Congress Has New Health Policy

Published January 1, 2007

The 110th Congress will begin soon under the leadership of the Democrats, who gained the majority in both the Senate and the House last November. Although the midterm elections were driven largely by protests about Iraq and various scandals involving Republicans, the resulting Congressional changeover will mean changes in the legislature’s health policy priorities.

When House Speaker Nancy Pelosi (D-CA) named her party’s top seven priorities for the first 100 hours of the 110th Congress, two were health issues: changing the government’s way of setting prices for drug payments, and expanding stem cell research.

Here is a look at how the new Congress may challenge market-oriented health policy over the next two years.


Congress could retreat from considering a market approach to Medicare. The new prescription drug plan, Part D, has demonstrated the power of competition, with average premium prices expected to remain about the same through 2007.

However, Democrats believe allowing private companies to negotiate drug costs for the plans they offer seniors does not work. They want Uncle Sam to take over by having the federal government usurp private competition in setting the pricing for the prescription drug program.

Health Savings Accounts

Legislation already passed regarding health savings accounts (HSAs) may be in danger. Rep. Pete Stark (D-CA), the likely incoming chairman of the House Ways and Means Committee’s Subcommittee on Health, makes no bones about his opposition to HSAs.

During a September 26 Ways and Means Committee mark-up of a bill to expand HSAs, Stark said, “More and more of us will have to depend on the charity of strangers if HSAs take off. Why are we dedicating the few remaining hours of this Congress on a bill that does little more than provide a new billion-dollar tax shelter for the wealthy?”

In addition, Senate Finance Committee Chairman Max Baucus (D-MT) has expressed concerns about HSAs several times, saying they create adverse selection and could lead to high health insurance premiums and destabilization of employer-based plans.

Government-Run Universal Coverage

Democrats know health care affordability and access continue to register strongly with voters. A poll released on November 13 by America’s Health Insurance Plans, a national group representing about 1,300 insurers, found 80 percent of adults want Congress and state legislatures to do more to extend access to coverage.

Democrats want to heed that call for action, but they’ll focus on expanding government programs.

During a November 9 health policy discussion at a post-election forum hosted by Women in Government Relations held on Capitol Hill, Pat Bousliman, a staff member for Baucus, predicted “universal coverage would continue to be the goal and that we want to do it as efficiently and effectively as possible, and that will likely involve public programs.”

Common Ground

Free-market advocates could join Democrats in supporting some government expansion of federal “safety net” programs.

An example might be passing legislation to allow adults earning less than the federal poverty level to be eligible for Medicaid (currently, only disabled single adults are eligible). Most people recognize someone earning less than $9,800 a year is not really a candidate for private coverage–they need far more assistance than a partial health care tax credit or a voucher to afford premiums.

In addition, greater outreach to enroll those already eligible for federal programs is a point of common ground.

“Three-fourths of the 8.4 million uninsured children are eligible for the [State Children’s Health Insurance Program, SCHIP] but not enrolled,” Baucus reported in an August 2006 statement at a Finance Committee hearing on SCHIP. President George W. Bush’s 2007 budget proposals also included money for greater outreach to enroll children and parents in Medicaid and SCHIP.


But bipartisan agreement begins to break down as one moves up the income ladder of the uninsured, or into new eligibility categories where vouchers, health care tax credits, or other tax incentives are likely to work.

For example, SCHIP targets children whose parents earn too much for Medicaid, but it insures only the children. Democrats would like to expand SCHIP significantly by having it cover both parents and their kids.

It makes sense to have families covered under one policy. But why not do it by giving those families health care tax credits or vouchers to shop in the private market?

Another approach is to create something akin to the Medicare Advantage program, in which private insurance companies compete to be the prescription drug plan selected by seniors on Medicare. Private insurance carriers would offer plans to meet families’ varied needs, keeping parents and children on the same policy while the government helps them pay.

Pessimism or Gridlock

“Congress will seek to reverse the health care consumerism movement and cannot be dissuaded from that path,” predicted Jim Frogue, state project director at the Center for Health Transformation. “The action for the next two years will be in the private sector and in the states. That’s where market-based advocates should focus our efforts.”

One all-important focus for leaders of both parties will be creating and articulating winning health policy platforms for the 2008 presidential race.

Right now, it appears the Democrats believe voters want action, and that they will lose elections if voters think they have been “do-nothings” on reform. That may drive Democrats to seek middle-of-the-road compromises which, in turn, could give market policy advocates a small chance of getting small pieces of their policy goals into larger packages.

Laura Clay Trueman ([email protected]) is executive director of the Coalition for Affordable Health Coverage and senior director of Jefferson Government Relations, LLC.

For more information …

“Americans Urge New Congress to Focus on Health Care,” America’s Health Insurance Plans, November 13, 2006,

“Baucus Urges Greater Efforts to Insure Children,” U.S. Senate Committee on Finance, August 28, 2006,