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Compromises-O-the-Day

Meetings in the White House continued this afternoon after the conclusion of yesterday’s 1 a.m marathon. Discussion centered around the types and extent of subsidies and benefits, though the President and Congressional leaders were unable to finalize a bill before the end of today’s session. Talks are expected to continue tomorrow, though tangible progress was made today:

Biologics
Some more Presidential arm-twisting today, where it appears that Obama was able to reduce the exclusivity period of expensive biologic drugs (a $300B industry over the next 20 years) from 12 years to 10 years before introduction of generic versions.

Health Insurance Exchange
Though not finalized it appears the Exchange will be a hybrid of the two bills’ versions, meaning a state-based structure with significant federal regulation and oversight (details to come).

Medicaid Financing
In the wake of the Nebraska debacle, Ben Nelson has called for the removal of his state’s special treatment and it appears that Obama and lawmakers intend to increase the amount of federal aid to all 50 states for the Medicaid program (revenue for full financing is still being explored).

Insurance Subsidies
Aiming to improve affordability, it appears that an additional $10B in fees will be imposed on medical device manufacturers to provide additional subsidies for low-income individuals and families in the Exchange.

Insurer Antitrust Exemption

Here is a letter from a large group of Senators (including CA’s Dianne Feinstein) calling for repeal of the exemption (in the House bill, not in the Senate bill):

Dear President Obama, Majority Leader Reid, and Speaker Pelosi:

We write to reiterate our call for inclusion of language that repeals the Federal antitrust exemption for health insurers and medical malpractice insurers in the final Patient Protection and Affordable Care Act that is signed into law. There is simply no reason for health insurance and medical malpractice insurance companies to be exempt from Federal laws prohibiting price fixing, bid rigging, and market allocation. These acts hurt consumers, drive up health care costs, and should be prohibited in the health insurance industry, as they are in virtually every other industry.

For nearly 65 years, the insurance industry has been exempt from Federal antitrust laws. Regulation of the insurance industry has been left with the states, which often lack the time and resources to effectively investigate antitrust conspiracies. Thus, the competitive activities of health insurers and medical malpractice insurers remain effectively unchecked. While there are divergent views on the best way to introduce choice and competition into health insurance market, we can surely agree that health and medical malpractice insurers should not be allowed to collude to set prices and allocate markets.

The House-passed health care legislation, H.R. 3962, included a repeal of the health insurer antitrust exemption. Twenty-three Senators cosponsored our amendment to the Patient Protection and Affordable Care Act to repeal this antitrust exemption for health and medical malpractice insurers. Regrettably, there was no opportunity for it to be offered during Senate debate.

This reform is long overdue and the time to act is now. We look forward to working with you to ensure that repeal of the antitrust exemption for health insurers and medical malpractice insurers is included in the final health insurance reform bill that is signed into law.

Respectfully,
PATRICK LEAHY
Chairman
Committee on the Judiciary

JOHN F. KERRY
United States Senator

JAY ROCKEFELLER
United States Senator

JOSEPH I. LIEBERMAN
United States Senator

DIANNE FEINSTEIN
United States Senator

RUSSELL D. FEINGOLD
United States Senator

RON WYDEN
United States Senator

MARY L. LANDRIEU
United States Senator

CHARLES E. SCHUMER
United States Senator

MARIA CANTWELL
United States Senator

FRANK LAUTENBERG
United States Senator

BERNIE SANDERS
United States Senator

CLAIRE MCCASKILL
United States Senator

SHELDON WHITEHOUSE
United States Senator

ROLAND BURRIS
United States Senator

TED KAUFMAN
United States Senator

KIRSTEN E. GILLIBRAND
United States Senator

AL FRANKEN
United States Senator

MICHAEL BENNET
United States Senator

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