So much attention has been paid to H.R.3200 and the Baucus bill that the HELP bill has been largely ignored.  Now this other Senate bill becomes very important.

This afternoon, Olympia Snowe (R-ME) crossed the aisle and helped get the Senate Finance Committee bill (Baucus Bill) passed by a 14-9 margin.  So now what?   The Baucus Bill will now be merged with the Senate Health, Education, Labor and Pensions (HELP) committee bill, otherwise known as the Affordable Health Choices Act.

HELP, is basically combines the parts of H.R.3200 with parts of the Finance committee bill.  The real purpose for this bill is probably to smooth things over in conference committee once the Senate successfully merges the Finance and HELP committee bills.  By merging HELP into the Finance bill, we get everything in the Baucus bill but would now have Medicaid for everyone that is at or below 150% times the federal poverty level – up from 133% in the Senate Finance and House Bills.  This increase would put a much larger burden on the States as Medicaid is a State-run program.  The exemption for small employers would be changed so that instead of bypassing businesses with 50 or fewer employees, any business with more than 25 would be required to pay for insurance or pay a penalty.    The most striking change is that it would put a public option into the Senate bill.  This public option is phrased very-similarly to the H.R.3200 language.

When we look at the plan from a cost perspective, there seems to be an instant 4% increase to premiums built into the State “gateway” exchange framework.  The gateway will be paid for by a 4% surcharge on premiums.  That means that health plans now have a 4% increase in administrative costs simply due to participating in the government exchange.  The cost of these exchanges is in every bill.  The HELP bill actually bothers to spell out how much they expect it to cost.  Of course, when health insurance companies are asked to pay for the government framework, you know who will that will be passed on to.

In the coming weeks, the Senate will work to merge these two bills so that a vote before the full Senate can be held.  If the composite bill passes the Senate, it will be taken to Conference Committee to be merged with H.R.3200 and that compromise bill will be voted on in both houses.  Upon passage in both houses, all that is left is Presidential signature.

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