Health Care No Stranger To Reconciliation Process

To reconcile or not to reconcile — when it comes to a health overhaul bill, that seems to be the biggest argument of the moment.

At issue is a process called budget reconciliation. By writing Obama's health care plan as a budget bill, Democrats can prevent a Republican filibuster in the Senate and advance the bill with a simple majority instead of the 60-vote supermajority they no longer have.

Not surprisingly, that has Republicans crying foul. Budget reconciliation, Sen. John Kyl (R-AZ) told reporters Tuesday, "was never designed for a large, comprehensive piece of legislation such as health care, as you all know. It's a budget exercise, and that's why some refer to it as the 'nuclear option.'"

"The use of expedited reconciliation process to push through more dramatic changes to a health care bill of such size, scope and magnitude is unprecedented," Sen. Orrin Hatch (R-UT) wrote in a letter to President Obama on Monday, urging him to renounce the possibility of trying to pass a bill using the procedure.

But health care and reconciliation actually have a lengthy history. "In fact, the way in which virtually all of health reform, with very, very limited exceptions, has happened over the past 30 years has been the reconciliation process," says Sara Rosenbaum, who chairs the Department of Health Policy at George Washington University.

A History Of Reconciliation

For 30 years, major changes to health care laws have passed via the budget reconciliation process. Here are a few examples:

1982 — TEFRA: The Tax Equity and Fiscal Responsibility Act first opened Medicare to HMOs

1986 — COBRA: The Consolidated Omnibus Budget Reconciliation Act allowed people who were laid off to keep their health coverage, and stopped hospitals from dumping ER patients unable to pay for their care

1987 — OBRA '87: Added nursing home protection rules to Medicare and Medicaid, created no-fault vaccine injury compensation program

1989 — OBRA '89: Overhauled doctor payment system for Medicare, created new federal agency on research and quality of care

1990 — OBRA '90: Added cancer screenings to Medicare, required providers to notify patients about advance directives and living wills, expanded Medicaid to all kids living below poverty level, required drug companies to provide discounts to Medicaid

1993 — OBRA '93: created federal vaccine funding for all children

1996 — Welfare Reform: Separated Medicaid from welfare

1997 — BBA: The Balanced Budget Act created the state-federal childrens' health program called CHIP

2005 — DRA: The Deficit Reduction Act reduced Medicaid spending, allowed parents of disabled children to buy into Medicaid

For example, the law that lets people keep their employers' health insurance after they leave their jobs is called COBRA, not because it has anything to do with snakes, but because it was included as one fairly minor provision in a huge reconciliation bill, she says.

"The correct name is continuation benefits. And the only reason it's called COBRA is because it was contained in the Consolidated Omnibus Budget Reconciliation Act of 1985; and that is how we came up with the name COBRA," she says.

COBRA, which confusingly did not become law until 1986, was actually a much larger bill, including many nonhealth provisions and many other important health provisions as well (see chart). Among them was the so-called Emergency Medical Treatment and Active Labor Act (EMTALA), which requires hospitals that accept Medicare or Medicaid payments to at least screen patients who arrive for emergency treatment, regardless of their ability to pay.

Children's Health

But the budget reconciliation process has been used for more far-reaching health policy changes as well, says Rosenbaum. The expansion of health insurance coverage for low-income children is a prime example.

"In 1980, children who were living at less than half the poverty level in the United States could not get a Medicaid card in half the states if they had two parents at home," she says.

But via a series of budget reconciliation bills, beginning in 1984, Congress began expanding Medicaid coverage. In 1997, also in a budget reconciliation bill, it created the Children's Health Insurance Program, known as CHIP. Today, says Rosenbaum, who helped write many of the children's health provisions in those bills, Medicaid and CHIP together cover 1 in every 3 children in the United States.

"So literally we've changed everything about insurance coverage for children and families, and we've changed access to health care all across the United States all as a result of reconciliation," she says.

Medicare Changes

Budget reconciliation has also been an important tool for changing the Medicare program.

"Going back even close to 30 years, if you start say in 1982, the reconciliation bill that year added the hospice benefit, which is very important to people at the end of life," says Tricia Neuman, vice president and director of the Medicare Policy Project for the Kaiser Family Foundation.

Over the years, budget reconciliation bills added Medicare benefits for HMOs, for preventive care like cancer screenings; added protections for patients in nursing homes; and changed the way Medicare pays doctors and other health professionals.

Because the point of budget reconciliation was usually to cut the deficit, the huge Medicare program was nearly always on the chopping block. But there's another reason it became the bill of choice for other far-reaching changes.

"This happened primarily because it was the only train leaving the station, so if policymakers wanted to make a change in health policy, the only way to do it would be to amend a reconciliation bill, and that's really why it happened," says Neuman, a former congressional health policy staffer.

In fact, over the past three decades, the number of major health financing measures that were NOT passed via budget reconciliation can be counted on one hand. And one of those — the 1988 Medicare Catastrophic Coverage Act — was repealed the following year after a backlash by seniors who were asked to underwrite the measure themselves. So using the process to try to pass a health overhaul bill might not be easy. But it won't be unprecedented.

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