Kerry Urges Affordability Measure Included in Merged Health Bill

[ProSense]

Kerry Urges Affordability Measure Included in Merged Health Bill

Kerry Proposal Builds on Successful Best Practices in Massachusetts Health Care Reform

CONTACT: DC Press Office, 202-224-4159

WASHINGTON, D.C. – Senator John Kerry (D-Mass.), a senior member of the Finance Committee, has written Senate Majority Leader Harry Reid (D-Nev.) requesting Kerry’s proposal to provide affordable insurance plans for the middle class be included in the health reform legislation that comes to the senate floor.

Kerry’s plan, often referred to as “prudent purchasing,” would allow state-run health insurance marketplaces to negotiate with private insurance companies to select the best, most affordable options for consumers.

“Every day we read about the importance of bending the cost curve in health care reform, and this idea actually helps make it happen. We know prudent purchasing works because it’s working in Massachusetts. It will control costs while providing middle class workers with the affordable health care options they desperately need,” said Sen. Kerry. “We’ve seen firsthand the powerful impacts this has on families in Massachusetts, and I know we can bring those same results to the rest of the country.”

The full text of the letter is below:

The Honorable Harry Reid
Majority Leader
United States Senate
S-221, The Capitol
Washington, D.C. 20510

Dear Majority Leader Reid:

As you put together health care reform legislation, I ask for your help to include my prudent purchasing provision in the merged bill. I offered this provision during the Senate Finance Committee’s consideration of health care reform because I believe it will lower costs and increase affordable options for consumers.

The Finance Committee bill requires the exchange to accept all licensed health plans, regardless of the plan’s ability to deliver competitive prices or offer high quality care. Chairman Baucus agreed to work with me on the proposal so I withdrew the amendment from consideration.

Under my amendment, and a similar provision that was included in the House-passed bill, exchanges would negotiate with plans for lower bids, encourage plans to form select networks, and exclude plans that do not offer good value and cost-effectiveness. Negotiating with health plans is already a common practice for other large purchasers. The federal government negotiates with plans participating in the Federal Employee Health Benefits Plan and large employers negotiate with the health plans they offer their workers.

One of the key ingredients to the success of health reform in Massachusetts is the ability of the Connector to negotiate with health plans. This negotiation process saves six percent off the cost of premiums and places pressure on carriers to keep rates increases low overall. Empowering exchanges to engage in active purchasing would lower premiums for all enrollees in the exchange, as well as, lower the amount of subsidy paid by the federal government.

My proposal also encourages the participation of Medicaid Managed Care Organizations (MMCOs) in the exchange. These plans have a proven experience serving low-income enrollees and are less expensive than nonprofit and commercial plans. Massachusetts uses MMCOs to serve all subsidized enrollees in the Commonwealth Care portion of the exchange.

I respectfully request that you include my amendment in the merged health reform bill. It provides us with a tangible way to control the long-term growth of health care costs while ensuring that families have access to affordable coverage options.


Sincerely,


John F. Kerry

[ProSense]

1. Background

Stocked Exchange

Did the Senate just kill a crucial ingredient of health care reform?

Ten years from now, if health care reform is a boondoggle, you might be able to trace that failure back to a decision in the wee hours of last week's Senate Finance Committee hearings.

It happened on Thursday night, just before midnight, when John Kerry put forward an amendment. It was amendment C-8: "Empowering State Exchanges to be Prudent Purchasers." The title may sound innocuous, if a bit arcane. But if you've followed the health care reform debate, then you know (or should know) that anything involving the insurance exchanges is important.

And Kerry's amendment is very important.

<...>

But when Kerry introduced his plan last week, he couldn't get the votes to pass it. The reason, several sources on Capitol Hill say, was opposition from Olympia Snowe, the Maine Republican who also sits on Senate Finance. Snowe seems to be concerned that a more aggressive exchange would amount to more government--which, in fact, it would be. But, as Massachusetts has shown, sometimes more government is exactly what health care needs.

Chances are reasonably good that Kerry's vision of reform will prevail, if not during the Senate floor debate then afterwards, when a conference committee merges whatever passes from the two congressional chambers. But it's not a sure thing, which is why this seemingly narrow question deserves a lot more attention.

more

[karynnj]

2. When this was discussed, it really sounded like an idea no one

could reject - especially as he said it saved MA $13 million. Baucus told him it couldn't be voted on because it did not have a CBO cost. Kerry told him that it was not a cost, but a benefit and that the amendment had been submitted weeks ago.

[MH1]

3. About what one would expect from Baucus.

:banghead: