HR Hero Line

Senate Finance Committee Maps Routes to Health Care Reform

Health care industry leaders — including some who opposed the Clinton administration’s 1993 health care reform efforts — are now pledging to rein in the rate at which costs increase. President Barack Obama did a one-hour interview and town-hall style discussion about health care reform on prime time network TV this week. Lawmakers promise quick action. The president tells how spiraling health care costs weight down the economy. Bits and pieces of information on this topic emerge almost nonstop these days. During the new few weeks, we’ll look at different aspects of the health care reform proposals in Congress and how they could potentially affect employers.

Keep up to date on changes in benefits and compensation law with Benefits & Compensation Law Alert

Senate Finance Committee game plan
Just as with the many tax-and benefits-policy tentacles of the American Recovery and Reinvestment Act (commonly called the federal stimulus package), it could take a long time to untangle the full effects of any final health reform measure. Amid all the talking points, however, key issues are emerging from the Senate Finance Committee on the possible shape of a new health care system for the United States.

Among the possibilities: an increased push for wellness and disease-management initiatives, pay-or-play health coverage mandates for employers, changes to the tax structures underpinning health benefits, and greater coverage under government programs. To the extent that public health coverage plans become more available, employees may shift out of employer-provided plans and alter the expense landscape for employers. The effects of tax system changes could be far-reaching.

The Senate Finance Committee has been outlining major health care reform issues and approaches to resolving them in three reports called potential option papers. The first paper, issued on April 28, deals with reducing costs and improving quality in the health care delivery system. The second paper, issued on May 11, covers options for expanding health care coverage to uninsured people. The third and final paper, on financing health reform was issued on May 18. During the next few weeks, we will examine the policy options discussed in these papers, which are available online at http://finance.senate.gov.

Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) had said they intended to mark up comprehensive health care reform legislation as early as June, but that appears likely to change. The Congressional Budget Office (CBO) recently released a preliminary estimate of the draft Baucus plan putting the cost at $1.6 trillion over 10 years. Senator Baucus is now saying that he will unveil his health care reform proposal after July 4. And Senator Grassley said Sunday, June 21, that the committee may revise its plan in order to strengthen support for the bill.

Much of the rhetoric has focused on creating a government-run plan that would compete with private health care plans. Interesting, a New York Times/CBS poll released last week shows that 72% of Americans support a government-administered health care plan that would compete with private insurers.

Audit your health benefits policies and practices with the Employment Practices Self-Audit Workbook

Common themes, timeline
Senators Baucus and Grassley say the option papers are “intended to offer potential options for discussion and to provide an opportunity for other options to be offered and discussed.” The papers were prepared after roundtable discussions were held on each subject area, and the options are intended to build on best practices in the field, as Grassley noted. The two senators are jointly offering the proposed options, even though they may not agree on all of them. There’s no indication in the papers of which options the senators agree on and which remain an issue.

Many suggested options build on existing federal programs, such as Medicare and Medicaid. Several options also reflect the experience of Massachusetts, which in 2006 enacted a law that required its citizens to obtain health coverage through an insurance marketplace called the Health Insurance Connector. The Finance Committee’s options abound in incentives, particularly through the tax system. Wellness programs, preventive medicine, better management of chronic diseases, and tying provider payments to patient outcomes are also among the options. The devil will be in the details of how these broad-brush concepts are implemented, employer by employer, and person by person.

January 1, 2013, is a major date in the health care reform proposals. Once option, for example, envisions federal rating rules (governing how insurers may price health insurance to account for individual or group health risks) for certain individual and small group plans taking effect on that day (or earlier if possible). Also taking effect on January 1, 2013, would be tax credits for low-income taxpayers’ health coverage and a proposal similar to the Massachusetts plan that would require all individuals to purchase health coverage.

Other proposals would take effect “soon after enactment” of health care reform, including one proposal for state Medicaid programs to raise the income eligibility requirements to allow more pregnant women, children, and parents to enroll.

In short, it’s clear from the option papers that many health-reform initiatives will take time to implement and phase in.

HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including documentation issues such as performance evaluations

Leave a Reply

Your email address will not be published. Required fields are marked *