Challenges Slowing Health Care Reform Drive

By Staff Report

Aug. 24, 2009

Federal health care reform legislation is ailing, but experts and observers say it’s far from dead.

When the health care reform drive began early this year, Obama officials and Democratic congressional leaders brimmed with optimism.

They predicted fast congressional action, with the House and Senate approving bills by the August recess, differences in those two bills being ironed out during the break and a final measure going to the president by mid-September or early October.

Although President Barack Obama last week predicted such legislation will pass Congress by year’s end, the reform drive still seems to be in trouble, Washington observers say.

The House has yet to take up a bill already approved by three House committees.

In the Senate, the pivotal Finance Committee has struggled for months to hammer out a package that will attract support from at least a few of the committee’s Republican members, with no sign of an imminent agreement. Until that committee acts, the full Senate can’t take up a bill.

Meanwhile, public support for reform legislation has slipped. A poll earlier this month by the Kaiser Family Foundation found that just 45 percent of respondents believe the U.S. would be better off if Congress passes reform legislation, down from 51 percent a month earlier.

At the same time, some congressional backers of reform legislation were shouted down during town hall meetings during the past few weeks.

‘Something will pass’
Despite the delays in congressional action and rising public concerns, Washington observers and others say the reform effort is far from dead.

“In the end, a version of reform legislation will pass. There is too big a risk to both sides” if a bill isn’t approved, said Frank McArdle, a consultant in the Washington office of Hewitt Associates Inc.

“The Democrats will be perceived as being unable to deliver, while Republicans will be portrayed as obstructionist,” McArdle said.

“At the end of the day, something will pass,” said Chantel Sheaks, a consultant with Buck Consultants in Washington.

“Reform is very much alive, but we are far from knowing the final outcome,” said Kathryn Wilber, senior counsel-health reform with the American Benefits Council in Washington.

But a final bill is likely to be significantly different and slimmed down from the one approved by the House panels and the Senate Health, Education, Labor and Pensions Committee.

“We are going to see a scaling back,” said Steve Wojcik, vice president of public policy with the National Business Group on Health in Washington.

The most likely provision to be scaled back is setting up an optional public health care plan.

Establishing such a plan—dubbed by former Vermont Gov. Howard Dean as Medicare for the nonelderly—has stoked fears that it would drive out private plans and ultimately lead to a single-payer system. Some say it is certain that the provision will be revamped, if not eliminated.

The idea of a public plan option has been pretty much ended,” Wojcik said.

Others see nonprofit health care cooperatives replacing a public health plan in the reform legislation.

“If I were a betting man, I’d see co-ops as a compromise” proposal that could win congressional passage, said Michael Thompson, a principal with PricewaterhouseCoopers in New York.

Buck Consultants’ Sheaks said one scenario that could develop is Congress passing insurance underwriting reforms and possibly an individual coverage mandate this year, leaving tougher issues for next year or later.

Such reforms, which have no serious opposition, could include a ban on excluding pre-existing medical conditions in the personal lines market. Congress in 1996 curbed the use of such exclusions, but only in the group market, as part of a broader law.

Provisions may fail
Other reforms legislators might embrace include guaranteed issue and renewals.

At the same time, provisions now in the bills that are not directly related to health care reform might be discarded as legislators move to slim the measures and defuse business opposition. Some provisions include making it more difficult for employers with retiree health care to reduce benefits, expanding COBRA health care continuation coverage and giving states the ability to create single-payer systems.

“In order for a bill to be successful, it will have to be one that is more moderate and be something that employers will feel comfortable with,” McArdle said.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail

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