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Federal Activity: Implications of the FY 2010 Federal Budget for State Health Policy

Federal health care reform regained momentum in late April when Congress passed a budget resolution calling for reform and the Senate confirmed Kansas Governor Kathleen Sebelius as health and human services secretary. The governor's 65–31 confirmation occurred April 28 as the nation's top health officials were preparing for the possibility of a H1N1 Flu (Swine Flu) pandemic. The urgency of the public health situation sped up the confirmation, which until then had been held up by Republican senators' concerns about the governor's position on health reform and her political ties to a doctor in her state who performs late-term abortions, among other issues.

As the confirmation drama played out, Democrats in Congress and the White House struck a budget deal on April 27 that would make it easier to push through health care reform this year. The budget resolution would allow Senate Democrats to pass health care reform with a simple majority, instead of the 60 votes needed to pass most controversial legislation. Like President Barack Obama's federal fiscal year 2010 spending proposal, the resolution would set aside $634 billion over 10 years in a reserve fund for what President Obama calls a "down payment on health care reform."

The decision to use reserve funds facilitates consideration of health care reform because, as long as the legislation does not exceed the amount reserved or increase the deficit, it can be approved by a simple 51-vote majority in the Senate, rather than the 60 votes usually required to adopt new spending. The president's original budget proposal, while leaving the details to Congress, sets clear expectations for overhauling the health care system to make health coverage affordable and portable; guarantee people a choice of plans (including keeping the coverage they have through their employers); invest in prevention and wellness; improve patient safety and quality care; and aim for universal coverage. The budget resolution gives these expectations a boost, and moves one step farther down the path of a federal solution to U.S. health system ills.

State officials now need to carefully consider how existing or planned state reforms fit the potential course of federal reform. In some cases, states may choose to accelerate reforms in the direction they believe federal policy is headed (expanding CHIP eligibility, for example). Or they may decide to wait and see if federal health care reform becomes reality. According to Max Baucus and Edward Kennedy, the chairmen of the Senate committees with jurisdiction over health care reform, state officials will not have to wait long to know the course of reform: the senators sent a letter to President Obama saying they intend to mark up comprehensive health care reform legislation in June 2009.

For more information

Center on Budget and Policy Priorities Web site
Walter Alarkon, Budget Deal Includes Fast-Track for Health Reform, The Hill (April 24, 2009)

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