Senate Health Bill Amendment Hard On Doctors, Tanning Centers

– Increase the penalty for individuals who don’t have health insurance. (Section 10106(b))

Government Health Finance Administration Provisions

These would:

– Authorize the secretary of Health and Human Services to award demonstration grants to states that want to develop new approaches to handling medical malpractice claims. The original version of the Reid health bill includes only a provision stating that the Senate thinks something ought to be done about medical malpractice insurance costs. (Section 10607)

– Replace the original Reid bill proposal for creating a “public option” health plan run by the U.S. Department of Health and Human Services with a collection of multi-state plans that would be administered by the U.S. Office of Personnel Management. (Section 1334)

– Set rules for abortion coverage. (Section 1303)

– Call for the secretary of Health and Human Services to develop a methodology for assessing health plan value. (Section 10329)

– Require the secretary of Health and Human Services to work with the secretary of Labor to collect data on self-insured plans and large group plans, and to analyze “the extent to which self-insured group health plans can offer less costly coverage and, if so, whether lower costs are due to more efficient plan administration and lower overhead or to the denial of claims and the offering [of] very limited benefit packages.” (Sections 1253 and 1254)

General Tax Provisions

These would:

- Increase the proposed hospital insurance payroll tax to 0.9%, from 0.5%. (The tax would apply to individuals with incomes over $200,000 and families with incomes over $250,000.) (Section 10906)

– Eliminate a proposed 5% excise tax on cosmetic surgery, and add a 10% excise tax on indoor tanning services. (Section 10907)

BUDGET ANALYSTS WEIGH IN

The CBO estimates the manager’s amendment to H.R. 3590, also known as the Reid-Baucus-Dodd-Harkin amendment, or Senate Amendment 3276, would save about $2 billion during the 10-year period starting in 2010, and that the annual level of savings would grow over time.

But CBO Douglas Elmendorf notes in a letter summarizing the work of analysts at the CBO and the congressional Joint Committee on Taxation that the estimate depends on the assumption that the government would implement the amendment provisions as written.

“For example,” Elmendorf writes, “the sustainable growth rate … mechanism
governing Medicare’s payments to physicians has frequently been modified (either
through legislation or administrative action) to avoid reductions in those payments, and
legislation to do so again is currently under consideration in the Congress.”

The manager’s amendment probably would increase government outlays by $10 billion and increase government revenue by about $12 billion, with increased penalty revenue accounting for about $7 billion of the revenue increase, the CBO predicts.