JANUARY 13, 2010: With the passage of the Senate's version of health care reform, attention is now focused on the final and most important step of the legislative process - reconciliation of the House/Senate versions before a conference committee. When a bill emerges from this closed-door process, it cannot be amended and must receive a straight up or down vote in each chamber. If passed, it then goes to President Obama for final approval.

As members know, our Association has yet to take an official position on the House or Senate version of heath care reform. While there are certainly areas of national health care policy that need reform, too many important questions remain unanswered for Association leaders to comfortably endorse a bill.

"This is one of the most important issues facing retirees and we are going to do what is in the best interests of our members. We are trying to get at the details of what is being proposed," said Association President Ralph White. "Serious concerns remain with our members concerning potential changes to Medicare, along with the taxation of so-called "Cadillac" insurance plans."

It has been reported that Congress is eying nearly $400 billion in cost savings from the Medicare program over the next decade. While some may describe the savings as resulting from running the program more efficiently, others are concerned that cuts to the program and benefits may occur.

"The devil is in the details, and reductions in Medicare benefit levels or reimbursements to health care providers could result in higher costs under the Medicare supplement plans, such as the state's Optional Medicare Extension (OME) Plan," continued White. "We cannot support a situation where our members' benefits are reduced or their costs go up. However, it is legitimate to go after fraud and waste."

In addition to seeking further details on the impact to Medicare, the Association has great concern over how the bill will be funded. Taxes, of some type, will have to be raised in order to bring mandatory insurance coverage to all Americans.

Under the House plan, a special tax surcharge would be placed on annual individual incomes exceeding $500,000 and on couples exceeding $1,000,000. However, the bill, just passed in the Senate, funds health care expansion through a surcharge on so-called "Cadillac" insurance plans.

Currently, a "Cadillac" plan is defined as insurance coverage (health, eye, dental, etc) that exceeds $23,000 a year (in 2013) for a family plan. Our Association, along with many labor unions across the country, is concerned about this proposal. The current cost (in 2010) of many union and public retiree plans are above or close to the threshold.

"All eyes are now on the conference committee process, where a final bill will be crafted. Who knows what may end up in or out of the final proposal," said Association Legislative Liaison Shawn Duhamel. "Members interested in this subject should continue to follow the breaking news. Being well informed on this legislation is key.

"Meanwhile, credit should be given to Senator John Kerry, who obtained $500 million for Massachusetts in recognition our state's first in the nation health coverage plan. Also another $200 million, included for Massachusetts hospitals, which have been treating the poor and not receiving correct federal reimbursement."

AARP, whom we earlier criticized for giving a somewhat blanket endorsement to the health care dynamic, while at the same time soliciting contributions which would be used to support AARP's position, has most recently taken a wait and see attitude until the House-Senate Conference Committee releases a final version of the Legislation. At that time, AARP will then announce its assessment of the bill, which will be a straight up or down vote by both branches with no further amendments or changes.