What Will Final Healthcare Reform Bill Look Like?

(MoneyWatch)  As the House and Senate Democrats "ping-pong" their healthcare reform bills, it appears that the House is willing to surrender the public option in its measure if insurance companies are held accountable in other ways. Meanwhile, President Obama said he wants the houses to reconcile their differences and pass a unified bill before the State of the Union address next month. And House Speaker Nancy Pelosi said the two sides are very close to an agreement.

What might the final legislation look like? To get some ideas on that, I went to Julius Hobson, a Washington consultant who used to be the chief lobbyist for the AMA. Here are some of his insights:

• The public option is off the table. "The Senate can't do a public option," Hobson notes, so the House will have to fall into line.
• There might be a compromise on financing. The Senate bill depends on an excise tax on so-called Cadillac plans, while the House would impose an additional tax on the wealthy. "On the Cadillac plans, raise the thresholds so the unions aren't hit," suggests Cave. Then make up the difference by taxing the rich, but at a lower rate than in the House bill.
• Penalties for not buying coverage will be stronger. Hobson believes that the stiffer penalties in the House bill will be added to the Senate measure so that people will get coverage and form the widest possible risk pool, thereby holding down insurance rates.
• Medicaid expansion will be pushed back a couple of years. While seeing the need for this provision to cover lower-income people, Hobson notes that the states are reeling from the recession right now. So he thinks Congress will give them time to recover before socking them with higher Medicaid costs.
• The final legislation will lower the deficit. Right now, the Senate bill does, but the House bill doesn't. However, notes Hobson, "The President has said he won't sign anything that raises the deficit. So the bill has to be scored by CBO as lowering the deficit."

The waters are murkier with regard to the proposed "doc fix," which would restore the Medicare cuts that physicians are due to receive under current law. The House passed a bill providing nearly $200 million for physicians over 10 years. (This is known on the Hill as a "permanent fix.") But the Senate couldn't even get 50 votes for cloture on the permanent fix last year. To get AMA backing for his reform package, Senate Majority Leader Harry Reid deleted the "temporary fix" in the bill and promised to revisit the topic in January. Meanwhile, the cuts were postponed until the end of February in a rider on unrelated legislation.

At this point, Hobson says, he believes the conferees will kick the ball down the road again by putting the temporary fix back in the bill so it will pass the Senate. But he also suspects there will be some arrangement to change how physicians are reimbursed, perhaps along pay-for-value lines.

So there it is, the good, the bad, and the mediocre: We'll soon know what kind of sausage our Congress made. But one thing we can be sure of: it will be sausage.