3 Ways Federal Life, Health and Annuity Legislation Could Evolve Now

Major news organizations said Wednesday that two Democrats, Raphael Warnock and Jonathan Ossoff, were the winners of Tuesday’s Senate runoff elections in Georgia.

Protesters who said they were supporting President Donald Trump later broke into the U.S. Capitol and shut down activities there for hours.

Other protesters who said they were supporting the president organized protests that disrupted government operations in Georgia, Kansas, Utah and other states.

(Related: U.S. Capitol in Lockdown, Pence Evacuated as Protesters Surge)

Many things about how Washington will work may now be less certain than they seemed just a few weeks ago.

Assuming that Biden soon takes office as president, and that Democrats can, with the help of Vice President Kamala Harris, hold a 51-vote majority in the Senate, in Congress — and that Congress operates more or less as it has in the past — insurers, financial professionals and industry groups will want to find a way to move back toward toward policymaking.

Here are three ideas about how life insurance, annuity and health insurance policymaking in Washington could work this year.

1. Recent events may increase the odds that President-elect Joseph Biden and other Democrats can pass legislation through “regular order.”

Supporters of a bill need a majority in the House and 60 votes in the Senate to get ordinary bills through Congress, through “regular order” proceedings.

Supporters need a majority of the votes in the House and only a majority of the votes in the Senate to get some budget bills through Congress.

Because of growing partisan gridlock, members of Congress have structured a growing number of proposals as amendments to giant, “must pass” budget bills, rather than as stand-alone bills. Congressional leaders often assemble the giant omnibus bills quickly, and members of Congress say they often have only a hazy idea of what’s in the omnibus bills.

In December, for example, the president signed H.R. 133, the bill that created the Consolidated Appropriations Act 2021 (CAA 2021) package, just a week after congressional leaders posted a difficult-to-search 5,593-page draft of the package on the web.

Important sections, such as a provision that changed the interest rate benchmarks used in the official Internal Revenue Service definition of “life insurance,” became law with little notice.

Moreover, to fit measures in budget packages, lawmakers must craft the measures to comply with the rules that govern budget packages.

If recent events increase federal lawmakers’ interest in passing bipartisan legislation, that could help insurance industry groups get stand-alone bills through Congress. Interest groups would get a chance to comment on bills at hearings, and lawmakers would go over bill details during public markup sessions.

If, however, partisanship increases, or stays about the same, giant budget bills could become more important than ever, with lawmakers, congressional staffers and interest groups making more open, more formal efforts to tailor measures to fit into the giant budget bills.

2. Any new emphasis on bipartisanship could be good for life and annuity bills.

Groups such as the American Council of Life Insurers, the National Association of Insurance and Financial Advisors and Finseca have spent decades developing bipartisan legislative affairs strategies.

As a result, they have been able to attract both Democratic sponsors and Republican sponsors for efforts to get the Secure Act legislation through Congress, and for the new Secure Act 2.0 proposal.

If partisan gridlock persists, that could increase the focus on proposals that can be implemented with amendments that look like budget changes, such as changes in tax or deductibility rates, and decrease interest in proposals that are hard to mesh with budget bill rules, such as proposals that might require the creation of major new government agencies, and proposals that have nothing to do with government spending.

3. Medicare, Medicaid and long-term care finance bills might have an easier time than ambitious major medical insurance bills.

In recent years, lawmakers have been able to get some health insurance measures with bipartisan support, such as the 21st Century Cures Act, through Congress.

The new CAA 2021 package includes “surprise medical billing” sections and health care price transparency provisions that had bipartisan support.

But Republicans have not been able to pass many bills that make major changes to core Affordable Care Act commercial health insurance programs.

Democrats may now face similar problems with getting major medical insurance programs through Congress.

During the Congress that just ended, the 116th Congress, only 14 of the 48 senators who were Democrats, or who were independents who caucused with the Democrats, signed on as cosponsors of S. 1129, Sen. Bernie Sanders’ single-payer “Medicare for All” health finance bill.

Some of the Democrats who will be new to the Senate in the 117th Congress have made a point of saying that they want to update the Affordable Care Act, but that they do not want to move the United States to a single-payer health finance system. Warnock and Ossoff, for example, have said that that they oppose Sanders’ approach to creating an entirely government-run health finance system.

That may be a sign that Democrats in the new Congress will have trouble either passing a Medicare for All bill or, conversely, repealing the Affordable Care Act and returning the country to a framework that’s similar to what was in place before 2010.

Measures to maintain and improve Medicaid and Medicare benefits have had some bipartisan support. Members of the 117th Congress may see Medicaid and Medicare as good targets for efforts to bring Democrats and Republicans closer together.

The effects of COVID-19 on nursing homes, the fact that Biden is 78, and the fact that several senators are over 80 may also increase lawmakers’ interest in efforts to improve support for home care and adult daycare services, and to create new mechanisms people can use to pay for long-term care services.

If partisan gridlock persists, then health insurance policymaking may focus mainly around efforts to protect Medicaid against budget cuts, and to develop the bills needed to keep Medicare from becoming insolvent.

— Read 5 Kinds of Bills Biden Might Be Able to Get Through Congress, on ThinkAdvisor.

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