THE TREATMENT JANUARY 15, 2010
Negotiations over health care reform continued into the wee hours of Friday morning, as President Obama presided over a White House meeting with his top advisers and congressional leaders.
The group met in the Cabinet room. Obama didn't leave until just before 1 a.m. The congressional delegation, which included House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, didn't depart until 1:25.
No agreement was reached and talks will continue today. But several sources from the administration and Capitol Hill suggested that a deal was getting close. "I think we are approaching the end," one Democratic source said.
Multiple, sometimes contradictory stories about the details of negotiations were circulating throughout Washington world all night long. But those with direct knowledge of the talks said there was an emerging, if still fluctuating, consensus that insurance exchanges in the new system would be some sort of state-national hybrid--possibly a blending of the proposals that gives states more autonomy than the House proposal envisioned but gives the federal government more regulatory oversight than the Senate proposal initially sketched out.
Sources also suggested that the negotiators were talking seriously about tapping new sources of revenue and savings, including greater cuts to Medicare Advantage subsidies and the addition of investment income to the new Medicare tax on the wealthy. Also under discussion, according to the Wall Street Journal's Naftali Bendavid and Laura Meckler, were larger cuts to the device and nursing home industries.
But sources cautioned that much of the money would be plugging the financial hole left when negotiators agreed to pare back the tax on expensive health benefits. (And, by the way, officials still don't seem sure how big, exactly, that financial hole is.) As a result, they said, it was unlikely the final bill would have substantially more outlays than the bill that passed the Senate--unless negotiators found even more revenue or offsetting savings.
To be clear--to be very clear--options for more money are certainly available: extracting more savings from the hospital industry, revisiting the tax on high fructose corn syrup, and so on. But if there was serious consideration of such offsets, sources--er, my sources--weren't talking about it.
(Via Politico, the administration does seem to be seeking greater savings from the drug industry. But it sounds like only $10 or $20 billion, which is still far less than the House bill seeks.)
Whatever the net addition of new money, a key issue will be how to spend it. The biggest weaknesses of the Senate bill, relative to its House counterpart, are in so-called actuarial value and overall limits on out-of-pocket spending. The low actuarial value, in particular, would mean higher cost-sharing for a large number of people with moderate- to heavy medical expenses. (High out-of-pocket limits also mean higher cost-sharing, but they tend to affect only the very sickest people, since only the very sickest people spend enough to reach those limits.)
But improving actuarial value costs a lot of money--precisely because it affects so many people. It also raises more political opposition among even some moderate Senate Democrats. As such, discussions were apparently moving towards improving, instead, the subsidies for purchasing insurance--although sources cautioned again that, at least as of very early this morning, discussions remained extremely fluid.
The goal, all week long, has been to wrap up negotiations today, so that language could go to the Congressional Budget Office.