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Life Health > Health Insurance > Health Insurance

'Health Reform-Lite' Seen As Likely

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Strong voter push-back over current proposals, cost concerns, the lack of political consensus and the death of Sen. Edward Kennedy, D-Mass., are likely to lead to Congress ultimately deciding to fall back to “health reform-lite” legislation, according to industry lobbyists and security analysts.

Whether and when Congress will be able to pass legislation reshaping the healthcare delivery system is the dominant question as legislators return to work Sept. 8.

Besides the continued role of agents in delivering healthcare, its cost, the timing of legislation, its impact on small business and whether it will include a public option are just some of the issues that remain to be decided.

“The agent/broker community shares many of these concerns, and continues to press for preserving access to the valuable services of our professional community,” says Janet Trautwein, CEO of the National Association of Health Underwriters.

National Association of Insurance and Financial Advisors/AHIA officials call health reform the “hottest of the hot issues” Congress will take up in the fall.

In addition, the long term care industry remains deeply concerned over a provision the industry believes would create an unfunded LTC entitlement.

The provision, called the Community Living Assistance Services and Supports Act, or CLASS Act, is contained in both the bill reported out by the Help, Education, Labor and Education Committee in the Senate and the bills produced by the so-called “tri-committees” in the House.

Regarding overall healthcare reform, the “jury is still out” as to whether Senate Finance Committee will meet its self-imposed deadline of Sept. 15 and produce a bipartisan bill,” according to Trautwein.

“But the Democrats’ continued reference to going a partisan reconciliation process route is likely to hinder efforts at consensus,” she says.

The other two bills, the HELP Committee and the House tri-committee bills, were produced without Republican support. The HELP Committee bill was referred to the Senate Finance Committee, while the bill produced by the three House committees remains to be reconciled.

The death of Sen. Kennedy will be a key factor, officials say.

“What he brought to the table was the ability to make compromises and get Democrats in his caucus to go along with it,” says Trautwein. “They may not have liked it, but they’d do it.”

NAHU’s concern, Trautwein says, is that “the passing of Senator Kennedy may encourage some to act quickly in a very partisan fashion.”

However, Kennedy’s true legacy “was his ability to bring stakeholders together and reach across the aisle in a very bipartisan fashion,” she notes.

In a note to investors, analysts at Washington Analysis, which advises brokerages and hedge funds, supported Trautwein’s analysis.

They say they don’t believe Kennedy’s death will move the ultimate bill to the left, that is, to a mandated “public option.”

“The polls, town hall outcry, 10-year deficit numbers, and recent statements argue for a more moderate direction or a more modest direction,” the analysts say.

These would include fixing Medicare payments to doctors; Medicare/Medicaid changes dubbed “cost containment” baby steps, and possible expansion of Medicaid, says analyst Beth Mantz-Steindecker.

“Such a Plan B amounts to basically doing little overhaul but the Democrats are likely to advertise such a bill as the “next installment of healthcare reform,” the analysts say.

In comments in mid-August, Rep. Stenny Hoyer, D-Md., House Majority Leader, withdrew predictions that the House would certainly vote on a combined bill by the end of the month.

At NAIFA/AHIA, officials said they hope Congress emerges from August convinced that the government-run “public option” plan is so controversial that the idea should be dropped from any reform measures going forward.

At the same time, NAIFA/AHIA officials say they are “pleased that all four bills passed so far by congressional committees either positively support the role of agents in helping businesses and individuals navigate any new system or are neutral on the point.

“NAIFA/AHIA urges the Senate Finance Committee to allow for a meaningful role for agents in any reformed system,” they add.

The American Council of Life Insurers says the CLASS Act provision “is a very live issue for ACLI and a serious concern, particularly the long-term sustainability of the CLASS Act and the significant potential for confusion among consumers about what the CLASS Act will do and the need for individuals to plan for their long-term care needs.”

Jesse Slome, executive director of the American Association for Long-Term Care Insurance, says the provision is “well intentioned,” but “was so skewed in favor of the plan’s proponents, that it was financially unviable even before the first applicant was taken.”

He called the provision “the first step toward another underfunded government entitlement program disguised initially as a voluntary option.”

Slome says that instead of a two-class structure of those Americans familiar with the need for LTC products (prepared and unprepared), CLASS would create “three societal castes, prepared, unprepared and insufficiently prepared.

“That is not a change in the right direction nor a solution that is in the best long-term interest of the nation,” he says.

AALTCI is “encouraging our members to communicate their concerns to the appropriate members of Congress.

“It’s our hope that logic and reason will prevail, and this provision will be omitted from any final health care legislation,” he adds.

That said, AALTCI “would certainly be for final legislation to call for a detailed study of options to finance the burgeoning need for long term care.”

The study, Slome says, should include what tax incentives and other legislative and regulatory actions will provide the private sector with the means to give Americans the tools to deal with long-term health problems.


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