Members of the Senate voted 60-39 at 7:16 a.m. today to pass H.R. 3590, the Patient Protection and Affordable Care Act bill.

All Democrats and independents in the Senate voted for the bill. All Republicans in the Senate except for Sen. Jim Bunning, R-Ky., voted against the bill.

House and Senate leaders now must find a way to reconcile the differences between their two very different health bills, either through a conference committee or some other mechanism.

Sen. Max Baucus, D-Mont., who oversaw the development of a Senate Finance Committee health bill, has said that preconference activities will begin immediately, and that Congress plans to have a final bill ready for President Obama to sign before Obama delivers the State of the Union address Jan. 20, 2010.

The Senate cleared the way for today’s unusual 7 a.m. vote Wednesday by agreeing to a final cloture motion, or limit on debate, to keep opponents from using endless rounds of debate to keep the bill from coming up for a vote. Supporters of H.R. 3590 needed 60 votes to get the cloture motion approved but only 50 votes to get the bill passed.

“The most obvious problem with the bill before us is that it doesn’t do what it’s supposed to do,” Senate Minority Leader Mitch McConnell, R-Ky., said today as the session began.

The bill would not lower costs, and Democratic leaders have had trouble getting Democrats to vote for it, McConnell said. “Otherwise, they wouldn’t be rushing it through Congresss on Christmas Eve,” he said. “The fight isn’t over. We will continue to work to keep it from becoming law.”

Senate Majority Leader Harry Reid, D-Nev., said the Congressional Budget Office has predicted the bill would save $132 billion over 10 years.

“Everyone knows” votes have taken place late at night and on Christmas Eve because “the Republicans wouldn’t allow us to have votes at any other time,” Reid said.

Because of the bill, “from this day forward, health insurance companies won’t be able to deny coverage because of existing disability,” Reid said. “We’re standing up to the greedy insurance companies that deny coverage to the sick.”

H.R. 3590 “is not the end of the process,” Reid said. “It is merely the beginning. But we must strive for progress, not surrender for want of purity. “

Reid created the 2,074-page original version of the PPACA bill by melding bills drafted by the Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee. A team of Democratic senators later drafted a 383-page manager’s amendment to win over over the Democratic skeptics whose votes were needed to win approval for the cloture motion.

If implemented as written, the PPACA bill would:

  • Require most individual Americans to own health insurance.
  • Create new health insurance subsidies for individuals and small businesses.
  • Require some employers that sponsor health plans to provide vouchers that employees could use to buy their own coverage.
  • Require health carriers to sell coverage on a guaranteed issue basis, and impose tight pricing restrictions.
  • Impose a new tax on health insurers.
  • Require health carriers to spend at least 85% of the premium revenue from large health groups, and 80% of the premium revenue from individual health policies and small groups, on medical expenses.
  • Set up a health insurance exchange system to help individuals and small groups get health insurance.
  • Set up a system of health plans supervised by the U.S. Office of Personnel Management and administered by private carriers.

In addition, the Congressional Budget Office says the bill would cut 2010 reimbursement rates for physicians who participate in Medicare 21%, rather than letting reimbursement rates rise 0.5%.

The Community Living Assistance Services and Supports Act, or CLASS Act, section of the bill would establish a voluntary, government-run long term care benefits program.

Many bill provisions would take effect several years after passage. The exchange system, for example, would not be up and running until 2014.

INDUSTRY GROUP REACTIONS

Karen Ignagni, president of America’s Health Insurance Plans, Washington, says AHIP continues to support the goal of providing all Americans with health coverage.

“Health plans support legislative changes that would provide guaranteed access to all Americans, with no pre-existing condition limitations and no health-status-based premiums, Ignagni says. “At the same time, specific provisions in this legislation will increase, rather than decrease, health care costs; reduce coverage options; and disrupt existing coverage for families, seniors and small businesses – particularly between now and when the legislation is fully implemented in 2014.”

Joel Kopperud, government relations director at the Council of Insurance Agents and Brokers, Washington, says CIAB views on the bill are still evolving.

“This legislation will establish completely new markets and practices for our community, and we’re still learning how we will work within the many confines established in the Senate bill,” Kopperud says.

CIAB members were relieved to see the Senate remove a provision that could have let the government set compensation rates for brokers who participate in the proposed exchange system, “but we are still concerned that the [medical] expense ratio remains too low for carriers,” Kopperud says.

John Greene, a vice president at the National Association of Health Underwriters, Arlington, Va., predicts that the subsidized exchange system would draw away more and more group plan members, “creating more demand for taxpayer dollars.”

“The medical loss ratio requirements during the transition period to 2014 will shrink the carrier market before we even get to the exchange, thereby limiting choice in the exchange,” he says. “Not all costs under MLR are bad. Disease management, wellness programs, claim adjudication and fraud and abuse detection are among the expenses under MLR.”

Diane Boyle, a vice president at the National Association of Insurance and Financial Advisors, Falls Church, Va., says Congress has to do more to address the issue of health care and health insurance affordability.

“The role of the agent is to negotiate the best policy rate for the customer, whether individual or business,” Boyle says. “Our goal in a bill is affordability, so that we could provide coverage to all Americans; if you are not addressing affordability, then there is a false promise to this entire effort.”

“The fact that CLASS Act provisions are in both bills is very disconcerting,” Boyle adds. “It is a new government entitlement, and it does not serve reform goals.”

But Boyle notes that the Senate kept a government-run “public option” plan out of the final version of its bill, and that the Senate bill is silent on any changes in the McCarran-Ferguson Act, which provides an antitrust exemption for health and medical liability insurers as well as for life and property-casualty insurers.

“The agents were definitely influential in ensuring that there is an explicit role for the agents, that they could get adequately compensated, and that the antitrust laws remain intact,” Boyle says. “We will push to have those provisions in a final bill.”

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For earlier H.R. 3590 coverage, please see: