Inside health care reform
January 5, 2010
by Jay Sjerven
The U.S. Senate’s passage of the Patient Protection and Affordable Care Act, which aims to reform the nation’s medical care system and extend insurance coverage to 31 million currently uninsured Americans, drew fire from key business groups, raised concerns among labor organizations that favored the House version of health care reform but found support from the nation’s principal association of physicians.
The Senate on Christmas Eve voted 60 to 39 to pass its version of health care reform. All Senate Democrats and the two independents who caucus with them voted in favor of passage. All Senate Republicans present voted against the act. Senator Jim Bunning of Kentucky did not vote but was opposed to the bill.
The House of Representatives passed its version of the legislation on Nov. 7, largely along party lines. The leadership of the House and Senate was expected to convene a conference committee to reconcile differences between the two bills and produce a final bill that then will be voted on by both houses of Congress.
J. James Rohack, president of the American Medical Association, said, “The A.M.A. supported passage of the bill because it contains a number of key improvements for our health care system, which currently is not working for far too many patients and the physicians who dedicate their lives to patient care.
“The Senate bill will improve choice and access to affordable health insurance coverage and eliminate denials based on pre-existing conditions. It will increase coverage for preventive and wellness care that can lead to better disease prevention and management, and further the development of comparative effectiveness research that can help patients and physicians make informed treatment decisions. Patients will no longer face lifetime limits on health coverage or higher premiums based on medical conditions or gender.”
Business groups, while reaffirming support for reform in principle, asserted the Senate bill would not appreciably lower the cost of health care even as it imposed greater burdens on industry and taxpayers.
Bruce Josten, executive vice-president for governmental affairs for the U.S. Chamber of Commerce, said, “The business community has been consistent in calling for health care reform, but the bill that was passed by the Senate today is counterproductive, does little to lower the cost of health care, and is not reform. It implements crippling new taxes and hurts our ability to create jobs at the worst possible time for the economy.”
Mr. Josten said the health care debate was not over, and he was hopeful a conference between the Senate and the House would bring all stakeholders back to the table.
“Since employers are the ones who will be responsible for putting this reform into practice, their concerns must be addressed,” Mr. Josten said. “It is not too late for Congress to stop this bill from becoming law and start over with the goal of truly reforming our health care system.”
John Engler, president of the National Association of Manufacturers (NAM), asserted, “This bill raises costs for manufacturers at a time they can’t afford it. Our members are going to be the spark plug for economic recovery, but with this bill, they will be burdened with new taxes and other limitations.”
Mr. Engler said 97% of NAM members voluntarily provide health benefits to their employees. He cautioned the Senate bill would put in place an excise tax on some of those health insurance plans that would add costs to both manufacturers and their employees.
Mr. Engler was referring to the bill’s 40% excise tax on so-called “Cadillac” health plans, employer-sponsored group health plans with premiums of more than $8,500 per individual and $23,000 per family. The Senate leadership asserted the excise tax would raise about $150 billion from 2013 to 2019 to help offset the cost of health care reform.
“We believe that companies with older workforces and smaller self-insured plans will be hit especially hard by an excise tax due to the higher cost of their benefits,” Mr. Engler said. “We are disappointed to see discriminatory tax proposals that single out specific industries to pay for health care reform.”
Mr. Engler also charged the bill discourages flexible design benefits for employees and employers by putting new limitations on flexible spending accounts (F.S.A.s), which he said were valuable savings tools.
Dan Danner, president of the National Federation of Independent Business, said his small business association strongly opposed the Senate bill because it would fail to reduce health care costs small business owners face while imposing new and greater costs on their doing business.
“Reform that was supposed to be all about small business has turned out to be more about big business and other late-night dealmakers, all at the expense of our nation’s job creators,” Mr. Danner said.
The National Restaurant Association adopted a more tempered view of the Senate bill.
“As the House and Senate start to merge their health care reform bills, we are pleased the Senate has improved several key elements that are vital to the restaurant industry,” said Dawn Sweeney, president and chief executive officer of the N.R.A. “We will continue to work with the Senate, the House of Representatives and the administration to develop a solution that allows the industry to provide its employees meaningful benefits and supports our industry’s ability to generate the economic growth and jobs our nation needs.”
The AFL-CIO said while passage of the Senate bill continued the momentum for health care reform, it fell short of the reform required.
“The Senate bill does some good things,” said Richard Trumka, president of the AFL-CIO. “It will provide health insurance to 30 million more Americans and provide subsidies to low-income individuals and families. Benefits will have to meet minimum standards, and insurance companies will no longer be able to deny coverage based on preexisting conditions or impose lifetime or unreasonable annual limits. The bill also includes some relief for plans with early retirees as well as delivery system reforms that may lead to lower costs over the long haul. And Senate leaders have made a commitment to close the Medicare prescription drugs donut hole that is so costly to seniors.
“But because it bends toward the insurance industry, the Senate bill will not check costs in the short term, and its financing asks working people and the country to pay the price, even as benefits are cut.”
Mr. Trumka said the AFL-CIO opposes the excise tax on “Cadillac” health plans asserting one in five workers with health benefits would be affected by the tax in the near term with that percentage expected to grow because the threshold amount at which the tax is applied would rise at a slower rate than plan costs are expected to rise.
Mr. Trumka also lamented the absence of a “public option” in the Senate bill.
“The House bill is the model for genuine health care reform,” Mr. Trumka said. “Working people cannot accept anything less than real reform.”