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Jamie Dupree's Washington Insider

Posted: 11:12 p.m. Wednesday, July 29, 2009

The Blue Dog Deal 

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By Jamie Dupree

Okay, so by now you've heard that Democratic Blue Dogs cut a deal with their party leaders on a health care reform bill.  But what would the changes do?

One provision addresses the point at which businesses would be exempted from rules that would require them to provide health insurance to their employees.

The original bill set that limit at $250,000 in payroll for a year; this deal doubles that to $500,000.  Anything over that amount, and you would have to pay penalties for not buying your workers health insurance.

The bill also changes how the penalty for that is calculated, as it would be phased in between $500,000 and $750,000.  Above that, it would be the full 8 percent of a worker's salary.

One area of agreement that has riled up liberals is on the public insurance option.  While the bill did not restrict that government option, it does give states the right to set up health care cooperatives, which are at the center of bipartisan efforts in the Senate.

Cooperatives are owned and operated by their members, and are non-profits, leaving more money for health care coverage.

The Co-op idea is fiercely opposed by more liberal lawmakers, one reason why so many of them want no part of the deal that's being worked out by six Senators, three from each party.

Other changes include a plan that would allow the poor to get subsidies to help them buy insurance after spending 12 percent of their income on premiums.  That figure is 11 percent in the current Democratic bill.

Another provision that's sure to prove controversial is on an expanded Medicaid program.  It would shift more of the costs to the states, something Governors of both parties say is ridiculous, given the very difficult economic times they are encountering.

Finally, doctors and other medical providers could negotiate payment rates with the federal government, instead of having those rates tied to Medicare. 

The Blue Dogs who back these changes say if they aren't all made part of the bill that's before the Energy and Commerce Committee, they reserve the right to vote against the bill.

So there are the basics of the changes that were made in this deal.  Backers say they would lower the cost of the bill by $100 billion over ten years.

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