WASHINGTON BUREAU — Insurance groups are continuing to warn that implementing H.R. 3590, the Senate health bill, as written would drive up private market health care costs significantly.

The groups are voicing those concerns as the Senate prepares for a series of procedural votes on H.R. 3590 scheduled for today and a vote on passage of the bill scheduled to start sometime after 8 a.m. Thursday.

The Patient Protection and Affordable Care Act bill is set to come up at that unusually early hour to give senators time to get home for Christmas, congressional staffers say.

“The finish line is in sight,” Sen. Max Baucus, D-Mont., said Tuesday. “We’re not the first to attempt such reforms, but we will be the first to succeed.”

PPACA bill supporters already are preparing to start reconciling the vastly different House and Senate versions of the health bill early next year.

Officials at Washington Analysis, Washington, which advises institutional investors, say that, given the difficulty Democrats have had with getting the 60 votes needed to pass a health in the Senate, it is likely that the final product will resemble H.R. 3590.

Janet Trautwein, chief executive officer of the National Association of Health Underwriters, Arlington, Va., says the Senate health bill “contains many provisions that will drive up private health insurance costs significantly for millions of Americans families and businesses and disrupt the quality coverage on which millions of Americans rely.”

Minimum loss ratio requirements added to the legislation last week “will significantly and negatively impact coverage choice and affordability,” Trautwein says.

Although NAHU’s members “agree with the goal of providing consumers with more value for health care dollars spent, the 80%-85% minimum loss ratios required for the individual and group markets in this bill far exceed any similar state-level requirements,” Trautwein says.

The requirement does not take into account the need to address the underlying drivers of health care costs, Trautwein says.

The section of the Senate health bill that would require most individuals to own health insurance, is unworkable, Trautwein adds.

“If the individual mandate is not effective or enforceable, people could wait to buy coverage until they get sick, causing premiums to skyrocket significantly for everyone,” Trautwein says.

NAHU does like a section of the Senate bill that would ensure that licensed health insurance agents would have a role in the proposed state insurance exchanges, Trautwein says.

But “we would like to see these provisions expanded and clarified to ensure that all policies provided through the exchanges be available for purchase through an agent or broker,” Trautwein says.

The Council of Insurance Agents and Brokers, Washington, also will be seeking to clarify the producer access language, CIAB officials say.

The current, amended version of H.R. 3590 does not include the kind of government-run “public option” health plan that the House health bill, H.R. 3962, would create. Instead, the bill would require the U.S. Office of Personnel Management to administer individual and small-group plans that would be supplied by private carriers and sold through a proposed state insurance exchange distribution system.

The OPM program “is designed to assure that each exchange has at least two private market options for each market sector,” CIAB officials write in a note to members. “While we are still analyzing this provision, our first instinct is to think of this as a federal certification for private insurers (who may band together under this proposal) to offer qualified plans nationwide.”

The Senate now has amended a proposed $2,500 cap on flexible spending account contributions to index the cap for inflation, according to officials at the National Association of Insurance and Financial Advisors, Falls Church, Va.

“Ideally, we would have liked to have seen the cap raised, but to the extent they wouldn’t raise the cap, we at least were able to ensure that the FSA arrangements are indexed to inflation,” says Diane Boyle, a vice president at NAIFA.

Otherwise, she says, “you are going to run into the same problem you have with the [alternative minimum tax].”

But the Senate bill and the House bill both include the Community Living Assistance Services and Supports Act, or CLASS Act. Insurance groups — and the chief actuary for the federal Centers for Medicare and Medicaid Services — say the LTC entitlement program that the act would create would be unsustainable.

The program would offer weaker benefits than private LTC insurance plans, and it would add to Americans’ confusion and false sense of security about meeting LTC needs, Boyle says.

“We have a population that now believes that Social Security provides for LTC needs, and that is simply not true,” Boyle says.

Even while the Bush administration was in office, officials in the federal Office of Management and Budget had suggested that the government should consider taxing group health benefits. H.R. 3590 would not impose a direct, general tax on group health insurance.

The Senate bill also would push the effective date of a proposed tax on health insurers to 2011, from 2010, and the highest taxes would be in the out years, Boyle says.

But the bill would impose a tax on those who earn over $250,000, Boyle says.

The bill also would impose a 40% excise tax on health insurers when the insurers sell high-value, “Cadillac health plans.”

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Once the Senate votes Thursday morning, we plan to post a story about the vote here.

For more recent H.R. 3590 coverage, please see Final H.R. 3590 Vote Moved To 7 A.M. Thursday.

For earlier H.R. 3590 coverage, please see: