Retaining the employer-based, private health insurance system remains the priority for health insurance agents as the Senate continues what is expected to be a lengthy debate over health care reform legislation.
Officials of the National Association of Insurance and Financial Advisors/AHIA and the American Academy of Actuaries said that covering the uninsured should not come at the cost of making the current employer-based system unaffordable.
And for health insurance companies, the legislation proposed by Sen. Harry Reid, D-Nev., Senate majority leader, won’t serve to cut health care costs, say officials of America’s Health Insurance Plans.
“For six months, Washington has focused on health insurance plans’ administrative costs and profits, which account for 4.1% of national health expenditures, now is the time for Congress to focus on the remaining 95.9% of expenditures,” said Karen Ignagni, AHIP president and CEO.
“Pilot programs and timid steps to reform the delivery system are inadequate given the scope of the cost challenge the nation faces,” she said. “Without a roadmap for measurable cost savings across the entire system, health costs will continue to weigh down the economy and place a crushing burden on employers and families.”
Besides a so-called “public plan” which the industry regards as a non-starter, the legislation also contains provisions creating a long term care entitlement, as well as cuts in the Medicare Advantage program.
The Senate bill’s cuts in the Medicare Advantage program are not as steep as those proposed in companion legislation passed by the House on Nov. 7.
Moreover, the Senate bill contains no provision dealing with antitrust issues, as does the House bill. But, industry lobbyists cautioned that S. 1681, the Senate bill that would repeal the antitrust exemption afforded to health insurers under the McCarran-Ferguson Act, is likely to be introduced during the lengthy debate on the Senate bill.
At press time, in fact, Sen. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee, announced that he would introduce the McCarran repeal as an amendment to the Senate health bill.
Specifically, the bill, the Patient Protection and Affordable Care Act, is in the nature of a substitute to H.R. 3590, healthcare reform legislation passed by the House on Nov. 7.
Debate in the Senate began on Nov. 30. Reid launched the debate by saying that he will do everything he can to ensure the legislation passes through the Senate by Christmas.
He said the Senate could face late-night and full-weekend sessions to pass the overhaul. Reid spokesman, Rodell Mollineau, followed up by saying that Senate Democrats are “100 percent committed to getting this done by Christmas, no ifs, ands or buts.”
As the debate began, the Congressional Budget Office released a report suggesting that Senate bill could increase the cost of coverage for some U.S. residents who buy individual health coverage without help from subsidies.
However, for people receiving subsidies, the average nongroup premium would decrease 56% to 59%, CBO director Douglas Elmendorf said.
For group health plans, the average cost of coverage per covered life would be about the same under the PPACA rules and the current rules, Elmendorf said.
For small groups, proposed PPACA subsidies could make the per-life cost about 8% to 11% lower than it would if the current rules prevail, the CBO chief projected.
Tom Currey, president of the National Association of Insurance and Financial Advisors, reacted to the Senate bill, saying, “Attempts to cover the uninsured should not come at the expense of the employer-based system that currently covers 160 million Americans or raise premiums beyond affordable levels for those now covered.”
However, NAIFA, “remains eager to expand coverage and affordability for all,” Currey said.
Regarding the individual mandate, Cori Uccello, the senior health fellow for American Academy of Actuaries, said, “The individual mandate language should be strengthened.”
The AAA said that an effective and enforceable mandate will minimize adverse selection stemming from more restrictive issue and rating rules prescribed by the legislation.
Uccello explained that the “viability of health care reform depends on attracting lower-risk individuals, and strengthening the individual mandate through higher financial penalties increases the likelihood that these individuals will purchase coverage.”
In a note to members, lobbyists for the Council of Insurance Agents and Brokers, wrote, “It has always been our belief, based on the firm Democratic majority of 60 in the Senate, that the leadership will find a way to ultimately achieve passage of the legislation, notwithstanding the (courageous) opposition of a handful of Democratic senators to a “public plan” option – and notwithstanding a massive public outcry and backlash.”
But, the note said, “It is difficult, however, to envision at this time how this will play out, and it is more and more likely that the debate will spill into next year.”
In his comments, NAIFA’s Currey also disputed the need for a so-called “public plan” in the legislation and said the Senate bill does not address “the devastating results of allowing individuals to purchase coverage after they are ill or injured–essentially leaving everyone in the system “on claim.”
Currey also took issue with the Senate version of a long term care entitlement program, the so-called Community Living Assistance Services and Support Act, or CLASS Act.
“The new opt-out long term care program, with its daily benefit of $50-$75 is disappointing as it creates a sense of false security that is severely insufficient to meet the daily long term care for expenses now averaging some $200 per day,” Currey said.
He contended that “this creates a disincentive for individuals to plan properly for their long term care financing needs.”
Currey argued that, “As agents, we are the ones helping individuals and employers with their health insurance choices. We have more work to do because it’s our responsibility to remain ever-vigilant to ensure affordable choices are available.”