Budget deal nixes centrist healthcare reform ideas

A deal on funding the government through the end of the fiscal year would roll back two centrist provisions that made it into the healthcare reform law after considerable debate.

The last-minute agreement reached Friday evening would cut $2.2 billion for healthcare co-operatives proposed as an alternative to a public option. The deal also strikes Sen. Ron Wyden's (D-Ore.) provision allowing some workers to forgo their employer's healthcare coverage and opt instead for a contribution to buy insurance on their own in state health insurance exchanges.

"Implementing the Affordable Care Act remains a top priority for this Administration and a central piece of our long-term deficit reduction strategy," an administration official told The Hill. "We said at the start of these negotiations that we would oppose any legislative efforts to defund implementation of Affordable Care Act -- and the final deal reflects that as the dozen riders to defund Affordable Care Act were eliminated. There are a few changes to health policy in the package, which were the product of a tough negotiation that required some give from both sides."

The so-called Free Choice Vouchers allow workers who make less than 400 percent of the Federal Poverty Level — the cut-off point for subsidies under Democrats' healthcare reform law — to get a voucher if their employer-sponsored coverage would cost them between 8 percent and 9.8 percent of their income. They would have cost the government $4 billion over a decade, starting in 2014 when the exchanges go live, according to the Congressional Budget Office.

Some employers opposed the provision out of concern that it could lead young, healthy workers to opt out of the employer plan, driving up costs for everybody else.

Wyden responded angrily Saturday in the Huffington Post.

"In my mind, that is a short-sighted position," he wrote. "The employer sponsored health insurance system is currently unsustainable. Premiums are going to keep going higher and higher burdening both employers and employees. Free Choice Vouchers offered a safety-net and a bridge to another system."

The budget deal also cuts $2.2 billion in 2011 funding for healthcare co-ops, but leaves $4.4 billion in 2012 funding intact.

Sen. Kent Conrad (D-N.D.) had proposed the co-ops as an alternative to a public option when it became clear during the healthcare reform debate that the Senate did not have the votes to create a Medicare-like government plan open to people younger than 65. Conrad's office did not respond to a request for comment Monday.

Liberals blasted the co-ops as unproven and insufficient.

"The proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs," CBO said during the debate, "because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments."