Podcast: Understanding the Senate Health Reform Bill

In this podcast, we will discuss the health reform bill currently being debated by the Senate. I’m Shannon Spillane and the Center’s Senior Health Fellow, Judy Solomon, is joining us today.

1. Judy, in a recent podcast, we talked about a health reform bill passed by the House. Now, it’s the Senate’s turn and they are currently debating a bill of their own. Can you tell us exactly what it would it do and how many Americans it would help?

A: Sure, Shannon. It’s a major step toward comprehensive health reform.

It would extend health insurance coverage to 31 million Americans who are uninsured, reduce the federal budget deficit, and it would put in place policies to slow the growth of health care costs.

2. We hear a lot in the news and from policymakers about slowing the growth of health care costs. What does that really mean?

A: There’s lots of confusion about this. I think it’s easiest to explain with an example or two.

Let’s take drug prices. The Senate bill would change how prices for prescription drugs are calculated in the Medicaid program. This change will cut the price the government pays for prescriptions for people who are enrolled in Medicaid Overall, these costs likely will still go up each year – as they would under the current system -- because of inflation and other factors. But, the change in how prices are calculated that’s in the Senate bill, means they wouldn’t rise as quickly.

3. How about one more example of a provision that slows the growth of health care costs?

A: Sure. Another example is the bill’s tax on very high-cost health insurance plans. This tax would discourage insurers from offering overly generous health insurance coverage that encourages people from using excess, or even unnecessary, health care services – for example, like using a more expensive brand-name drug when a generic drug would be just as effective. It’s important to note that the vast majority of health plans would be not be affected by the tax.

4. On a related note, you mentioned that the bill would reduce the budget deficit. By how much?

A: The bill would cut the deficit by an estimated 130 billion dollars over the next ten years. And, it would also cut the deficit in the decade after that.

5. So, we’re looking at a bill that expands coverage to millions while reducing the federal budget deficit in the short and long term. That sounds good. Are there areas where the Senate bill doesn’t measure up to the House version?

A: The House bill does come out ahead in a few ways. Most importantly, it does a better job of making health coverage affordable for struggling families.

6. Tell me a little bit more about this affordability issue.

A: Sure, Shannon. Both bills would provide subsidies for low- and moderate-income families who don’t get insurance through their jobs and have trouble affording it on their own. The subsidies would work on a sliding scale, which means, that the lower a family’s income is, the more help the family would get.

The problem is that the Senate bill doesn’t give enough help to families at the lower end of the subsidy scale.

For example, a family of three that has an income of about $27,000 a year would have to pay $1,250 for premiums, over $400 more than that same family would pay under the House bill.

Many families with incomes this low already struggle to pay the rent and put food on the table. They could have difficulty paying this much for health coverage.

7. That sounds like a difference that will need to be addressed as the process continues. Speaking of the process, this has already been a long road. What’s next?

A: The Senate’s going to debate its bill for several weeks. Once the bill passes, the House and Senate will then have to iron out differences between the two bills and pass a final version for the President to sign.

They should do this as quickly as possible, because both bills represent a dramatic improvement over the current health insurance system.

Thanks, Judy. To learn more about the health reform debate, visit the Center’s website at CenteronBudget.org