Health Care Reform Hurdles Mounting
Largely partisan votes advance distinct plans in House and Senateby Jerry Geisel, Business Insurance Magazine, www.businessinsurance.com
WASHINGTON-Divisions emerged even among the Democrats that control Congress as committees began action on health care reform legislation last week, raising doubts that lawmakers can agree on a final package.
Three of the five congressional panels with jurisdiction on the issue-the Senate Health, Education, Labor and Pensions Committee and the House Education and Labor Committee and Ways and Means Committee-passed distinct packages intended to bring the United States closer to universal health care coverage.
Even as the committees acted, there were warning signals of the hurdles the legislation faces.
The first warning signal was the Senate committee’s 13-10 party-line approval of legislation, with all Republican members opposing the legislation brought in the upper chamber. In the House, three Democrats on the Ways and Means and Education and Labor Committees voted with their GOP colleagues in opposing the plan introduced by House leaders.
That failure to garner any GOP support could be a harbinger of future problems, observers said.
“It is extremely difficult for a partisan, one-party-supported bill to survive on the Senate floor. It would require an extraordinary amount of party discipline to get all 60 (Democratic) members to vote for it,” said Paul Dennett, senior vp-health care reform at the American Benefits Council in Washington.
Another warning came from the nonpartisan Congressional Budget Office, whose director said the Senate bill would not slow the growth in federal health care spending.
“In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount,” CBO Director Douglas Elmerdorf said at a Senate Budget Committee hearing last week.
That assessment flies in the face of the president’s goal of reform legislation slowing the increase in health care costs.
Lack of support?
Yet another ominous sign, benefit observers said, was that the House Energy and Commerce Committee might lack enough support from Democrats to pass a bill, on which a vote is expected this week.
In addition, numerous provisions not directly related to the core of the legislation-like bringing the nation close to universal health care coverage by as providing federal premium subsidies to the low-income uninsured and mandating that employers offer coverage or pay a penalty-also could hurt chances of passage.
For example, additions to the House bill include curbing the ability of employers with retiree health care plans from cutting benefits to current retirees; ending the ability of flexible spending accounts, health reimbursement arrangements and health savings accounts to reimburse participants for over-the-counter drugs; and allowing employers to extend coverage to employees’ same-sex or opposite-sex partners without adding that cost to employees’ taxable income.
“The more that is added on, the more likely the legislation will crash,” said Chantel Sheaks, a principal with Buck Consultants L.L.C. in Washington.
“We are a long way from a bill-signing ceremony at the White House,” Mr. Dennett said.
Still, enactment of a reform bill this year remains possible given several factors.
“The odds favor a major bill being passed. It is a top presidential priority. Congress is very focused on the issue and there is a public thirst, with the number of uninsured rising, for health care reform,” said Frank McArdle, a consultant with Hewitt Associates Inc. in Washington.
Several factors-including development of a bipartisan bill by the Senate Finance Committee or eliminating or paring down a provision in both bills to create a public plan option-could defuse opposition from Republicans and conservative Democrats. A combination of changes, Mr. McArdle said, could result in enough Republican support to prevent a filibuster in the Senate, which would require 60 votes to override.
Basic features of the measures winning congressional committee approval so far include a so-called employer play-or-pay mandate. Under the Ways and Means Committee-approved bill, employers would have to pay 72.5% of the premium for individual coverage and 65% for family coverage (see chart).
Employers that did not meet these requirements would be assessed a penalty of 8% of salary for each employee not covered. The penalty would not apply to employers with annual payrolls up to $250,000, while the payroll tax would gradually increase for employers with payrolls between $250,000 and $400,000.
Under the Senate bill, the mandate would apply to employers with more than 25 employees. Those that didn’t meet certain standards laid out in the bill-including paying 60% of the premium for individual and family coverage-would have an annual assessment of $750 for each full-time employee and $375 for each part-time employee not covered.
The House measure also includes an escalating surcharge, which starts at 1% and tops out at 5.4%-on taxpayers’ adjusted gross income exceeding $350,000 to help fund the expansion of coverage.
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