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Major Developments

President Obama issued a letter to Congressional leadership today, outlining the Republican priorities that he agrees with and wishes to pursue in his Compromise 2.0 to be released tomorrow. These include 1) undercover health professionals to deter fraud and waste in Medicare and Medicaid, 2) additional appropriations for state malpractice reform, 3) increasing reimbursements under Medicaid, and 4) inclusion of high-deductible plans into the Exchange, in conjunction with Health Savings Accounts (HSAs).

The final provision is the most noticeable, and has it pros and cons. High-deductible plans are often not adequate in providing sufficient comprehensive coverage, though the inclusion of ‘young invincible’ policies in the federal reform bills do mandate preventive services. If ultimately included, the combination with HSAs could make individuals more cost conscious of their health care, but it is necessary that individuals do not become underinsured and are protected with cost-sharing maximums. The letter ends with strong language recognizing the major rifts between the Democrats and Republicans, but rejects the case for piecemeal reform. Read the full letter here.

A 3-step timeline has also been proposed in a memo obtained by Inside Health Policy:

According to the Democratic memo, the timeline may be:

Step one: The House passes the Senate’s health reform bill by March 19. The bill then goes to the president for signature without going through conference.

As part of this step, there are reports that House leaders want to see a letter signed by at least 50 Senate Democrats committing to passing tweaks to the Senate bill worked out between the two chambers, but a Democratic policy consultant says such a letter is unlikely to transpire. More likely, the source said, Senate Majority Leader Harry Reid (D-NV) would privately vow to House Speaker Nancy Pelosi (D-CA) that he has the votes.

Step two: After the Senate bill becomes law, the House then amends the Senate bill through a reconciliation bill, to be passed by March 21.That bill would be the only opportunity to amend, add or strike provisions in the Senate bill.

Step three: The Senate begins debate on the reconciliation bill by March 23. Debate is limited to 30 hours. Votes begin March 26, the first day of Easter recess, at which point Reid announces that the Senate will stay in session through recess to consider all amendments. Vote on final passage follows consideration of the last amendment.

The goal is to pass health reform before the Spring recess (March 29-April 9), so as to avoid a repeat of last year’s brutal August break, sources said.

Senate whip count update: 43 Senators are now on record in support of reconciliation and 35 support inclusion of a public option.