclusivity for new brand name biologic drugs
- An increase in the small businesses exemption from “pay or play” requirements (the new penalties will be phased in, beginning at 2 percent for businesses with annual payrolls of $500,000 to $585,000, rising gradually to 8 percent for businesses with payrolls over $750,000)
- An expansion of the accountable care organization pilot program to include Medicaid
What’s at Stake
All three House committees with jurisdiction have now approved systemic health reform legislation. The three work products will be merged, and House floor action will occur after the congressional recess, which ends September 7, 2009. This means that systemic health reform is moving forward, although the Energy and Commerce Committee experience demonstrated that the fractious Democratic Caucus in the House has not yet coalesced around a shared vision for health reform legislation.
Steps to Consider
Examine the legislation approved by the three House committees and the Senate HELP Committee, and assess the impact on your operation. Consider attending your legislators’ home state town hall meetings on health reform during the recess. Continually evaluate ongoing business decisions in light of the direction health reform is taking.