These days, trying to keep up with what's taking place on Capitol Hill with health care reform requires hourly vigilance. There are several proposals, in various phases of progress. This is the first time Congress has taken up health care seriously since the 1993-1994 Hillary Clinton attempt.
Several of the proposed bills are attempting to satisfy the outline of the president's "Principles for Health Reform," released in February 2009. That is, rather than trying to design his own plan, the president is leaving it up to Congress to craft a bill he wants to sign by October. The president made it clear he will sign health reform as part of the budget reconciliation process if necessary -- a move that would only require 50 votes in the Senate, rather than the normal 60.
So what's "on the table?"
The Senate Finance Committee, chaired by U.S. Sen. Max Baucus, D-Mont., has yet to release its bill. However, general components of the bill are that it would require all individuals to have health insurance and create a Health Insurance Exchange through which individuals and small businesses could purchase health coverage, with subsidies available to certain individuals/families based on income.
The Senate Health, Education, Labor and Pensions Committee, chaired by U.S. Sen. Edward Kennedy, D-Mass., released its bill in early June. It also would require all individuals to have health insurance and create state-based American Health Benefit Gateways through which individuals and small businesses could purchase health coverage, with subsidies available to certain individuals and/or families based on income.
There are also two other Senate bills, one joint Senate-House bill, and three other House bills.
What most of these bills seem to have in common are:
- No call for a single-payer system, but rather a plan that would involve the government and the private sector. The purpose of government involvement, the bills suggest, would be to "balance" the private insurance industry. Republicans, the insurance industry, and the medical community in general, naturally, are opposed to such a plan. Democrats and others are strongly pushing for it.
- A mandate that everyone purchase individual insurance. Without this, the authors say, healthy people may not purchase insurance, leaving premiums only being paid by unhealthy people, and thus leaving less money available in premiums to cover their costs.
- The creation of central exchanges for buying insurance.
- Premium subsidies for the poor.
- Stronger regulation of private insurance companies, including requirements that they cannot deny coverage to people with pre-existing conditions or charge more for such coverage.
Democrats say government involvement is the only way to contain costs and keep premiums low. Republicans and insurers say that it would drive insurance companies out of business and eventually lead to an entirely government-run U.S. health care system and significant pricing power.
Democrats hope to have a synthesized bill (a combination of Kennedy and Baucus) ready for the Senate floor by July, with final passage by the August recess. By September, the Senate and House hope to have a compromise piece of legislation that the President wants on his desk by October.
As of this writing (early July), observers state that, of the various Senate and House committees working on health care, the Baucus bill is the only one that appears to have a chance of bipartisan agreement.
So what do industry groups have to say about the current push on Capitol Hill for health care reform? All of them have concerns, but, interestingly, there also is some sentiment that the issue is so incredibly complex and contentious that it is doubtful anything will pass this year.
National Center for Policy Analysis
The National Center for Policy Analysis is a nonprofit, nonpartisan public policy research organization established to develop alternatives to government regulation, by relying on the private sector. (www.ncpa.org)
According to Devon Herrick, Ph.D., a senior fellow and health economist with the NCPA, the push for health care reform is the result of the Obama administration trying to avoid some of the mistakes of the Clinton administration in 1992-1993, which caused that health reform initiative to derail.
"The Obama administration set out its goals in broad strokes, but let Congress take the lead," he explains. "One reason the Clinton plan failed was because they left Congress out of it."
The goal of Congress is to create a unified plan. "They want to be able to fast-track them through, so there won't be a lot of fighting on the floor of the House and Senate," Herrick continues.
However, as Herrick sees it, success will be difficult.
"Kennedy has his own bill, and it would cost about $1 trillion over 10 years," he states. "Baucus is a moderate, and his concern is how do we pay for all of this. The problem now is that no one can figure out how to pay for a massive expansion of health insurance."
If and when there is a consensus proposal, Herrick expects it will have an individual mandate, and he also expects it will have some type of employer mandate, although how big it would be is hard to estimate.
The biggest point of contention over the last few weeks, though, has been about the "public plan option."
"Democrats on the far left want a 'Medicare for all' type proposal," he states. "Moderates want a more agreeable mechanism."
The Lewin Report
The Lewin Report, a Web site maintained by the American College of Cardiology (http://lewinreport.acc.org) looked at thepublic plan option recently.
"If it was like Medicare, according to their research, people would pay lower rates than they would for private health insurance -- about 25 percent less," Herrick says.
In addition, the public plan could leverage Medicare rates with providers, paying reimbursements 20 percent to 30 percent below what private insurers play. The Lewin Report found that, if this ended up being the case,a lot of employers would probably drop their health coverage and put their people into the public plan.
The Lewin Report estimate that was that about 131 million people might join the public plan, about 119 million of whom would be people dropping private coverage.
"If you add to this the number of people who are already in Medicare and Medicaid, as well as the talked-about expansion of coverage for Medicaid, you are talking about 230 to 240 million people in some type of public plan," notes Herrick. "This is a 75 percent to 80 percent share of the market for health coverage, and this would really crowd out private insurers."
This is why, according to Herrick, Republicans are really against any type of public plan option, out of fear that it would end up being a de facto single payer.
"I think this is very real concern," he concludes.
American Benefits Council
The American Benefits Council is a national trade association for companies concerned about federal legislation and regulations affecting employee benefits systems (www.americanbenefitscouncil.org).
Recently, the council, with the assistance of Miller & Chevalier, a law firm with leading practices in tax and employee benefits, published its second annual "Corporate Health Care Policy Forecast Survey." The report was based on survey responses from benefits professionals in large organizations around the United States.
"The survey was done in May with health benefits professionals who continually follow what is taking place in Washington, so they are very familiar with the legislation that is being proposed," explains Susan Relland, with the health policy and compliance/employee benefits practice of Miller & Chevalier.
Some highlights of the survey results:
- The more that health care reform is based on a government-run and government risk-bearing solution, the less corporate benefits executives support the proposal. From the survey, 56 percent support the government helping with choices among private plans, 42 percent support expanding the government safety net, and just 11 percent support the government establishing a plan that would compete directly with the private marketplace.
- Three-quarters of respondents said that their company would immediately reduce or cease altogether offering retiree health coverage if legislation were enacted that prevented employers from modifying retiree health care benefits in the future.
- In an open-ended question asking respondents to identify their company's single biggest health care burden, 85 percent cited cost-related concerns, compared to 47 percent in 2008.
- Employers understand that continuing to provide health care to their employees is very important. In fact, 89 percent of respondents said they believed that employees would prefer to receive health insurance through employers, even if similarly-priced options were available through the government or individual plans.
- Respondents overwhelmingly pointed to improvements in health care quality, such as reporting of quality outcomes and wellness, or chronic care programs, as the areas that could have the most positive impact on their work force.
"In sum, we found that cost and quality were very big concerns among respondents," states Relland. "In fact, a majority of them wished that Congress would focus more on health care cost and quality issues during the reform debates."
While the survey didn't focus on any specific bills that would be introduced, it did focus on likely provisions.
"For example, we asked which policies, if enacted, would have a strong negative impact on their work force," she notes.
When asked about the public plan option, 40 percent felt this would have a strong negative impact on their work force. And when asked about replacing the employee tax exclusion with some kind of limited tax deduction or credit, 66 percent felt it would have a strong negative impact on their workforce.
"I think that, overall, the responses we received this year helped to validate the responses we got last year," observes James Klein, president of the American Benefits Council.
What does the future of the health care legislation look like in general?
"Before today [June 17], it looked like things were starting to come together," replies Relland. "However, based on meetings I attended all day today, it really looks as though the plans are starting to unravel. They are beginning to hit roadblock after roadblock." Relland doesn't think this means they are done talking about it and working on it. However, she believes that people are starting to step back and re-evaluate the plans and see some need to make some adjustments to them.
National Association of Health Underwriters
NAHU represents licensed health insurance agents, brokers, consultants, and benefit professionals who serve the health insurance needs of employers and individuals seeking health care coverage (www.nahu.org).
As is the case with many organizations affiliated with private health insurance, NAHU has several concerns about the proposals on Capitol Hill.
"First, we have some concerns about the government-run health plan that we believe would be duplicative of the existing private market," states Jessica Waltman, senior vice president of government affairs.
This would be a waste of government resources, and the government shouldn't be competing directly with the private market."
According to Waltman, NAHU would much rather see them have market rules that work.
"We also have technical concerns about some of the market reforms that are being proposed," she continues. The Kennedy bill and one of the House bills put out very strict modified community rating requirements, such that the only factors being considered are: geographic region; family composition; and age, with a variation of only two-to-one. "These are very tight compared to what is currently used," she explains.
There are also problems with the way the bills would deal with group size. "The way the large group market works now is that they are experience-rated, and everyone is charged the same premium, but the premium is based on health experience of the group, which is something that can be done with a larger pool," she explains. This is why their rates are lower. The bills would eliminate this opportunity. "As such, we are concerned that large groups would see 'rate shock' under both of these proposals," she continues.
NAHU does support the individual mandate for coverage, but believes that it needs to be effective and enforceable. "We don't believe that the mandate provisions in the Kennedy and House bills will be sufficient to require everyone to participate in the system," she explains.
What is NAHU's projection on the future of all of this legislation? "The costs associated with the Kennedy bill and similar bills in the House have a lot of people concerned," replies Waltman. It is expected that the Baucus bill will be more moderate than the Kennedy bill, and the Baucus team is currently making cuts to its draft legislation, based on the preliminary "score" that they received.
"As a result, we are anxious to see what comes out of the [Baucus] Finance Committee in the next week or two," she adds.
However, because of the delays that are already occurring in the Senate, it is hard for Waltman to see how they can get the bills "marked up" and out of their respective committees and finished before the August recess.
"If they don't have something passed out of both houses before the August recess, it would be very difficult to meet the October schedule," she states.
However, the reconciliation process is available if something is not finalized by Oct. 15.
"We are hopeful that they don't rush something like this just to get a bill out by Oct. 15," states Waltman. "A measure of this magnitude deserves all due consideration. We believe that it should go through the regular order of the Senate, with balanced debate and bipartisan contributions. It should not go through the reconciliation process."
America's Health Insurance Plans
AHIP represents almost 1,300 member companies that provide health insurance coverage to more than 200 million Americans. Member companies offer medical insurance, etc. (www.ahip.org).
The following is a press release issued on June 19 by Robert Zirkelbach, director, strategic communications, a follow-up to a press release issued on June 9 by AHIP President and CEO, Karen Ignagni. (A spokesperson from AHIP was not available for interview by deadline.)
"We strongly believe that now is the time for comprehensive, bipartisan health care reform that makes care more affordable, improves quality, and covers all Americans. We are currently reviewing the [Kennedy] draft and look forward to participating in a broad discussion of the workability of the proposed reforms.
"Health plans have offered a comprehensive overhaul of existing market rules and new consumer protections to achieve universal coverage, guarantee coverage for pre-existing conditions, discontinue rating based on health status or gender, and ensure continuity of care and portability of coverage for all individuals.
"The American people overwhelmingly agree that those who like their current coverage should be able to keep it. We share the concerns that providers, employers, and patients have raised about the significant unintended consequences of a government-run plan. A government-run plan would dismantle employer-based coverage, add additional liabilities to the federal budget, and turn back the clock on efforts to improve the quality and safety of patient care. Estimates show that 100 million people would lose their current coverage and be forced into a government-run plan.
"A better approach is to pursue reforms that can achieve broad partisan support, including strengthening the health care safety net, overhauling existing market rules, promoting shared responsibility, and transforming the delivery system to reward quality and value.
"As we work toward the shared goal of simplifying health care choices, it is crucial to develop an architecture with workable rules that ensures broad participation of health plans, makes available a variety of coverage options, and avoids the duplicative regulation that makes it harder for working families and small employers to afford coverage. Moreover, health care reform needs to ensure that patients continue to benefit from health plans' programs that improve quality and safety, advance evidence-based care, and promote affordability.
Society of Professional Benefit Administrators
The SPBA is a national association of third-party administrators contracted to administer employee benefit plans on an ongoing basis.
"We are non-political and non-partisan," explains Fred Hunt, president. "We represent TPAs, so we have the advantage of having intimate knowledge of what is going on, but we don't have a vested interest."
As Hunt sees it, the bills in general tend to reflect one of two options:
There are those taking the financial responsibility approach, such as Baucus and Obama. "Even though it is wishful thinking, they say that this needs to pay for itself," he states.
The other proposals focus on "loading things up" and making this a stepping stone to national health insurance and universal coverage.
According to Hunt, of all the bills that have been introduced, the one to pay attention to is the Baucus (Finance) bill.
"This is where the power is, and this is the one the President has 'signed onto'," he explains.
The Baucus bill is also the one that is taking the financial approach, which is important to the president.
"It is also important to the Finance Committee, because nothing passes without the Finance Committee's blessing," he adds.
"However, it is also important to remember that there is only a 50 percent to 60 percent chance that anything will pass this year in health reform," states Hunt. "Even Tom Daschle, who has been a major proponent of health reform and certainly knows the mechanics of how the Senate works, estimates only a 50 percent chance."
Hunt believes that we will know by the end of July one way or another if things will move forward. If there is not a solid Senate version and a solid House version available by then, it probably won't happen this year. Even if there are solid Senate and House versions, if people don't see that these can be meshed, it probably won't happen either.
"There just aren't enough legislative days in the year," he notes.
So what about picking up the issue next year? Chances are unlikely, according to Hunt.
"It is an election year, and that is important," he explains.
That is, if you ask various groups if they are for health reform, about 80 percent of them will agree that they are. However, each of them has concerns about various portions of the bills, and each group has a different portion that it doesn't like.
"As a result, support drops to about 20 percent for any bill in particular," he points out.
This is true for the public in general, too. For example, according to Hunt, if you ask people if they support improved records efficiency, about 80 percent will agree.
"However, when you tell them that this means centralized electronic medical records, most of them wouldn't support this," he states.
As such, he believes, even if a compromise bill does come out, support for it would drop like a rock because of certain segments of the bill that would cause problems for certain groups, and, he believes, legislators are not going to want to have to deal with that backlash during an election year.
