Capital Corner: Eleventh Hour in the Eleventh Month for Health Care Reform

Jim Brandenburg, CPA, MST, Shareholder - Tax   email | bio
November 2009

The health care reform debate has reached a critical phase in Washington. The debate this year has been spirited not only in Washington but in towns across the country. The health care reform legislation, originally planned to pass this summer, now moves to the 11th hour in the 11th month. The House and Senate are moving forward with votes on their separate bills. The House version narrowly passed in a dramatic vote this week, and now the attention shifts to the Senate. If the Senate also passes its bill, the two bills will then move to a conference committee. This is where the action will be as the committee may take parts of the House bill and Senate bill or create something new. Every provision and every change will be analyzed and crafted in order to obtain just enough votes to secure final passage in the House and Senate.

As the health care reform legislation is finalized, below are interesting points to observe:

• The administration has made health care legislation a high priority and has invested significant political capital targeted at getting this legislation passed this year, including hosting newscasts and making television appearances.
   
• Public support for health care reform, especially the public option, is tenuous. One group that leaders had thought would back health care legislation is the elderly, but their support is slipping and some are beginning to oppose the bill. If the legislation is not enacted in 2009, prospects for passage in the election year of 2010 will become more uncertain.
   
• The administration and congressional leaders still have significant clout, which should not be underestimated, in pushing forward health care reform legislation. The majority sets the agenda for which bills are voted on and when the votes take place. Generally, legislation is not brought up for a vote unless the majority knows that it has the necessary votes for passage. Further, the majority sets the rules for how debate and votes are to occur. Congressional leadership is in constant communication with the administration as to the latest developments and concerns regarding proposed legislation. Control of Congress is an important ingredient in enacting legislation, especially with this year’s health care reform bill.
   
• Many senators and congressmen know that public support for health care reform legislation is fragile. They realize their political futures are on the line with their votes on this legislation. Several are looking for cover - something to grab on to so they can appear to be fighting for their constituents, while at the same time vote in favor of a final bill. Once a majority is achieved some may be let off the hook by congressional leaders and allowed to vote against the bill, as long as the leadership has enough votes for final passage. If legislation is passed this year, it will be by the narrowest of margins.
   
• There are numerous provisions contained in the proposed legislation. From pre-existing conditions to health care coverage for most Americans and Medicare revisions to income tax provisions, there are countless changes that will impact individuals, employers, insurance companies and health care providers. The public option, however, is one measure that has garnered significant attention and been at the forefront of much of the debate. Support for this item in the Senate is fading, but it squeaked by this week in the House bill. The administration and congressional leaders are determined to include this feature. The conference committee may attempt to create a new feature that might not be called a public option, but is similar and satisfies both sides’ goals.

It will be an interesting fall and perhaps winter, as final votes still may occur this year. In the end, some form of legislation will likely be produced. Too much time and political capital has been expensed not to have something enacted in 2009 or early 2010. Congressional leadership does not want to go through this process again or have it drag on until next year’s midterm elections. Stay Tuned.