It ain’t over ’til
it’s over. Healthcare reform now becomes a House-Senate
Senate Republican Leader Mitch McConnell, R-Ky., on December
19 called the healthcare reform legislation “a
legislative train wreck of historic proportions.” Maybe
he’s right, but at least we managed to jump off the train
just before any collision. We may have sustained some injuries,
but we survived.
Thanks to a handful of moderate Democratic senators, a
provision was stripped from the legislation written by Majority
Leader Harry Reid, D-Nev., that would have established explicit
federal regulation of broker commission schedules for health
insurance. It would have been the worst form of governmental
command-and-control over the insurance brokerage sector ever.
We’d like to send a huge “thank-you” to Sens.
Ben Nelson, D-Neb., Bill Nelson, D-Fla., and Michael Bennet,
D-Colo. They and others used their political capital to help
us, and we will always be grateful.
But it ain’t over ’til it’s over, and
Congress will once again hit the “reset” button on
thousands of provisions as the Senate and House attempt to
reconcile their very different health reform bills. The Senate
was set to approve the bill on Christmas Eve, and the final
version of the legislation is likely to be closer to the better
All sorts of things may pop up in conference committee,
where the House and Senate work out their differences, but we
won’t have to worry about provisions requiring the Health
and Human Services Department to regulate brokers. Such
language was not included in the House bill and is now knocked
out of the Senate version.
The Senate legislation also improved somewhat on another
price-control issue: the cap on overall insurer administrative
expenses. It moved from a flat 10% cap to 15% for groups of
more than 100 and 20% for groups under 100.
What the Senate giveth, however, it taketh away. The bill
gives some nonprofit health plans a break from the tax on
insurers. The exemption would apply to nonprofits that spend at
least 92% of each premium dollar on medical expenses. While
this would be a tough target to meet, it could, frankly, put
downward pressure on commissions.
Moreover, the legislation could have better clarified the
ability of brokers to market all products in state exchanges,
including nonprofit cooperatives. But we can live with it, and
we’ll try to improve it in conference—as a number
of conservative Blue Dog Democrats in the House were very
sensitive on assuring the “broker role” in whatever
health insurance delivery system remains standing.
Is this health reform legislation what we wanted? Of course
not. First and foremost, it is not bipartisan. President Obama
had said he’d rather have a bill that gave him 70% of
what he wanted, with 70 bipartisan votes in the Senate, rather
than 100% of what he wanted with 60 Democratic votes only. That
seems so long ago (and the president arguably got about 70% of
what he wanted with his 60 partisan votes).
The blame game on the lack of bipartisanship will go on for
years, and only time will tell whether Republicans will regret
their strategy of confrontation. As Sen. Richard Burr, R-N.C.,
put it on the eve of the final Senate votes: “If [Reid]
doesn’t get 60 votes, the American people win. If he does
get them, America’s payback will come in the form of the
The practical impact of the Republican strategy put The
Council in a very difficult position. Because Republicans
weren’t playing ball, we had few of our natural allies on
business issues to turn to. So from the get-go, we had to trim
our aspirations. There was no hope of meaningful reform
addressing defensive medicine. There was no prospect of
expanding the ERISA model to more Americans. There was little
opportunity to use the tax code as an effective incentive for
There are two sides of the Massachusetts healthcare
initiative, and we wanted the good stuff from that reform to be
the legislative lesson for the nation. Instead, we got much of
the bad stuff—insurance market reforms that aren’t
backed up by a strenuous individual mandate and exchanges that
will only serve as an incentive for employers to scale back or
drop their coverage. And in the process, our industry was
demonized as never before.
We started out in the year with the White House health
reform czar saying that one of the reasons Congress should
enact a “public option” is “because you
wouldn’t have brokers out there selling.” The
initial versions of the legislation in the House and the Senate
would have explicitly excluded brokers from selling products in
exchanges in favor of labor unions. And deep into December,
Reid was pushing a plan that would have put agent and broker
commissions under the federal thumb. Sure, things could have
turned out a lot better, but they also could have been a lot
worse. And your commitment to political involvement made the
difference in this debate.
Wood is The Council’s senior vice president of