Senate finance amends reform bill to allow states to negotiate with insurers

The Senate Finance Committee approved a handful of amendments aimed at cutting costs for consumers — although some disagree that that's what the changes will do — in its health care reform bill Thursday.

• An amendment by Sen. Maria Cantwell, D-Wash., passed that would give states the power to negotiate with insurers on rates for low-income residents enrolled in a public-option-like state-based exchange.
  
  The Hill: "Under the Cantwell amendment, people with incomes between 133 percent and 200 percent of the federal poverty level who do not get insurance at work would enroll in these state-based programs. The federal tax credits that would otherwise have been given to those individuals would instead be paid to states to finance the plan. Cantwell based her amendment on a program in Washington state" (Young, 10/1).
  
  CongressDaily: "Baucus expects the amendment would save money, though it has not been scored by CBO. Subsidies for those who choose the basic health plan would go to states rather than insurance companies" (Edney, 10/2).
• Senators also voted to curb insurance executive pay, The Wall Street Journal reports: "Voting 14-8, the committee approved an amendment that would limit the tax deductibility of compensation for insurance executives to $500,000 a year. The limit would apply to executives at companies that get significant business generated by the bill's mandate that nearly all Americans must have insurance. Under current law, businesses can deduct up to $1 million a year in compensation for executives" (Hitt and Adamy, 10/2).
• They also voted to exempt 2 million people from the mandate to buy insurance because it would be a financial hardship — more than 8 percent of their income — and reduced or delayed penalties for others who don't purchase insurance, The New York Times reports. Republican Sen. Olympia Snowe, of Maine, "and Senator Charles E. Schumer, Democrat of New York, offered an amendment to reduce the penalty and to introduce it gradually. Under their proposal, the maximum penalty for a family would start at $200 in 2014 and rise to $800 in 2017." The amendment also eliminated the possibility of criminal penalties for not carrying insurance (Pear and Calmes, 10/1). In an earlier story, The New York Times reports that Snowe got Democrats to shelve an earlier Schumer amendment that wasn't as generous on easing the penalty (Calmes, 10/1).
  
  The panel defeated an amendment offered by Sen. Mike Crapo, of Idaho, which would have exempted from fees those making less than $200,000 a year and families making less than $250,000 a year, The Associated Press reports (Werner, 10/1).
  
  Republicans are upset by what they see as an undue tax increase, The New York Times reports in a second story: "The tax increases Republicans point to include a proposed surcharge on households making over $350,000 a year, contained in a version of the bill in the House; reductions in the medical-cost tax deductions being considered by the Senate Finance Committee; and a tax on expensive health care plans under consideration in both chambers" (Nagourney and Herszenhorn, 10/1).
  
• Sen. John Ensign passed an amendment that offers discounts to people on insurance who quit smoking or lose weight, The Las Vegas Sun reports (Mascaro, 10/1).