Industry Faces Uphill Battles In New Senate Landscape

The political earthquake that shook Washington, D.C. to its core late last month when Senator James Jeffords of Vermont declared his independence from the Republican Party is bound to do damage to the industry’s cause on a number of fronts.

Jeffords’ abrupt party switch turns the Senate upside down, with Democrats displacing Republicans as committee chairmen. Thus, Democrats will control the flow of legislation in the Senate, which means bills near and dear to the hearts of the insurance community may never see the light of day, while others might be introduced that insurers oppose.

One of the most controversial issues affected will be patients’ rights legislation.

Last month, Jeffords joined with Sen. Bill Frist, R-Tenn., and Sen. John Breaux, D-La., on a bill that would allow patients to sue their health plans for a limited amount in federal court, but only after they had completed a thorough utilization review process. That measure is likely to gain steam with the suddenly high-profile Jeffords behind it.

Patients’ rights was one issue that seemed to cross party lines, and a bipartisan compromise appeared to be inevitable at some point. However, the right-to-sue provision, if it survived at all, was likely to be toned down in a Republican Senate.

The insurance industry knew it had a sympathetic ear among the Republicans when it argued that allowing lawsuits against health plans would hike liability and litigation costs, thereby pushing already soaring health coverage expenses even higher, and ultimately leaving millions of more people uninsured. They will have a much harder time making their case in a Democratic-controlled Senate.

Tougher privacy regulations could also come out of a Democratic Senate. While privacy, like patients’ rights, is an issue that resonates across the political spectrum, the fact is stricter, more restrictive standards are more likely with Democrats in charge.

Indeed, insurance lobbyists are already lamenting that Sen. Paul Sarbanes, D-Md., who will now chair the Senate Banking Committee, has co-sponsored privacy legislation that would allow consumers to opt out of information sharing between their financial institutions and other parties, including affiliates. The current Republican chair, Sen. Phil Gramm of Texas, opposed it.

However, the fact that the Senate will be led by Democrats does not mean that any particular bill definitely will or will not become law. Indeed, it is more likely that we will return to the gridlock that often characterized the Clinton years, when the Democrats controlled the White House while the Republicans ran Congress.

Therefore, just as during the Clinton years, compromise is going to be required if any legislation is going to get passed the rest of this year and next.

Since he began campaigning for the White House, and especially since he took the oath of office, President Bush has talked the talk of bipartisan government. Now he must really walk the walk. Before the Jeffords defection, Bush could openly court Democratic support for his initiatives, but if push came to shove, he knew he could rely on his tie-breaking Senate vote by Vice President Dick Cheney to squeeze his bills into law. He no longer has that luxury. He will have to make Senate Democrats real partners to get anything accomplished.

But President Bush is going to need all the help he can get. That means insurance industry lobbyists are going to have to pay more attention to Democratic sensibilities in pursuing their agendas and in trying to shape legislation to their liking.


Reproduced from National Underwriter Life & Health/Financial Services Edition, June 4, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


Copyright 2001 by The National Underwriter Company. All rights reserved. Contact Webmaster