Health Care Reform: The Impact of the Massachusetts Senate Race

January 16, 2010

On January 15, 2010, top congressional Democrats reported that they were “close” to an agreement with the White House on cost and coverage issues and that a draft would soon be sent to the Congressional Budget Office, the official authority on the cost and extent of coverage that any new legislation would provide. However, the outcome of the Massachusetts Senate race has created a significant obstacle to passing a health care reform bill for the Democrats in the Senate.

On January 15, 2010, top congressional Democrats reported that they were “close” to an agreement with the White House on cost and coverage issues and that a draft would soon be sent to the Congressional Budget Office, the official authority on the cost and extent of coverage that any new legislation would provide. However, the outcome of the Massachusetts Senate race has created a significant obstacle to passing a health care reform bill for the Democrats in the Senate.

In an almost unthinkable turn of events, the Senate seat held for decades by the late Edward Kennedy (D) was turned over to the Republican candidate Scott Brown, who beat out Martha Coakley (D) in a special election on January 19, 2010. Once Brown is seated, the Republicans will have 41 votes opposing the bill, which is enough to start a filibuster. Senate Majority Leader Harry Reid (D, Nev) said that Brown will be seated “as soon as the proper paperwork has been received.” That means he’ll be seated anyday now to who knows when.

As for what to do with the health care reform bill, the reported preference of the White House is for the House to accept the Senate-approved version of the bill, but several members of the House have said that they are not prepared to do so, even at the risk of killing the bill. A hurried vote on a bill not yet ready would draw major criticism from the Republican party; cause serious infighting within the Democratic party and between the House and the Senate; and potentially alienate the public, who are becoming increasingly frustrated by the entire process.

Before the special election in Massachusetts, a major obstacle to the bill was the extremely controversial deal that the White House made with Sen Ben Nelson (D, Neb) to provide his state with a $100 million subsidy to cover proposed Medicaid costs in exchange for his vote for health care reform. However, Sen Nelson has asked that the subsidy be removed from the legislation, and instead President Obama and lawmakers will increase federal money for Medicaid in all 50 states. However, this decision was made only after details of the Nebraska deal became public and drew harsh criticism from governors and members of Congress over what was essentially a bribe.

Expanding Medicaid coverage is a key element of the Obama administration’s overall goal of securing health care coverage for the millions of uninsured or underinsured Americans. The creation of insurance exchanges is another key element. These exchanges will allow consumers to shop for insurance in federally regulated marketplaces, and lower-income single persons and families would receive federal subsidies to defray the cost. Some measure of insurance reform, specifically to curb the industry’s practice of denying coverage because of a preexisting condition, is also expected to be in the bill, but as of this writing, no specific details have been made public.

President Obama also would like a shorter period of patent protection for drug manufacturers. According to the FDA, patent protection on a brand-name drug typically lasts an average of 11 years. Allowing the less costly generic drugs to enter the market sooner could potentially save tens of millions of dollars in drug costs alone. However, the pharmaceutical industry’s top lobbyist, former Rep W. J. “Billy” Tauzin (R, La), will oppose the legislation if such a measure is included in the bill.

At this point, however, the White House just may concede all of the remaining items on their wish list if it means that the bill gets passed. Most of the discussions are behind closed doors, but it seems as if the White House and Democrats are going to try to “fix” the bill so the House will support it, allowing President Obama to sign it into law. These fixes are rumored to include lessening the tax on high-cost insurance plans and closing the doughnut hole coverage gap in the current Medicaid prescription drug benefit. And like before, it’s a guessing game as to what is going to happen.