The Final Health Care Bill: Winners and Losers

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Democrats are preparing to drop the final health care reform bill—that is, the Senate’s legislation plus a package of fixes to be passed via reconciliation—and already everyone’s scrambling to sort out the winners and losers. One of the big questions hanging over the package of fixes was whether they would reduce the budget deficit by at least $1 billion, as reconciliation rules require. According to the latest analysis from the Congressional Budget Office, that’s no problem: The legislation would cost $940 billion, and the CBO estimates that it will save the government $130 billion in the first ten years and $1.2 trillion in its second decade. If the legislation clears its last hurdle, Democrats will be touting these numbers for the rest of the year to counter the Republican line that health care reform is fiscal insanity.

So who benefits from the latest tweaks to the bill? According to Jonathan Cohn, who has a good round-up, the biggest beneficiaries will include: middle-income Americans, who will get more generous subsidies; senior citizens, who will gain stronger prescription drug coverage in Medicare; and non-unionized workers, whose obligation to pay the excise benefits tax on high-costs plans will be delayed for a few more years (union workers were already exempt). With the new fixes, the final legislation would provide insurance to 1 million more people than the original Senate bill—meaning that the legislation will now cover 95 percent of Americans. It also provides stronger consumer protections in insurance plans. And that’s on top of the market-changing reforms already contained in the Senate measure.

Who’s still unhappy? Union officials remain disgruntled about the so-called “Cadillac” tax on high-costs plans, which will increase more quickly in the final bill than they had hoped. Originally, House Democrats and labor officials wanted to index the tax to inflation plus 1 percent. But the Democrats ultimately had to drop the 1 percent in order to conform to the CBO’s accounting rules and reach their deficit reduction targets required for reconciliation.

Labor’s concern over the tax was serious enough to prompt AFL-CIO President Richard Trumka to go to the White House on Thursday. As I wrote yesterday, the AFL-CIO still hasn’t officially endorsed the bill—they say they’ll reach a decision shortly—and their lingering objections could significantly undermine political support for the legislation. Already, some pro-union legislators are citing the excise tax as a dealbreaker. Democratic Rep. Stephen Lynch–a former ironworkers’ union official from Massachusetts and one of Nancy Pelosi’s floor whips–has already announced that he was switching his earlier ‘yes’ vote to “a firm ‘no'” largely because of his objections to the tax.

 

There are also ominous signs that the final bill could cause friction with Latinos, another major Democratic constituency, who are upset that the legislation doesn’t allow undocumented workers to buy coverage in the new health insurance exchanges. La Raza, the country’s largest Latino advocacy group, announced today that it opposes the bill because of those prohibitions— and Democratic Rep. Luis Gutierrez is still threatening to vote against reform because of them.

 

Democrats will invariably make a push to bring both unions and Latinos on board with the bill—not only to secure its passage, but also because they’ll need strong allies in an election year. But, on the whole, the amendments are improvements on the Senate bill. Bottom line: they make coverage more affordable and accessible. And the CBO’s deficit reduction numbers could give Democrats the ammunition they need to convince wavering moderates to sign on.

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