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January 18th, 2010

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For political theatre, it cannot get any more fascinating than this…

As the drama in the Massachusetts Senate election plays out and the future of health reform hangs in the balance, House and Senate negotiators have a real sense of urgency to complete their negotiations in the event that the once unthinkable happens and Republican Scott Brown upsets Democrat favorite Martha Coakley on Tuesday January 19^th.

Intense negotiations at the White House this week appear to have produced the outline of an agreement on the main economic differences between the respective bills:

• Union Plans & the “Cadillac Tax”: Union plans would be exempt from the Cadillac tax until 2018, a big win for House Dem’s and their Union supporters but at a cost to the legislation of an estimated $60 billion;

• Pharma: The loss in tax revenue associated with the union exemption would be made up in part through the pharmaceutical industry in the form of a reduction from 12 to 10 years for the patent exclusivity for many biologic drugs, which is expected to reduce the cost of care throughout the system but will not be sufficient to make up the $60 million deficit.

• National Exchanges: The Senate would forego the State-level insurance exchanges in favor of a single national exchange,  a major boost to those favoring strong federal rather than state control.

While negotiators wait to see the financial impact of these changes via the Congressional Budget Office (CBO), negotiators will focus in earnest on the major political issues that still present the most serious obstacles to an agreement.  Specifically, the issues of federal funding for abortion coverage and eligibility for exchange provided benefits for illegal immigrants are up next and could prove substantially more difficult than the economic issues.

But don’t expect a lot of news on either subject before Wednesday. Until then, all eyes are on are on Massachusetts… Especially President Obama’s.

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Posted by Bill in Healthcare Reform