Podcast: Reconciliation and Health Reform

In this podcast, we will discuss a legislative tool called “reconciliation” and its role in health care reform. I’m Shannon Spillane and I’m joined by Paul Van de Water, a Senior Fellow at the Center.

1.    Paul, reconciliation has gotten a lot of attention lately in relation to the health reform debate.  Can you please explain briefly what reconciliation is and how it works?

Of course, Shannon.  The Reconciliation process allows for expedited consideration of certain kinds of legislation. In particular, it prevents a minority of senators from thwarting the will of the majority by endlessly blocking a Senate vote on legislation that most members of the House and Senate support.

2.     How would it be used in the health reform process?

In this case, reconciliation would be used to make a limited number of changes to the spending and tax policies in the health reform bill that the Senate already passed in late December. 

3.    Some opponents of health reform claim that using it in this way would be a misuse of reconciliation or would be unprecedented.  Is that the case? 

No, it isn’t.  Some opponents of health reform claim that reconciliation has never been used for major policy changes.  That’s just false.

For example, a Republican Congress used reconciliation for the sweeping welfare reform legislation it enacted in 1996. 

Congress also used reconciliation to pass the 2001 and 2003 Bush tax cuts.

4.    Has reconciliation ever been used for health legislation?

Yes, it has.  Congress has used reconciliation to establish entirely new health coverage programs and to substantially expand existing ones. 

For example, Congress used reconciliation in 1997 to create the Children’s Health Insurance Program, which now provides subsidized coverage to 7 million children.

And in 1986, Congress used reconciliation to establish new rules that allow workers who leave a job with health insurance to remain enrolled in their employer’s health plan for a period of time if the worker pays the premiums.  That’s now known as COBRA and the “R” in COBRA actually stands for reconciliation!

5.    Is it true that any bill passed through reconciliation cannot add to the deficit?

Yes, that’s true.  In 2007, the House and Senate adopted rules preventing Congress from using reconciliation to increase deficits and debt, as had been done with the passage of the Bush tax cuts in 2001 and 2003.

If health reform is enacted in part through use of the reconciliation process, the reconciliation legislation will have to be designed so it does not add to the deficit.  

This shouldn’t be a problem because both the House and Senate health reform bills that passed last year would reduce the deficit. 

In fact, since rising health care costs are the largest single reason for projected long-run deficits, and health reform is designed to bring these costs under control, it’s entirely appropriate that health reform be considered through reconciliation.

6.    So what’s the bottom line, Paul?

Congress should move forward with the reconciliation process so that we can finally achieve health reform that one: expands coverage for millions of uninsured Americans, two: brings needed reforms to the health insurance market, and three: reins in health care costs.

Thank you, Paul, for joining us.