Healthcare reform is a moving target.
Unfortunately, that target right now is insurers.
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
For good measure, she described insurer opposition to the
public plan as “carpet bombing, slash and burn, shock and
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
· 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