Legislation & Politics

Week Ending September 18, 2009

Senate Finance Committee to Consider Health Care Bill Next Week

On Wednesday, Senator Max Baucus (D-MT), Chair of the Senate Finance Committee, released his proposed health care reform bill and announced that the committee would debate it next week.  President McEntee has stated:  "The bill is deeply flawed.  It fails to provide good, affordable coverage and does not protect families from medical bankruptcy."  Wendell Potter, a retired insurance company executive, criticized the bill stating that it is a "gift" to the insurance industry.

There are a number of problems with the bill, as highlighted below:

  • Taxes High-Cost Health Plans.  The bill would impose a tax on high-cost health plans.  This will force cuts in benefits and more cost shifting to workers.  This provision makes a lie out of the promise that people will be able to keep the coverage they have. 
  • Almost No Employer Responsibility.   There is no requirement that employers provide coverage or pay into a fund so their workers can get a subsidy in order to purchase coverage for themselves.  The only requirement on employers is that they pay up to $400 a year for any worker who gets a subsidy.  The bill must be changed to require employers to provide coverage or pay their fair share for our health care system.  Otherwise, more of the costs will be borne by families and government. 
  • Shifts Medicaid Costs to the States.  The Baucus bill shifts increased Medicaid costs to the states.  AFSCME supports expanding Medicaid coverage to more low-income people.  But state budgets are already stretched to the limit by their current Medicaid costs and other budget demands.  The cost of the Medicaid expansion should be shouldered by the federal government.
  • Co-ops Rather than a Public Plan.  The bill fails to include a public health insurance option as is included in the House bills and in the Senate Health, Education, Labor and Pensions (HELP) bill.  Instead, it would establish state and regionally based co-ops.  These small, nonprofit insurance plans will have very little market clout and no ability to drive changes in the market that will lead to lower costs overall.  A robust public health insurance option is needed to lower costs, keep the insurance industry honest and give families a new choice.    

 

We Need Your Help to Fix the Bill

AFSCME is working with our allies on the committee to fix this bill.  But we are at a critical juncture and need your help.  If you are from any of the following states with a senator on the Finance Committee, please call your Senator today at 202-224-3121.  Tell your Senator that the bill is unacceptable and that he/she must fix it.  Tell your Senator that high-cost plans must not be taxed; employers must share fairly in the cost of our health care system; that the federal government must not shift Medicaid costs to the states; and that we must have a public health insurance option.

Blanche Lincoln, AR    
Kent Conrad, ND
Thomas Carper, DE    
Robert Menendez, NJ
Bill Nelson, FL    
Jeff Bingaman, NM
John Kerry, MA    
Charles Schumer, NY
Olympia Snowe, ME    
Ron Wyden, OR
Debbie Stabenow, MI    
Maria Cantwell, WA
Max Baucus (Chair), MT   
John Rockefeller, WV

Projected Premium Increases Underscore Need for Health Care Reform Now

As Congress debates the shape of health care reform, the 2009 Employer Health Benefits Survey, released by the Kaiser Family Foundation and the Health Research & Educational Trust, found that the average premiums for employer-sponsored health coverage rose to $13,375 annually for family coverage.  Since 1999, premiums have soared 131%, far more than workers' wages.  If premium hikes continue to increase as they did over the last 10 years, by 2019 the average family premium will be $30,803.  The survey found that workers are paying more of the costs for less coverage.  Among firms offering benefits, 21% reported reducing the scope of health benefits or increasing the cost sharing, and 15% reported increasing the worker's share of the premium.   Retiree coverage has also declined, with only 29% of large employers offering retiree benefits, compared to 66% who did in 1988.  These numbers and trends highlight the urgent need for health care reform to help average Americans afford health care coverage. 

Senate Finance Committee Holds Hearing on Extending Unemployment Benefits

The Senate Finance Committee took a short break from health care reform to hold a hearing on proposals to extend unemployment insurance (UI) benefits.  Over 600,000 workers currently in the Emergency Unemployment Compensation program (part of the American Recovery and Reinvestment Act) are expected to run out of their benefits by the end of September without finding jobs.  Legislation has been introduced in both the House and Senate to provide additional weeks of benefits for them, and we expect Congress to act within the next several weeks to approve additional benefit weeks for those exhausting their benefits.

In addition, Rep. Jim McDermott (D-WA), Chairman of the House Ways and Means Income Security and Family Support Subcommittee, has introduced legislation to extend the entire Emergency Unemployment Compensation program, which is scheduled to expire at the end of December.  We expect this legislation will be considered later this fall.  

House Student Loan Reform, Early Childhood and Community College Bill Passes

This week, the Student Aid and Fiscal Responsibility Act of 2009 (H.R. 3221) passed the House 253-171, largely along party lines.  This bill encompasses student loan reform, creates a new early childhood program (Early Learning Challenge Grants), and a new program of assistance to community colleges.  The bill would eliminate new loans through the Federal Family Education Loan Program (FFELP) and shift to government originated direct loans, with cost savings projected at nearly $100 billion. Pell Grants would increase annually based on the rate of inflation.  Several provisions were added, at AFSCME's urging, to protect services provided by state student loan guarantee agencies.

The bill also includes a $3 billion College Access and Completion Fund for programs that focus on increasing financial literacy and helping retain and graduate students.

Early Learning Challenge Grants would invest $1 billion a year for eight years in competitive grants to states to build a comprehensive, high quality early learning system for children from birth to age five. This would not depend on annual funding from Congress. The goals are to build an effective, qualified and well-compensated early childhood workforce, apply best practices in the classroom, promote family involvement, and fund quality initiatives and reform.

The legislation sets up a new initiative which includes competitive grants for community colleges to improve instruction, work with local employers, improve their student support services, and implement other innovative reforms.  At AFSCME's urging, the bill requires that grant applications, which will be reviewed by the Departments of Labor and Education, demonstrate how the community colleges and states intend to partner with the state public employment service.  The legislation also calls for partnerships with the state or local Workforce Investment Act (WIA) workforce boards.  A $2.5 billion fund will be made available to leverage additional funds to upgrade aging facilities on community college campuses.

These initiatives are key priorities for the Obama Administration. The Senate may take action on the bill later this month. The federal budget allows for student loan reform to pass in the Senate with a simple 51-vote majority.

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