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Life Health > Health Insurance > Health Insurance

Senate Rejects Health Bill Pay Cap Amendment

By Allison Bell, Arthur D. Postal

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A majority of senators today voted to cap deductibility of health insurance company executive pay, but supporters failed to gather the 60 votes needed to win approval.

Senate Amendment 2905, offered by Sen Blanche Lincoln, D-Ark., attracted support from 56 senators, including Sen. Olympia Snowe, R-Maine.

The Democrats who voted against the amendment were Sens. Jeff Bingaman, D-N.M.; Thomas Carper, D-Del.; and Byron Dorgan, D-N.D. Sen. Joseph Lieberman, Independent-Conn., also voted against the amendment.

The amendment, proposed during the seventh day of floor debate on H.R. 3590, the Patient Protection and Affordable Care Act bill, would have limited the deductibility of health insurance company executive compensation to $400,000 per year.

Lincoln argued that her amendment would have helped encourage health insurance company executives to put patients’ interests first.

Since the early 1990s, she said, the percentage of health insurance companies’ revenue being spent on patient care has fallen to about 80%, from about 90%.

If the Lincoln amendment were law, the insurers would still “have the complete ability to pay what they choose,” but taxpayers would not be subsidizing excessive remuneration, Lincoln said.

Sen. Charles Grassley, R-Iowa, asked why the amendment would single out health insurance company executives.

“Why not limit compensation for other executives in other areas of health care?” Grassley asked. “What about the executives of hospitals? Why not executives of nursing homes? Why not executives of medical device manufacturers?”

The Lincoln amendment would not touch “drug company executives, because their industry cut a secret deal,” Grassley said.

Big pharmaceutical companies have agreed to support the bill in exchange for provisions that will help them, Grassley said.

Members of the Senate also voted 32-66 against Senate Amendment 2927, an amendment offered by Sen. John Ensign, R-Nev., that would have capped medical malpractice awards going to plaintiffs’ attorneys to one-third of the first $150,000 in compensation awarded.

Sen. Richard Durbin, D-Ill., said before voting began that medical malpractice plaintiffs’ attorneys already get paid 50% less than the defense attorneys.

Sen. Arlen Specter, D-Pa., said Congress ought to leave efforts to handle medical malpractice system problems to the states. Pennsylvania, for example, has limited the number of suits by requiring a plaintiff to get a doctor to certify that a case involved substandard care.

The Senate have voted 96-0 in the past few days for Senate Amendment 2926, an amendment offered by Sen. John Kerry, D-Mass., that would protect Medicare home health care benefits, and 97-1 for Senate Amendment 2899, an amendment offered by Sen. Deborah Stabenow, D-Mich., that would protect any Medicare Advantage benefits that are “guaranteed by law.”

Senators voted 51-47 for Senate Amendment 2901, an amendment offered by Sen. John Thune, R-S.D., that would have called for the government to “eliminate new entitlement programs and limit the government control over the health care of American families.”

The Thune amendment would have stripped the Community Living Assistance Supports and Services Act, from the Senate health bill.

Although a majority of senators backed the amendment, Thune needed a 60-vote supermajority to get it adopted.

The Democrats who voted for the Thune amendment were Sens. Max Baucus, D-Mont.; Evan Bayh, D-Ind.; Thomas Carper, D-Del.; Kent Conrad, D-N.D.; Mary Landrieu, D-La.; Blanche Lincoln, D-Ark.; Claire McCaskill, D-Mo.; Ben Nelson, D- Neb.; Mark Udall, D-Colo.; Mark Warner, D-Va.; and James Webb, D-Va. No Republicans who voted opposed the amendment.

Congressional staffers expect Nelson of Nebraska to introduce a CLASS Act amendment that would have an effect similar to the Thune amendment.

Insurers and others say the CLASS Act would be actuarially unsound and hurt the private LTC insurance system.

If the program were implemented as described in H.R. 3590, Americans would “become even more confused about their choices and option,” says Jesse Slome, executive director of the American Association for Long-Term Care Insurance, Westlake Village, Calif.

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For past coverage of the health bill floor action, please see:

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