Leader's Edge logo Under the Dome by Joel Wood Tell the Editor
Moving Target

Healthcare reform is a moving target. Unfortunately, that target right now is insurers.

By  Joel Wood

Two months is forever in politics. Witness the fascinating political turn of events for the health insurance industry. In June, health plans were being lauded, at the White House no less, for their willingness to “come to the table” with significant reforms to increase health insurance access and affordability. What was unimaginable a year earlier was now being offered up by the insurers—guaranteed issue, elimination of pre-existing conditions restrictions, modified community rating. Presumably much more was on the table.

By the time the August congressional recess had come, House speaker Nancy Pelosi was the first in a chorus of Democratic leaders attempting to reframe the debate. Her comments illustrate how the health reform debate has evolved.

“They are the villains in this. They have been part of the problem in a major way,” she said of health insurers. Describing industry lobbying against a government-run insurance option as “almost immoral,” she continued: “Of course, they’ve been immoral all along. They are doing everything in their power to stop a public option from happening, and the public has to know about it… They’ve had a good thing going for a long time at the expense of the American people and the health of our country.”

For good measure, she described insurer opposition to the public plan as “carpet bombing, slash and burn, shock and awe.”

Politics is a game of perception. The strategy of bashing insurers will either provide the platform through which Democrats will prevail on the government-run plan option, or it’s a desperation move that ensures a result similar to that of Hillary-care in 1994. Or it could be neither—one more ploy along a winding road toward a muddled compromise.

In any event, with Congress set to return in September, and with deadlines again being threatened, the stakes for brokers and their clients are high. Over and over again leaders say: “If you like your insurance, you get to keep it.” If that promise could be upheld, the huge majority of the clients of Council member firms would have nothing to fear. But of the bills that had cleared congressional committees in the House and Senate before the August break, this is a promise that cannot be kept, because the “public option” would be based on Medicare-level reimbursement.

Brokers have spoken clearly within our association, and among all the other leading business groups, about the dangers of going down that path. I certainly don’t like the fact that this issue is partisan, whereas most of our issues through the years have not been ideologically driven.

But even putting aside the public option, there are reasons for concern about the path of health reform efforts. Some examples:

· The House committee bills include provisions barring employers with retiree health plans from cutting benefits to current retirees unless they do the same for existing employees. This would lock employers in forever and be a disincentive for employers to offer benefits.

· The House committee legislation would mandate a broad range of benefits that “qualified” employer plans must offer and create a Health Benefits Advisory Committee to make recommendations on benefit design. While no one knows what the Advisory Committee would recommend, the shift in control to the federal government would be substantial.

· Under the plan passed by the House Education and Labor Committee, COBRA beneficiaries could have their eligibility extended for years (until they’re covered under a new employer plan or until they become eligible for coverage through new insurance exchanges, which the legislation would establish starting in 2013).

· Senators are threatening to add direct taxes to existing private plans to raise a substantial portion of the out-year costs of health reform that provides universal coverage.

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