Ten Things to Watch in the Health-Care Reform Conference

Schoolhouse Rock undersold the excruciating difficulty involved in making a bill a law. As the health-care reform process nears its merciful end, many important questions must still be decided, most of which have received only passing attention by the media.

If you only watch television news, you might think that the conferees tasked with merging the House and Senate bills really only need to work out the public option and the abortion provisions. The truth, though, is that those matters are pretty much settled. There will be no public option, and the Senate's incredibly restrictive language on abortion will probably win out over the appallingly restrictive House version.

There are oodles of provisions in both bills, but here is a quick guide to what else we should watch out for as the conference committee does its work. How these questions are settled will help determine just how good this reform will end up being:

Funding: This may be the stickiest difference between the two bills. The House version raises a substantial chunk of the needed revenue by imposing a 5.4 percent surtax on incomes over $500,000, or $1 million for couples. Meanwhile, the Senate bill raises revenue through an excise tax on "Cadillac plans." Many wonks believe the tax will put downward pressure on spending by making these expensive plans less appealing, but there's still concern that the tax could hit many middle-class people. The conference could just split the difference, implementing versions of both taxes.

The insurance exchange: Both bills create exchanges that offer coverage if you're not getting it from an employer or, in some cases, if you work for a small business. You'll have a menu of insurers to choose from, with clear information on how to make your decision. In order to participate, insurers will have to abide by strict regulations to keep them from abusing customers. The House proposes one national exchange, while the Senate wants 50 state-based exchanges. A national exchange is unquestionably better: It will offer greater efficiency, consistency, and choice. Improvements, like opening up the exchanges to midsize businesses, could be made more easily under the House version. A national plan would also give residents of stingier states with limited social-service benefits -- read, Republican ones -- access to the same quality of coverage as everyone else. If the conference chooses a national exchange, progressives should count it as an important victory.

The almost-public option: The Senate bill included a provision under which the federal Office of Personnel Management would oversee at least one national, nonprofit plan offered in the exchange. Details are sketchy, but if the plan is strengthened and comes to fruition, it could offer people part of what they wanted from a public option: the ability to select an insurer who does not exist to make profits. Since the House will be making a significant sacrifice by shelving the public option, look for it to demand a real alternative to for-profit insurance companies.

The start date: While many provisions of both bills take effect instantly, the most visible ones -- the creation of exchanges and the ban on denials for pre-existing conditions -- are delayed until 2013 in the House bill and 2014 in the Senate bill. This was done to lower the bill's 10-year cost and make sure savings and new taxes could cover all the new spending. But if you're someone suffering under the current system -- let's say, a cancer survivor whom insurance companies refuse to cover -- you could use help immediately, not three or four years from now. While 2013 is better than 2014, it would be even better if the exchanges were created sooner. Look for progressives to start campaigning to move up the implementation date in separate legislation soon.

Insurance subsidies : Both bills provide subsidies to buy health insurance for people who earn up to 400 percent of the poverty level ($43,320 for an individual, or $88,200 for a family of four). The lower your income, the higher your subsidy. The subsidies in the House bill, however, are more generous than those in the Senate bill.

Medicaid expansion: The Senate bill expands eligibility for Medicaid to those earning up to 133 percent of the federal poverty level ($29,326 for a family of four), opening it up to 12 million people. The House bill pegs eligibility at 150 percent of poverty ($33,075 for a family of four), covering 15 million. In either case, the law would end the incredible disparity between states, which presently set their own eligibility levels. If your family of four earns more than $2,535 a year and you live in Alabama, you're considered too rich to qualify for Medicaid. In Texas, it's a princely $2,866. Blue states, you'll be shocked to learn, already tend to have more generous benefits, meaning that the biggest winners from the expansion will be poor people represented by Republicans.

Insurance vouchers: Sen. Ron Wyden of Oregon spent years developing a health-care reform plan that would move us away from an employer-based system. While it got pushed aside this year, Wyden did get an amendment added to the Senate bill that would allow people greater choice in their health plans. Now, the status quo is that your employer chooses the insurer, and you choose one of a couple of plans offered by that insurer. The Wyden amendment would allow some people to take a voucher equal to what their employers cover, go to the exchange, and choose their own insurer. While it's currently limited to certain income levels, if the amendment survives the conference and then gets opened up to more people later on, it could have profound effects.

Immigrants: You might remember that when Rep. Joe Wilson of South Carolina yelled his eloquent cri de coeur "You lie!" at President Obama, he was objecting to Obama's assertion that undocumented immigrants would not receive the benefits of reform. To appease Wilson and xenophobes like him, the Senate not only forbids undocumented immigrants from getting low-income insurance subsidies, it even demands citizenship verification so that no undocumented immigrant could purchase insurance through the exchange with their own money (the House bill only does the former). But making everyone prove their citizenship before getting insurance is phenomenally stupid. We actually want as many undocumented immigrants as possible in the risk pool. Most are relatively young and will put in more to the system than they take out. When they do have a problem, they won't have to make emergency-room visits, which taxpayers cover.

Individual mandate enforcement: The simplest way to enforce the mandate is with a fine. Both bills require you to certify on your tax return that you have insurance, and if you check "no," you'll pay a penalty. Each bill has its own complex schedule of fines that change over the years of implementation and by income level, topping out at 2 percent to 2.5 percent of income. (Poor people are exempt and will already be eligible for free Medicaid coverage.) While conferees will have to sync up the two fine schedules, a better policy would be for them to adopt Paul Starr's idea of changing the enforcement mechanism so that "instead of paying a fine, [people] would forgo a potential benefit." If they didn't want to get insurance, they would have to sign over their rights to subsidies or the protection of the exchanges for a five-year period.

The Medicare commission: As we saw with the recent mammogram brouhaha, when politicians get involved in medical judgments, reason tends to get tossed out the window. That's why one of the most promising pieces of reform was an independent commission that would examine whether Medicare was getting what it paid for. The commission would make recommendations to Congress, which would have to accept or reject them without amendments. The effect could be substantial, because when better treatment methods are established within Medicare, improvements can spread to the entire health-care system. Unfortunately, though the Senate bill contained a version of the commission, it was rendered almost toothless, as Time's Karen Tumulty explained here. Neither the House nor the Senate is eager to give up its ability to tinker with Medicare, so if the commission provision is strengthened, it will be because the White House insisted upon it.

This is just a part of what remains to be decided. Every decision the conferees face will give them the opportunity to make reform better, faster, fairer, and more long-lasting. Let's hope they do their jobs well.

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