On Tuesday, September 29th, 2009, the Senate Finance Committee resumed its mark-up of the America’s Healthy Future Act of 2009. The Committee debated many highly contentious issues, including whether to add a government-run health plan to the bill, the role of comparative effectiveness research and rationing, and the scope of the individual mandate.

The Defeat of Two Versions of the Public Option. (Rockefeller Amendment C6, Schumer Amendment C1)

Senator John Rockefeller (D-WV) and Senator Charles Schumer (D-NY) both introduced amendments to Chairman Max Baucus’ (D-MT) health care bill that would replace the federally created “Co-Op”, proposed by Senator Max Baucus, with a robust public option.

Sen. Rockefeller’s amendment would have created the “Consumer Choice Health Plan” (CCHP). It would have been available to all individuals and businesses using the proposed national health insurance exchange. For the first two years of the CCHP, doctors and hospitals that participate in Medicare would be required by law to also participate in the public plan, and they would be reimbursed under Medicare rates. After two years, Sen. Rockefeller’s public option would switch to negotiating reimbursement rates like private insurers do.

Medicare reimbursement, of course, has nothing to do with market prices; Medicare reimburses doctors and hospitals at level well below that of private insurers. This, in turn, results in a “cost-shift” to persons in private health insurance, as doctors and hospitals charge privately insured Americans more to make up the lost revenue incurred by serving Medicare and Medicaid beneficiaries. As Senate opponents noted, Sen. Rockefeller’s amendment would have worsened the cost-shift and result in even higher premiums for the privately insured.

Committee debate on the Rockefeller amendment lasted for almost five hours. Senate Democrats argued that the public option would create competition and create a “level the playing field”. Senate Republicans countered that creating another government-run entitlement program would not only stifle free market competition, but also reproduce the high levels of waste and fraud and abuse that plagues Medicare and Medicaid. Furthermore, Senator Orrin Hatch (R-UT) emphasized that Medicare already faces trillions in unfunded liabilities, and that using it, particularly its method of financing, as a template for yet another entitlement program would be a fiscal disaster.

Rockefeller’s amendment failed with bipartisan opposition, with a vote of 8-15.

Sen. Charles Schumer’s version of a government run health plan would have required negotiation of reimbursements for doctors and hospitals at the outset and their participation would have been voluntary and not coerced. The Congressional Budget Office (CBO) predicted, however, that such changes would have had little effect on lowering costs. But there would still be additional costs to insurance companies would be passed down to the consumer through higher premiums. Sen. Schumer’s amendment also failed with bipartisan opposition. The vote was 10-13.

The Patient-Doctor Relationship. (Roberts Amendment D4, Roberts Amendment D5, Kyl-Roberts-Crapo-Cornyn Amendment D8)

Under Title III, Subtitle F of Chairman Max Baucus’ (D-MT) health bill, Congress would create a new institute to conduct comparative effectiveness research. This research would compare different treatments for similar ailments, and would make this information available to doctors and patients. Republican Senators have expressed the concern that the information produced by the new institute ( The Patient-Centered Outcomes Research Institute) could easily be used by insurers or federal health care programs to deny certain procedures, compromise ther doctor-patient relationship, or negatively impact doctors’ decisions at the expense of patient care. They further noted that such broad research often overlooks the uniqueness of each medical case and its subsequent treatment. Medical treatment should be tailored to the patient, reflecting the best professional udgment of doctors.

Senator Pat Roberts (R-KS) introduced an two amendments- to strike Title III, Subtitle F altogether and to prohibit cost from being a factor in any clinical effectiveness research that was federally funded. Sen. Roberts wanted to make sure that the “best treatments” were not deemed the best merely because of their lower price tags. Senator Jon Kyl (R-AZ), Senator Roberts, Senator Mike Crapo (R-ID), and Senator John Cornyn (R-TX) also introduced an amendment to limit the use of comparative effectiveness research in federal health care programs and to ensure that such research took into account factors related to the different treatment responses and treatment preferences of patients. All three amendments failed.

Restricting Consumer Choice of Health Benefits. (Grassley Amendment C4, Kyl Amendment C11, Ensign Amendment C5)
The Senate Finance Committee mark includes an individual mandate. It would require Americans to purchase health insurance defined by the government as adequate. Failure to meet the government’s minimum requirements for coverage would result in an excise tax, assessed through the tax code, which would vary depending on income. Several Republican Senators sought to amend this provision and broaden consumer choice of coverage , thereby increasing consumer choice and health benefit options.

Senator Grassley (R-IA) offered an amendment allowing Health Savings Accounts to qualify as minimum creditable coverage under the individual mandate. This amendment failed by a vote of 11-12. Senator Jon Kyl (R-AZ) also offered an amendment which would have prohibited the federal government from setting actuarial values of health insurance plans. This would stop the federal government from forcing persons to buy health benefits they don’t need to satisfy the federal governments level of health insurance. This amendment also failed, with a vote of 8-14.

Finally, Senator John Ensign (R-WY) proposed an amendment that would allow health plans that met the requirements of the Internal Revenue Code to qualify as health insurance plans under the proposed individual mandate. In effect, the Ensign amendment would have broadened the range of acceptable coverage to include those plans that persons currently have under existing tax law. The amendment would guarantee Americans greater flexibility in choosing their health care coverage. Sen. Ensign’s amendment failed on a procedural vote. The significance of these Senate Committee health insurance votes is that they underscore the point that the Senate has no interest in upholding President Obama s repeated promise that if you like the health insurance you have today, that you will be able to keep it.

Once again, ordinary Americans can clearly see how the Senate Finance Committee is hammering out health care policy on matters that are moist important to them- health care costs and health insurance costs, the right to keep their current coverage if they like it, and the right to enoy a relationship with their doctor that is not subject to federal interference.

Once again, ordinary Americans can judge for themselves if there is a gap between the rhetoric of official Washington and the reality of their legislative products.

Kathryn Nix, Heritage Intern, provided the research for this blog.