Health Reform Moves Forward in the Senate


10-14-09, 9:36 am

After an eleventh hour push by health insurance lobbyists to derail reform by threatening to raise premiums if a reform bill passes, the Senate Finance Committee passed its version of a reform bill with a bipartisan majority, October 13. Most commentators regarded approval of the reform bill by this committee as the biggest barrier to passage of reform in this session of Congress.

Just days before the crucial committee vote, however, the Association of Health Insurance Plans (AHIP), one of the most powerful lobbying arms on Capitol Hill, released a report claiming that the Senate reform bill would 'force' the insurance industry to raise premiums.

In his comments before the committee, Sen. Jay Rockefeller, D, W.Va., described the report as 'misleading' and as little more than an attempt to hustle opposition to health reform. Rockefeller, who failed in his attempt to add a public insurance program by amendment, stated that he supported approval of this bill in order to move the process to the Senate floor where such amendments could be added.

Rockefeller pointed out that without reform, insurance companies have raised premiums by 131 percent since 2000, reaping a growth in profits of 428 percent. He described the concern over whether insurance companies will make enough money after reform as 'absurd.' The arbitrary push for higher premiums and higher profits exemplifies 'corporate gain at its worst,' Rockefeller explained.

Sen. Robert Menendez, D-N.J., agreed. The AHIP report is 'bogus' and little more than an attempt 'to play the fear card' against Americans who are worried about the rising cost of health insurance. Menendez, too, expressed his support for a public insurance program in order to provide meaningful competition for the out of control insurance industry.

Rose Ann DeMoro, executive director of the California Nurses Association/National Nurses Organizing Committee slammed the insurance industry report. 'Our legislators should respond to this bullying and stop coddling a useless industry whose sole function is to make enormous profits from the pain and suffering of patients while providing little in return,' she said in a press statement.

A group of health policy experts from several think tanks and major universities denounced the AHIP report as 'flawed' and lacking credibility. The report 'simply ignores this massive source of savings for millions of American households,' they pointed out.

In a blog post Monday Oct. 12, economist Dean Baker castigated media outlets who gave so much prominence to what he described as an 'obviously biased' report from the insurance industry.

Despite the serious flaws in the AHIP report as well as its obvious industry bias, congressional Republicans continued to push the report's findings on Capitol Hill and in the media as though it represented the unbiased findings of objective experts.

Democratic Senators charged Republican opponents of the bill with favoring keeping the broken health system as is.

Congressional Budget Office analysis of the Finance Committee bill found that it would reduce the deficit once implemented.

One of the biggest funding components of the Finance Committee is through imposing a tax on high-cost health insurance plans. Labor union leaders oppose portions of this measure because workers in high risk industries have employment health packages that fall into the price ranges included in the Senate Finance Committee bill.

International Association of Fire Fighters President Harold Schaitberger expressed 'strong opposition' to the tax on high-priced insurance benefits. Insurance companies will simply shift the cost of the taxes to the beneficiaries, he argued. This proposal is unfair for firefighters, he explained, as their employment benefits 'cost more because of the dangers associated with their jobs, not necessarily because they offer more generous benefits.' Schaitberger urged the Senate to consider the revenue sources that are in the House version of the reform bill.

The House version of the creates a surcharge on the highest incomes in the country in order to achieve a revenue neutral reform package.

In a statement to the press following the vote, President Obama praised the efforts of the committee saying, brings 'us significantly closer to achieving the core objectives I laid out early in September.' He added, however, 'this bill is not perfect and we have a lot of difficult work ahead of us. There are still significant details and disagreements to be worked out over the next several weeks.'

The passage of the Senate Finance Committee allows the process to move forward. Democratic leaders in the Senate will combine the two reform bills in the coming weeks.

Supporters of the public insurance program see this part of the process as key to including that basic feature of meaningful reform in the final package. Likely, compromise proposals will become part of the final bill. For example, some Senators, including the lone Republican supporter of the bill, Sen. Olympia Snowe, R, Me., have signaled support for a 'trigger' plan. Under this plan, a public insurance program would be implemented a few years down the road when private insurance companies fail to bring down the cost of care or expand coverage on their own.