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House-Senate Health Care Conference Begins In Earnest Tomorrow; PhRMA Deal Targeted

Henry Waxman, chair of the House Energy and Commerce Committee, announced at a constituent meeting today that he was headed to Washington tomorrow to begin discussions with Senate leaders and the White House, aimed at reconciling health care legislation to find a final bill which can pass both chambers of Congress. “The differences on the health bill will be hard to reconcile,” Waxman said to about 175 people at the Pacific Palisades Democratic Club. “But that’s our job.”

Discussions are beginning early on the health care bill, although the House is not returning to session until January 12, and the Senate not until a week later. This will not be a traditional conference committee, Waxman said, because the motions to select and instruct conferees in the Senate “would need 60 votes all over again.” Instead, whatever agreements made could be packaged in an amendment to the bills passed by the House and Senate.

While many observers expect the Senate bill to remain largely intact following the conference negotiations, Waxman vowed to fight hard on at least one issue: prescription drugs. “The President and the Senate made very poor deals with PhRMA,” Waxman said, explaining the deal whereby the drug industry offered $80 billion dollars in givebacks in exchange for their support for the overall bill. “Rahm (Emanuel) said that’s OK,” Waxman said, but he noted that under the deal, the industry would get millions of new customers and Americans would still pay far more than the rest of the industrialized world for prescription drugs.

“I have said that I am not bound by that agreement,” Waxman said, noting all the provisions in the House bill which go further than the PhRMA deal. He highlighted the “dual eligible” issue, where Republicans in the Medicare Part D benefit shifted millions eligible for prescription drugs on Medicaid and Medicare into the Part D program, giving billions of dollars in windfall profits to the industry because the Medicaid deal offers better prices for drugs. Waxman said that in the conference, where he expected the President to sit down personally, “I’m going to say, ‘Are we interested in protecting the profits of the drug companies or protecting seniors?'”

Waxman said that there would be no push to reimport drugs from other nations like the amendment offered in the Senate by Byron Dorgan, because the provision didn’t appear in either chambers’ bill.

Waxman, who called the health care bill passed by the House “an enormous step,” highlighted the delivery system reforms that would reduce the reliance on fee-for-service medicine. He said that he favored a public option that would compete with private insurers and hold down costs. But conservative Democrats “who say they’re for holding costs down, were not in this case.” He had “serious doubts” whether the final bill would keep the public option, but he did not commit to voting against the bill if it did not include the provision. “I would never vote against this health care bill if it did not have a public option,” Waxman said. “You can’t get everything you want, but you have to value what you get, and improve upon it as the years go on. Obama said he’d be the last President to work on getting health care reform. He won’t be the last one, even if he’s successful.”

Asked what would be available in place of the public option to put a check on private insurers, Waxman highlighted insurance regulations, such as the requirements that insurers spend a set amount on medical care, known as the medical loss ratio requirements. He noted the proposal in the Senate bill to set up nationwide plans managed by the Office of Personnel Management, saying he wanted to take a look at that. He even suggested that he would rather have the “trigger” provision favored by Olympia Snowe than no public option at all. Waxman hoped that Congress could revisit the issue at a later date.

I asked Rep. Waxman whether he was concerned about the insurance regulations being enforceable, since that enforcement would be outsourced to state regulatory frameworks that have had haphazard success. He did believe that using the House’s version of a national insurance exchange would be preferable to the Senate’s state-based exchanges, because it would allow for federal oversight and enforcement. “We could deny the insurers the possibility to use the exchange” if they don’t play by the rules, Waxman offered as an example. He said that money was in the House’s bill to operate the exchange, and that could also be used for enforcement, but he acknowledged that in both bills, state insurance regulators would still have a lot of the burden of enforcement. He promised to continue oversight in the Energy and Commerce Committee aimed at making sure the insurance industry would follow the law and live up to their obligations.

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David Dayen

David Dayen