Congress Pursuing Health Care Reform On Many Fronts

Congress appeared to be moving late last week toward healthcare reform legislation that addresses the concerns of the health insurance industry, but industry officials say enactment of final legislation is unlikely to occur before late fall at the earliest.

At the same time, however, support appears to be growing in Congress for including in the bill a provision creating a long term care entitlement program, the so-called CLASS Act or Community Living Assistance Services and Support Act.

Industry officials voiced dismay at this development.

On the total package, a bipartisan group of members of the Senate Finance Committee, whose chairman is Sen. Max Baucus, D-Mont., were moving at press time toward drafting legislation that would include incentives for employers to provide health insurance coverage for their workers rather than impose a more drastic mandate.

The Senate Finance bill would also mandate creation of health insurance “cooperatives” modeled after rural electricity providers rather than the so-called “public option” strongly opposed by both health insurers and agents.

And sources close to the panel say the committee’s final product is likely to propose narrowly targeted tax increases, unlike the controversial tax surcharge on the wealthy adopted by the House, and limits on deductions for high-income taxpayers supported by the Obama administration.

Industry officials and congressional staffers said the Senate panel could vote on the measure before the Senate leaves for its summer recess Aug. 7.

In the House, opposition by conservative Democrats to provisions also opposed by the insurance industry as well as Republicans, have delayed action by three committees dealing with healthcare reform until fall.

Diane Boyle, executive vice president of the Association of Health Insurance Advisors, said her members are “encouraged” by the latest events.

“The negotiations in the Senate Finance Committee look promising,” she added. “We were always hopeful that what would come out of Senate Finance would be more to our liking and what we are seeing indicates that will most likely be true.”

She specifically cited the provisions dealing with the employer mandate and the public options.

Boyle said she was also encouraged by the decision of the House to delay action until after the recess. “We are hopeful that the House ‘tri-committees’ will use the delay until after the recess to come back and amend the current draft to make it more amenable and realistic,” she said

Joel Kopperud, director of government affairs for the Council of Insurance Agents and Brokers, said the concern about the employer mandate within the industry is that a mandate would have acted as an incentive for companies to pay the penalty imposed by the House bill, as much as $800 per employee, rather than buy group insurance policies for the entire company.

“I think the most important news is the employer mandate piece as it relates to the public option,” he said. “If the package includes a cooperative instead of the government-run plan that is in the versions of the legislation drafted by the Senate Health, Education, Labor and Pension Committee and is also in the House bill, it’s more likely that the private sector will be able to fairly compete.”

He explained that a “public” health plan would pay no state premium taxes, would not have to generate a profit to keep operating, and would have lower costs for administration, such as offices and employees.

“A public plan will undermine the private marketplace, whereas a cooperative is more likely to compete on a level playing field than a government insurance plan,” Kopperud said.