House Passes its “Affordable Health Care for America Act”

The House of Representatives debated and voted on their version of health care reform legislation. The Affordable Health Care for America Act of 2009 was approved by a 220-215 vote on Saturday night. Just one Republican, Rep. Anh “Joseph” Cao (R-LA), voted in favor of the bill.

The bill, with a $1.2 trillion price tag, includes fundamental changes to the American health care system — creating a public health insurance option to compete with private insurers and for the first time, requiring employers to offer health insurance.

According to the Congressional Budget Office’s (CBO) report, this legislation would cover 96 percent of the legal, non-elderly American resident due to insurance reform. This insurance reform includes the elimination of exclusion clause for pre-existing conditions, lifetime limits on total health care spending and will provide subsidies for low-income Americans to help them purchase coverage in a health insurance exchange.

More information on the physician-related provisions.

SGR Repeal Legislation to be considered after Veterans' Day Recess
As previously mentioned, the House of Representatives removed the initial provision from H.R. 3962 that would have reformed the Medicare physician payment system in order to keep the cost of the Affordable Health Care for America Act of 2009 under the $900 billion target set by President Obama.

Instead, Rep. John Dingell (D-MI) introduced a separate legislation, the Medicare Physician Payment Reform Act of 2009 (H.R 3961), that would replace the SGR with an increase physician reimbursement by 1.2 percent in 2010, canceling the 21 percent cut due at the beginning of next year. Beginning in 2011, the flawed Sustainable Growth Rate (SGR) formula would be replaced and would group services into two categories and establish separate target growth rates, including:

• Evaluation and management services (including office visits, primary care services, emergency services, consultation and home services), primary care and preventive services, which will increase based on the gross domestic product (GDP) +2 percentage points
• All other services will increase based on the GDP + 1 percentage point.

The bill would replace the SGR with a new formula that removes from the spending target items such as drugs and laboratory services not paid directly to providers. According to the Congressional Budget office, H.R 3961 has a net cost of $209.6 billion over a decade (as the revised estimate incorporates information provided in the 2010 Medicare Physician Fee Schedule, including the decision to remove physician-administered drug from the payment calculation).

On Saturday, November 7, the House also approved a rule for considering both H.R 3962 and H.R 3961 in tandem ( i.e., both legislations will be considered at the same time). However, due to Veterans Day recess, the House will consider and vote on the Medicare Physician Payment Reform Act after November 16.

All attention is turned now toward the Senate
In the Senate, Senate Majority Leader Harry Reid (D-NV) submitted its draft legislation to CBO for their estimate of the bill cost. The CBO analysis is likely to be released this week. This legislation is not expected to be introduced until possibly after the Thanksgiving break.

Next Steps

Once the Senate approves its version of health care reform legislation, a selected number of Representatives and Senators will meet in Conference to reconcile both bills. The reconciliation will likely be hard as the two bills differ significantly. To do so, lawmakers will have to resolve the chambers' differences on hot-button issues such as: the public plan, Medicare physician payment reform, drug discounts and negotiations, and pay-fors — including a tax on high-cost insurance plans.

Both the House and the Senate need to approve an identical bill before presenting that to President Obama.