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Democrats Strike a Health Care Deal

July 29, 2009 - by Donny Shaw

As you’ve probably heard by now, the Blue Dog Democrats that have been delaying progress on the health care bill (H.R. 3200) for two weeks straight have finally struck a deal with the Democratic leadership and are allowing the bill to move forward. The bill has been blocked in the House Energy and Commerce Committee by seven Blue Dogs with a list of 10 objections, some of which go to the heart of the legislation’s key proposals. Today’s deal will allow the committee mark-up to go forward and the bill to pass out of committee.

The most important part of today’s deal isn’t about the substance of the bill, it’s about timing. In exchange for dropping some of their objections, the Blue Dogs have won a guarantee from Democratic leaders that they won’t bypass their committee and rush the bill to the House floor for a vote before leaving for recess on Friday. Beyond their policy disagreements, one of reasons the Blue Dogs have been so reluctant to move forward wit the health care bill is that they don’t want to have to place a tough vote on a public option if the Senate is just going to scrap it eventually. Under today’s agreement, both the House and Senate will go into the August recess with their health care bills fully out of committee and ready for floor action.

But the deal did include some changes to the substance of the bill as well. As far as I can tell, here are the changes that were agreed to:

1) Like the Senate HELP bill, the public health insurance option won’t use Medicare rates. Instead, it will be up to the secretary of Health and Human Services to negotiate public plan rates with providers.

2) Raises the employer mandate exemption from businesses with $400,000 or less in total payroll to businesses with $500,000 or less. Businesses with payrolls between $500,000 and $750,000 would be subject to a sliding scale tax if they don’t provide health insurance, and those above $750,000 that don’t provide insurance to pay a tax equal to 8 percent of total payroll.

3) Strengthens language in the bill allowing states to set up non-profit health care co-ops.

4) Raises eligibility standards for subsidies to individuals who pay more than 12 percent of their income to health insurance. The original bill set the threshold at 11 percent.

5) A new requirement that states pay for some of the costs of Medicaid expansion. Under the deal, states would have to put up 7 percent of the cost for some (unspecified) period of time.

Overall, the agreement is expected to strip about $100 billion from the total price tag of the bill, though the Congressional Budget Office hasn’t officially scored it yet.

The main takeaway from today’s deal is that it raises the stakes for August. For the past week, the buzz in the media has been that momentum for health care reform was fading and that the Republican-led opposition was going to enter the month-long recess sensing blood. But today’s deal changes all that. If everything goes as planned, we’ll enter the recess with three health care bills – two with public options and one with a co-op – officially out of committee. The Clinton health care bill in’94 died in committee; the current Congress would go home to their districts already beyond that point.

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