With clock ticking, Senate measure proposals in flux

Jerry Geisel

WASHINGTON—Health care reform legislation is inching its way to a Senate floor vote as Democratic leaders continue to wheel and deal to get the support needed to assure passage.

Last week, Senate Majority Leader Harry Reid, D-Nev., tried to end a long-running controversy holding up Senate consideration of the legislation.

That controversy involves a provision in the measure—opposed by all Senate Republicans and some moderate Democrats—that would establish a government-run health insurance plan for individuals purchasing coverage through state health insurance exchanges that the legislation would authorize.

Public option supporters say it is needed to give commercial insurers more competition, especially in the personal lines market.

But the public option in its current form has so much opposition that Sen. Reid would be unable to get the 60 votes needed to bring the legislation to a vote unless he jettisons the provision, observers say. Several senators, such as Sen. Joseph Lieberman, I-Conn., said they will not vote for the legislation if it includes a public option.

As a result, Sen. Reid has been working with a group of Democratic senators to develop alternatives.

“Clearly, things are in flux,” said Paul Dennett, senior vp-health care reform with the American Benefits Council in Washington.

“Big ideas are being plotted out in small circles,” added Helen Darling, president of the National Business Group on Health in Washington.

One idea floated as an alternative to a public option is establishing a Medicare buy-in program starting at 55 years old. Eligibility would end at age 65, when entitlement to the regular Medicare program begins. Few details were available on the plan.

In the absence of publicly available explanations, there are many questions about the proposal. For example, it wasn’t clear how much beneficiaries would pay in premiums and how much of their Medicare buy-in premiums, if any, would be subsidized by the federal government.

Even in its rough form, some business groups oppose the idea. They note that provider Medicare reimbursement rates already are inadequate in some cases, which leads to providers passing charges to patients covered by employer plans.

If Medicare were expanded, the problem of provider cost-shifting to help offset undercompensated care would be exacerbated, Ms. Darling said.

Gretchen Young, vp-health policy at the ERISA Industry Committee in Washington, agreed. “We are very concerned about the potential for cost-shifting,” she said.

Others worry that the premiums would not come close to covering costs, meaning lawmakers would have to bolster funding for the new program, such as imposing higher taxes.

“We think it would be a terrible idea to add more Medicare beneficiaries” when Medicare already can’t meet future obligations, said Neil Trautwein, vp and employee benefits counsel with the National Retail Federation in Washington.

Aside from revamping, if not eliminating, a public option, Washington observers say Senate Democrats have been discussing changing a provision—strongly opposed by employers and organized labor—that would impose a new excise tax on the costliest group health plans.

Under that provision, a 40% excise tax would be imposed on health insurance premiums exceeding $8,500 for single coverage and $23,000 for family coverage starting in 2013. The threshold triggering the tax would be higher for plans covering early retirees and employees in certain high-risk industries.

One alternative that was being floated would impose a tax on increases in health insurance premium that exceed a certain percentage, such as the annual increase in the gross domestic product plus an additional percentage.

Benefit experts expect the wheeling and dealing to continue until Sen. Reid has put together a package that will attract the needed 60 votes.

“The legislation is moving in fits and starts. You think it is down and then it comes back up,” said ABC’s Mr. Dennett.

Still, time is ticking away. If Sen. Reid doesn’t produce a package soon that has 60 votes, his goal of passing a bill by the end of the year could be in jeopardy, something the majority leader does not want to happen.

“He will do everything he can to bring a bill to a vote before Christmas,” Mr. Dennett said.

The heart of the legislation remains the same—moving the nation closer to universal coverage by providing federal health insurance premiums to the lower-income uninsured. It also would impose financial penalties on employers not offering affordable coverage, as well as on individuals who do not enroll in a health insurance plan.

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This entry was posted by Adam V. Russo on Tuesday, December 15th, 2009 at 2:13 pm and is filed under Health Care Legislation, Medicare. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.