AFSCME LEGISLATIVE REPORT

October 2, 2009

Below are the top stories of the week from Capitol Hill. 

v Senate Finance Committee Completes Debate of Amendments to Health Reform Bill

v House Democrats Launch Effort to Oppose Excise Tax on Health Plans

v Government Shutdown Averted with Passage of Stopgap Spending Bill

v States Face Major Cuts in Highway Funds

v Hospital Bed Capacity Could be Exhausted if 35% of Americans Get H1N1

v Recovery Act Funds Continue to Provide Fiscal Relief to States and Localities

Senate Finance Committe Completes Debate of Amendments to Health Reform Bill

Early Friday morning, the Senate Finance Committee finished its debate of amendments to health reform legislation.  The committee is postponing a final vote on the bill until it receives a preliminary report from the Congressional Budget Office on how the spending and revenue items in the bill add up.  However, the process for merging the Finance Committee bill and the better bill reported by the Health, Education, Labor and Pensions (HELP) Committee will begin immediately.  The merged bill is what the Senate will ultimately debate, beginning as early as the week of October 12.

Since our report last week, the excise tax on health plans has been improved, but has not been fixed.  Under the original bill, an excise tax of 35% would be applied to health plans that exceed a cost of $8,000 for individual coverage and $21,000 for family coverage in the year 2013.  During the course of debate, this was modified more than once.  The bill completed this morning would increase the cost threshold for family coverage to $26,000 for retirees and workers in certain high-risk occupations.  A higher threshold would also apply temporarily to all plans in 17 high-cost states.  Thresholds would be indexed to the Consumer Price Index plus 1%, so that they would rise over time.  However, the amount of increase each year will not equal the increase in premiums.  So, over time, more and more plans will be taxed and more and more workers will face cuts in benefits or demands for more cost sharing.  The tax rate was also increased to 40%.  AFSCME and the entire labor movement is working with the White House and champions in the Senate to raise the threshold amounts during the merging of the Finance and HELP Committee bills.

There was also an improvement made to the Medicaid section of the bill through an amendment agreed to Thursday night.  The bill would have required states to continue, until 2014, eligibility standards established under the stimulus bill and set to expire at the end of 2010.  The amendment to the bill eliminated the extended maintenance of effort requirement on states.

There was also a debate on two amendments to add a public health insurance option to the bill.  The stronger version of the public plan was offered by Senator John Rockefeller (D-WV).  It was defeated by a vote of 8 to 15.  A less robust version of the public plan was offered by Senator Charles Schumer (D-NY) and was defeated by a vote of 10 to 13.  Three Democrats voted with Republicans to defeat the Schumer amendment – Senators Max Baucus (MT), Kent Conrad (ND) and Blanche Lincoln (AR).  Democrats who voted in favor of the amendment were:  Senators Schumer and Rockefeller, Robert Menendez (NJ), Debbie Stabenow (MI), John Kerry (MA), Bill Nelson (FL), Tom Carper (DE), Maria Cantwell (WA), Jeff Bingaman (NM), and Ron Wyden (OR).  While the amendment failed, the fact that it received such strong support from Democrats on the committee helps lay the groundwork for including a public option in the merged bill.

During the course of debate, a number of amendments were discussed but withdrawn without a vote in order to avoid defeat.  This included an amendment to add an employer “pay or play” provision and another to prevent cuts in disproportionate share hospital (DSH) payments to safety net hospitals.

(Barbara Coufal- bcoufal@afscme.org)

House Democrats Launch Effort to Oppose Excise Tax on Health Plans

More than 100 U.S. House Representatives have agreed to sign a letter to House Speaker Nancy Pelosi (D-CT) in opposition to an excise tax on high cost health insurance plans, like the one proposed by Sen. Baucus in the Senate Finance Committee’s health care bill.  The letter to Speaker Pelosi states, “we urge you to continue to reject proposals to enact an excise tax on high cost insurance plans that could be potentially passed on to middle class families.”  Stopping this tax on working families’ health plans is a top priority for America’s labor unions.  AFSCME, the AFL-CIO, and dozens of other labor unions strongly oppose this excise tax and have launched a massive campaign to ensure all representatives sign this letter.

Sen. Baucus’ proposed excise tax would impose a 40% tax on millions of workers’ health care benefits.  After the tax starts, in each subsequent year it would hit millions of additional families.  The tax unfairly shifts health costs to workers either by forcing them to pay nearly 40% higher premiums for current benefit levels or increasing their out of pocket expenditures for health needs. 

(Marc Granowitter- mgranowitter@afscme.org)

 What You Can DO

AFSCME Activists:  Pick up the phone now and call 202-224-3121

and urge your member of Congress to sign Rep. Courtney's letter

opposing a tax on health plans.

Government Shutdown Averted with Passage of Stopgap Spending Bill

The Senate approved a Continuing Resolution (CR) that keeps the federal government operating into the new fiscal year, which started October 1, giving legislators time to finish work on regular, annual funding bills.  So far, none of the 12 annual bills have been signed into law this year. The CR would keep most programs operating at last year’s levels through October 31, with the exception of a $3.85 billion increase for the Veterans Health Administration. In addition, the bill extended the nation’s highway, transit and safety programs for one month after an effort to extend surface transportation programs for three months and to restore an $8.7 billion budget cut failed. The CR was adopted in the Senate by a vote of 62-38, as part of another spending bill conference agreement. The House passed the measure, 217-190, on September 25. 

(Ed Jayne- ejayne@afscme.org)

States Face Major Cuts in Highway Funds

States are scheduled to lose $8.7 billion in federal funds if Congress does not act soon to repeal language from the 2005 surface transportation authorization bill.  If Congress does not act, states face losing hundreds of millions of dollars they had planned to use for highway projects that produce jobs.  These cuts would essentially eliminate the progress made by the economic stimulus funding.

A bipartisan agreement not to restore the $8.7 billion which was cut under the Bush Administration was reached in the Senate Environmental and Public Works Committee.  Republicans on the Senate floor prevented the three-month extension bill from moving forward and instead only transit and safety programs were extended for just one month.  The House approved a three-month extension of current surface transportation law on September 23, but the bill did not address the funding restoration. 

(Cynthia Bradley- cbradley@afscme.org)

Hospital Bed Capacity Could be Exhausted if 35% of Americans Get H1N1

A report issued by the Trust for America's Health finds 15 states (Arizona, California, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia and Washington) could run out of available hospital beds during an H1N1 flu virus outbreak if 35% of Americans were to get sick.  The report estimations are based on a FluSurge model developed by the U.S. Centers for Disease Control and Prevention (CDC).  Another 12 states could reach or exceed 75% of their hospital capacity.  Among the report’s recommendations are: encouraging health plans to waive co-payments for H1N1 vaccines and ensuring that health care providers follow U.S. Occupational Safety and Health Administration guidance on protecting health care personnel.  The report is found at: http://healthyamericans.org/newsroom.releases/?releaseid=193,

(Linda Bennett- lbennett@afscme.org)

Recovery Act Funds Continue to Provide Fiscal Relief to States and Localities

A Government Accountability Office (GAO) report reviewing 16 states and the District of Columbia found that as of September 11, $48 billion of the estimated $49 billion in FY 2009 funds has been sent to states and localities.  Nationally, states and the District of Columbia have drawn down $30 billion additional federal Medicaid funds. These funds, which are the result of  the AFSCME supported American Recovery and Reinvestment Act (Recovery Act) championed by President Obama, are vital to preventing even deeper budget shortfalls and cuts.  The GAO reported that surveyed states saw Medicaid enrollment increase by 10.4%; however some states like Ohio saw Medicaid rolls increase by nearly 25%.  The GAO found that states were concerned that in FY 2010 the amount of additional federal support would not be sufficient to maintain Medicaid programs and close budget shortfalls.   Nearly all states were concerned with the “cliff” – the loss of increased Medicaid funds when the Recovery Act ends in December 2010.   The GAO report is found at: http://www.gao.gov.new.items/do91016.pdf 

(Linda Bennett- lbennett@afscme.org)

Click here to join the AFSCME e-Activist Network.