WASHINGTON BUREAU — Insurance producer groups are blasting H.R. 3962, the House health bill, and saying they hope the Senate will come up with something better.

Members of the House voted 220-215 shortly after 11 p.m. Saturday to pass the Affordable Health Care for America Act bill.

The next step for health bill efforts is the Senate, where Senate Majority Leader Harry Reid, D-Nev., is going over S. 1679, the Affordable Health Choices Act bill, a bill drafted by the Senate Health, Education, Labor and Pensions Committee under the aegis of the late Sen. Edward Kennedy, D-Mass., and S. 1796, the America’s Healthy Future Act bill, which was developed by the Senate Finance Committee under the guidance of Sen. Max Baucus, D-Mont.

Producer groups may have anywhere from a few days to a few weeks to make their voices heard and influence the Senate bill.

THE SCHEDULE

Reid could unveil the Senate Democrats’ bill, and a Congressional Budget Office score of the bill, this week, according to Beth Mantz Steindecker, an analyst at Washington Analysis, Washington. The CBO score is critical, because many members of Congress, including a number of Democrats, have said they will refuse to sign a health bill that increases the federal budget deficit.

The Senate will adjourn for the week Wednesday, in observance of Veterans Day.

If Reid gets a CBO score this week, that probably means that the earliest a Senate health bill could reach the Senate floor would be the work week starting Nov. 15, Mantz Steindecker says.

Mantz Steindecker predicts that the Senate will need a minimum of two weeks for debate. With the Thanksgiving recess, which will last from Nov. 23 to Nov. 27, that means the earliest a vote in the Senate could occur would be the week starting Dec. 6. Conferees would then have a mere two weeks to pass the bill before the winter recess.

“Given that we don’t know when Reid will drop his bill, and Republicans are promising to slow down the floor debate with amendments, a more likely scenario is that the Senate passes a bill by the end of the year, and the final bill is enacted next year before the State of the Union, which usually occurs in late January,” she says.

H.R. 3962 and the surviving Senate health bills would expand Medicaid; require health insurers to sell coverage on a guaranteed-issue, mostly community-rated basis; and set up a “health insurance exchange” system to help consumers and small groups shop for standardized health benefits packages.

Unlike S. 1796, but like S. 1679, H.R. 3962 would create a new public health plan option and make public option coverage available through the proposed exchange system.

H.R. 3962 would fund itself partly by imposing a 5.4% surtax on individuals with annual incomes over $500,000 and couples with annual incomes over $1 million; S. 1976 would raise revenue by imposing a 40% excise tax on “Cadillac health plans.”

PRODUCER GROUPS WEIGH IN

The National Association of Insurance and Financial Advisors, Falls Church, Va., says that one H.R. 3962 provision would repeal the McCarran-Ferguson Act for health and medical malpractice insurers, and that another would give the Federal Trade Commission the authority to oversee all lines of insurance.

A manager’s amendment added to the bill would give the FTC the authority to study potential anti-competitive practices by health and medical malpractice insurers.

The possibility of expansion of FTC authority is of particular concern to the property-casualty industry. The FTC has been conducting a study of the fairness of credit scoring practices used by the industry to price personal lines policies.

The FTC has been barred since the early 1980s from regulating the insurance industry, but, under pressure from House Democrats, it began looking in early January at how credit scoring data is used in setting personal lines premium rates.

The Independent Insurance Agents and Brokers of America, Washington, says the 5.4% surtax included in H.R. 3962 would really be a new tax on small business owners who file as individuals.

The public option plans that would be created by H.R. 3962 and the Senate HELP bill would compete unfairly with private plans, and H.R. 3962 also would add a new Small Business Administration grant program that would, in effect, create new, unfair competition for agents and brokers in the small group health market, IIABA says.

“As the Senate and House move to conference, the IIABA urges Congress to reconsider what this bill will do to consumers and small businesses,” IIABA President Robert Rusbuldt says.

The Council of Insurance Agents and Brokers, says H.R. 3962 would hurt employer-provided health benefits.

The bill “creates a government program that would not compete fairly and could acquire nearly 120 million Americans that could otherwise balance private risk pools,” says Joel Kopperud, CIAB government relations director.

The bill “limits premium variations so much that healthy behavior could not be rewarded with lower premiums,” and “the resulting spike in costs may be enough to incline employers to pay a penalty rather than continue offering benefits,” Kopperud says.

The Self-Insurance Institute of America, Simpsonville, S.C., is trying to draw attention to an H.R. 3962 provision that would levy a tax on all employer-sponsored health plans.

The tax revenue would be used to fund comparative effectiveness research, and to determine “the extent to which rating rules are likely…to encourage small and mid-size employers to self-insure,” Michael Ferguson, the chief operating officer of the SIIA, says.

***

For other health bill coverage, please look at these stories:

***

ATTENTION: If you stayed up late Saturday watching the House vote on H.R. 3962, and you read this article down to here, then, seriously: you need our new Health Care Reform Watch newsletter. Please go to http://www.lifeandhealthinsurancenews.com/HCRW/Pages/default.aspx