Health Care Reform – Not Dead Yet!

President Obama unveiled his health care reform proposal on Monday, February 22, 2010, just days before the White House health care summit. The bipartisan summit is an invitation only event, involving senior leadership from the House and Senate, chairmen and ranking members of the Congressional Committees that oversee the health care reform legislation, and up to four additional members from each party as designated by the senior leadership. The summit will be held at the Blair House on Thursday, February 25, and will be broadcast live beginning at 10:00 a.m. (EST).

In the invitation to attend the summit, which was sent to Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner, the Obama administration advised it would post online the "text of a proposed health insurance reform package" prior to the summit. Republicans have urged the administration to scrap the bills passed by the House and Senate last year and to start anew. The president rejected this idea and instead developed his proposal based largely on the bill the Senate passed on December 24, 2009; however, the president has proposed several changes, including the following:

· Eliminate the much criticized Nebraska Medicaid funding benefit and include additional federal funding for all states to cover some of the state costs created by the expansion of Medicaid;

· Close the Medicare prescription drug "donut hole" coverage gap over time;

· Increase tax credits, lower premiums, and increase cost sharing for families at certain income levels;

· Strengthen provisions to address fraud, waste, and abuse in Medicare and Medicaid;

· Increase the threshold for the so-called "Cadillac" tax on high cost health plans from $23,000 for a family plan to $27,500 (from $8,500 to $10,300 for individuals) and delay the effective date to 2018; and

· Create a new Health Insurance Rate Authority to provide federal assistance and oversight to states conducting reviews of rate increases.

The creation of the new Health Insurance Rate Authority is a reaction to the reports of significant rate hikes from insurers for 2010 that have been prominent in news reports over the past week. In fact, the administration has seized upon these reports, and the associated public outcry, to help rejuvenate its health care reform effort.

We will continue to monitor developments in Washington, D.C., and will issue another bulletin on the results of the summit. In the meantime, please feel free to contact Greg Pemberton or Kevin Woodhouse.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.