Barack Obama

Today (Feb. 22), the White House unveiled the president’s proposal for health care reform, which bypasses a public health insurance option favored by the House, and instead promotes health insurance exchanges where private insurers will compete for business based on cost and quality, according to a copy of the proposal. The plan will cost an estimated $950 billion over the next decade, but would reduce the deficit by $100 billion over the same time frame, according to the White House.

Another feature of the plan includes the creation of a new Health Insurance Rate Authority, providing federal assistance to states in conducting reviews of “unreasonable” rate increase requests, according to the White House.

In Obama’s plan to reduce the number of uninsured Americans is a middle class tax cut, reducing premium costs for millions of families and small businesses and aiding 31 million in accessing coverage, according to the White House.

While the House and Senate bills seek to increase competition for private insurers to drive down costs  – through a public option and increasing Medicare coverage – the president’s plan lowers premiums for families of four with incomes between $22,000 and $88,000. It also gives families with earnings below $55,000 extra cost sharing assistance.

The proposal includes an individual mandate to secure coverage, with exemptions for hardships. It mirrors the Senate bill by forgoing a mandate on employers to offer or provide insurance, but does require them to help defray the cost if taxpayers are “footing the bill for their workers,” the proposal states, enacting a $2,000 per person fine for large businesses not aiding employees.

In what can be seen as a break for insurance companies, the president’s plan also delays and reforms proposed taxes on high-cost insurance plans and a proposed $67 billion assessment on insurers. Under the president’s plan, the effective date for excise taxes on so-called “Cadillac” health plans is delayed from 2013 to 2018 to allow more transition time. The proposal would raise the amount of premiums exempt from the assessment for individuals from $8,500 to $10,200, and from $23,000 to $27,500 for families.

In his weekly address, Obama continued the administration’s focus on health insurance companies, calling for Democrats and Republicans to come together to aid the American public and enact strong changes.

“The bottom line is that the status quo is good for the insurance industry and bad for America,” Obama said in the address. “Over the past year, as families and small business owners have struggled to pay soaring health care costs, and as millions of Americans lost their coverage, the five largest insurers made record profits of over $12 billion. And as bad as things are today, they’ll only get worse if we fail to act.”

Timing of proposal details

The White House report comes a few days before a televised bipartisan health care summit to iron out a final piece of reform legislation and just days after a report highlighting insurers’ premium hikes as a key reason for reform.

The report, by the U.S. Department of Health and Human Services, noted several insurers across the nation and their recent premium increase requests amid billions in profits for the companies making the requests. HHS Secretary Kathleen Sebelius said in a statement that while families are struggling, insurance companies were not and that is a key reason for reform.

In response to the report, America’s Health Insurance Plans (AHIP), representing nearly 1,300 insurers, again reiterated its stance of more than a year now that reform must focus on the entire health care system and not just health insurance.

“It’s time to stop the politics of vilification and focus on what Americans need most: real health care reform that addresses the serious and urgent problems facing our nation,” said AHIP President and CEO Karen Ignagni said in a statement.

The rising premiums, Ignagni said, are due to “soaring medical costs and because younger and healthier people are dropping their coverage due to the economy.”

AHIP did not immediately have a statement in response to the president’s health plan plan proposal.

Additional details

Other details of the plan, available online, are:

• Eliminating Nebraska’s Medicaid exemption, secured during the Senates’ negotiations over their health care bill;
• Closing the Medicare prescription drug “doughnut hole,” by replacing the $500 increase in the initial coverage limit with a $250 rebate and phasing down the coinsurance so it is the standard 25% by 2020 throughout the coverage gap;
• Strengthening provisions to fight fraud, waste and abuse in the Medicaid and Medicare systems;
• Investing $11 billion in community health centers;
• Broadening the Medicare Hospital Insurance tax base for high-income taxpayers by adding a 2.9% assessment on income from interest, dividends, annuities, royalties and rents on taxpayers making more than $200,000 as individuals and $250,000 for married couples; and
• Aiding states in the cost of Medicaid and the Children’s Health Insurance Program (CHIP).

Obama’s health reform plan omits public option, targets premium hikes via IFAwebnews.

Pat Mullins

Republican Party Chairman Pat Mullins applauded the Senate’s approval of three bills rejecting any individual mandate to buy health insurance that could result from a health reform bill approved by both chambers of Congress. The Virginia bills were authored by Republican senators Stephen H. Martin (SB 311), Frederick M. Quayle (SB 283) and Jill Holtzman Vogel (SB 417).

The three bills passed in the Senate 23-17 today (Feb. 1). Five Democrats opposed the measure: Charles Colgan (29th District), R. Edward Houck (17th District), John Miller (1st District), Phillip Puckett (38th District) and Roscoe Reynolds (20th District).

“When Republicans asked Senate Democrats to join them in standing up against federal overreach, five decided to put the rights of their constituents ahead of the wishes of Washington, D.C.,” Mullins said in a statement regarding the bills.

All three measures ban any federal mandates for coverage, as well as exempt state residents from any “penalty, assessment, fee or fine” as a result of failing to secure insurance.

“Even Democrats in the Virginia Senate realize that the health care nightmare being negotiated behind closed doors across the Potomac is bad news for their constituents,” Mullins said.

He singled out the state’s Democratic congressmen, Reps. Tom Perriello and Gerry Connolly, who supported the House’s bill to establish a public health insurance option to compete with private insurers in a federal marketplace and an individual mandate.

“[Today’s] vote shows again that Reps. Perriello, Connolly and the rest of the Democrats in Washington, D.C., aren’t listening to their employers – the voters of the Commonwealth of Virginia,” he said.

The bills now advance to the Virginia House for its approval.

Va. Republicans applaud passage of bills rejecting health mandates via IFAwebnews.

Robert G. Marshall

Del. Robert G. Marshall (R-13th District) has filed the “Virginia Health Care Freedom Act” (HB 10), which would “protect an individual’s right and power to participate or decline to participate in a health care system or plan,” according to a summary of the bill.

“Mobsters used to offer ‘protection’ to business owners, so when Congress says that if individuals don’t become customers of businesses that contribute to them, to me that crosses the line,” Marshall told IFAwebnews.com. “For me, it is hard to distinguish what is going on in Washington, D.C., from criminal activity.”

The proposed legislation would also prohibit penalties, taxes or fines upon those who decline to sign a contract with an insurer for health coverage. The only exception, according to the text of the bill, is if a court requires coverage as part of a judicial dispute.

The bill’s language also protects “entities” from mandatory health care purchases, which flies in the face of possible employer mandates to provide insurance for employees or pay a payroll tax.

Marshall said he is confident the measure will pass the Virginia House, but thinks Senate Democrats will hold up the bill.

Marshall has found an ally in former Virginia Attorney General Bill Mims, who also said he believes the mandate “is open for constitutional challenge,” according to the Richmond Times Dispatch.

In a statement accompanying the introduction of the bill, Marshall said that the measure has been introduced in the Virginia General Assembly, which began Jan. 13, and “can be introduced in other state legislatures in 2010.”

He told IFAwebnews.com that state legislators in New Hampshire, New York, North Carolina and Pennsylvania have contacted him about duplicating the measure in their jurisdictions and a legislator in Iowa recently discussed the bill on a radio program.

“Forcing citizens to purchase private insurance violates the compact between elected representatives and citizens reducing government ‘of, by and for the people,’ to demands of lords over subjects,” Marshall claims. “It is the usurpers in Washington who propose to alter self government under the guise of health care reform.”

Since this article was printed, Marshall’s bill was approved by a subcommittee of the House Committee on Commerce and Labor for review by the full committee.

This story originally appeared in the February 2010 print edition of Insurance & Financial Advisor.

Virginia lawmaker says Congress like ‘mobsters’ forcing health mandates via IFAwebnews.

Jim Clark

Rep. Jim Clark, a Republican for Idaho’s 3rd District, has proposed the Idaho Health Freedom Act, which finds that “Idaho is and shall continue to be free from government compulsion in the selection of health insurance options, and that such liberty is protected by the Constitutions of the United States and the State of Idaho,” according to the bill’s statement of purpose.

Meanwhile in Florida, the state’s attorney general, Bill McCollum, has determined that the individual mandate in federal health care legislation is unconstitutional.

In a five-page memo to leaders in both the U.S. House and Senate, McCollum notes that the Constitution establishes a limited federal government that protects the freedom of individuals and the rights of states, and that the individual mandate is contrary to that principle as it penalizes inactivity.

“Congress’s unprecedented mandate on every citizen to purchase health insurance coverage or to face a penalty raises serious constitutional concerns,” McCollum wrote. “The health care individual mandate provisions as currently drafted violate constitutional principles and lack constitutional authority for Congress to enact.”

McCollum added that if a federal mandate is approved and signed by the president, he will work with his fellow attorneys general across the U.S. “to pursue appropriate legal action.” He noted that several colleagues have expressed interest in joining Florida’s efforts should a suit go forward.

Exercising its ‘sovereign power’

According to the Idaho State Legislature website, its anti-mandates bill, HB 391, was introduced to the House State Affairs Committee, which is permitting it to be printed for consideration.

The four-page bill notes that since health insurance mandates are not outlined in the Constitution, “Idaho hereby exercises its sovereign power to declare the public policy of the state of Idaho regarding the right of all persons residing in the state of Idaho in choosing the mode of securing health care services.”

The proposed state legislation comes as Congress works to finalize a comprehensive health reform bill for passage in both the House and the Senate before seeking President Barack Obama’s signature as law.  In recent days, several state legislators have proposed similar protests of the proposed federal health insurance mandates, a move backed by House Republican Leader John Boehner (R-Ohio).

Clark’s bill states that “no public official, employee, or agent” of the state “shall act to impose, collect, enforce or effectuate any penalty in the state of Idaho that violates the public policy set forth.”

The proposed legislation also tasks Idaho’s attorney general with “seeking injunctive or other appropriate relief, or defending the state of Idaho and its officials and employees against laws, enacted by any government, which violate the policy,” and recognizes that it may cost the state an additional $100,000 for an additional attorney to take such action.

Three other members of the Idaho House, all Republicans, have signed on as co-sponsors of Clark’s bill.

Idaho, Florida latest states to voice opposition to health mandates via IFAwebnews.

John Boehner

Boehner (R-Ohio) said in a statement that to date, 26 states have or plan to introduce local legislation to outlaw any mandate enacted by Congress in its comprehensive health care reform package. The state-based legislation would also ban fines or penalties for those who do not obtain coverage, he said.

More states are expected to join the cause, Boehner said, “to defeat this bill before it harms our economy and undermines the health care of every American.

“With our focus squarely on defeating a government takeover of health care, this growing rebellion in the states is yet another indication of strong grassroots opposition to Washington Democrats’ plans,” Boehner said. “All the burdensome mandates, tax hikes, and new layers of red tape Democrats are devising behind closed doors would wreak havoc on the states, so it’s no surprise a majority of them are already fighting back.”

Among the 26 states where opt-out legislation has been filed are Florida, Ohio, Pennsylvania, Tennessee, Virginia and Utah.

“When we see so many reform-minded state legislators standing with the American people against Democrats’ government takeover of health care, we’re even more convinced that fighting this bill with everything we’ve got is the right thing to do,” Boehner said. “Congressional Republicans will continue to lend our full support to this effort and look forward to having additional states come on board.”

House Republican leader backs states’ moves to block health mandates via IFAwebnews.

Bill Mims

In a response to an inquiry by Lt. Gov. Bill Bolling, Bill Mims said that Congress has a broad power to regulate commerce but the proposed mandate is “open to constitutional challenge,” according to the Richmond Times Dispatch.

As part of a comprehensive health care bill, Congress is considering both mandates for individuals to secure coverage, or face a fine, as well as an employer mandate to provide health insurance to employees or face a payroll tax.

Mims added that while health care is an economic activity, the failure to purchase coverage is not.

A spokesman for the state’s attorney general told the Times Dispatch that the letter should not be interpreted as a formal legal opinion, but rather advice.

Mims also weighed in what is now being dubbed “The Nebraska Compromise,” a deal to secure the vote of Democratic Sen. Ben Nelson for that Congressional chamber’s health bill. The deal would grant Nebraska a permanent exemption from Medicaid expenses all other states incur.

Mims has already joined other states attorneys general in opposing the exemption to Nebraska and, in the letter to Bolling, said where the benefit is “solely to secure the vote of a particular senator ….is unconstitutional,” according to the report.

Mims’ last day in office is Jan. 16. He will be succeeded by fellow Republican Ken Cuccinelli, who recently won election to the seat.

Virginia attorney general questions constitutionality of health mandate via IFAwebnews.

The lobbying effort came as the U.S. House is preparing to debate health care reform legislation and was organized as part of the small business “D.C. Day” by several advocacy groups: U.S. Public Interest Research Group, Main Street Alliance, Small Business Majority and Consumers Union. The Senate is crafting its bill, which should be unveiled in coming weeks.

The House health reform bill, which it says will cost $894 billion over 10 years, includes a government-run health insurance option alongside private plans, expands Medicaid eligibility and caps annual out-of-pocket spending. Under the bill, small business owners with payroll less than $500,000 a year are not required to provide health insurance to their employees.

The huge cost of health care has affected small businesses, which provide the majority of the jobs in United States, according to Marsha Geist, owner of Metropolitan Landscape Management in Dayton, Md.

“It’s not a Democratic or a Republican issue, it’s a human issue,” Geist said of the need for health insurance reform.

The increased cost of providing health insurance to about 10 employees has prompted her to hire more part-time workers, Geist said.

Jane Brettschneider, who co-owns Risky BBQ, a freelance copywriting and advertising business in Baltimore, with her husband Jeff Alphin, said she supports health insurance reform, and wants it “as soon as possible.”

“As a small business and as freelancers, our only option is individual plans and the cost of the individual plans is so outrageous and getting more and more outrageous and we have no choice,” Brettschneider said.

Alphin has two pre-existing conditions — he has had hip replacement and suffers from diabetes, Brettschneider said.

“We can’t afford to drop our health care, but we can’t afford to keep our health care,” said Brettschneider, who declined to give their ages.

Brettschneider and Alphin pay about $950 a month for their health insurance, which is more than what the family spends in food, heating and gas per month, combined, Brettschneider said.

During the day, she met with representatives from the offices of Reps. Elijah Cummings (D-Baltimore) and C.A. Dutch Ruppersberger (D-Cockeysville), Brettschneider said.

The meeting was “frank and productive,” according to Paul Kincaid, spokesman for Cummings.

“Small businesses create jobs and are the economic engines in our neighborhoods and communities,” said Heather Molino, spokeswoman for Ruppersberger. Molino also said that the congressman is “very supportive of the health reform which helps the small business owners to provide affordable health insurance to their employees.”

Earlier in the day, the business owners attended a news conference with Sen. Tom Harkin (D-Iowa) and Sen. Mary Landrieu (D-La.)

Small business owners and those who are self-employed will be the biggest winners under the reform bills being considered, said Harkin, the Senate Health, Education, Labor and Pension Committee chairman.

“Our legislation will create health insurance exchanges to increase competition, enable small businesses to easily compare prices, benefits and quality of health plans, in other words — transparency,” said Harkin.

Secretary of Health and Human Services Kathleen Sebelius, at a White House event later in the day, cited a new report that found that on average, small businesses pay up to 18 percent more than large firms for the same health insurance.

“Small business owners are the backbone of this economy,” Sebelius said. “They are the entrepreneurs who drive our business innovations and inventions and (are) being squeezed at the heart of the current system of health care in America.”

– Capital News Service

Small business owners appeal to Capitol Hill, White House on health care via IFAwebnews.

The majority of the 433 mid- and large-sized company human resource and benefit executives surveyed said they would not absorb any costs resulting from reform, noting that reducing benefits, raising the cost of the goods and services they provide, or cutting staff were possibilities.

Just 11% of employers surveyed plan to take the cost of reform from their own pockets, according to the Towers Perrin survey, conducted in July.

It found that employers are watching Washington closely, with 80% monitoring developments.

Nearly one in four companies (23%) in the survey are currently rethinking benefit changes in light of possible reforms, and nearly all (89%) plan to reexamine their health benefit strategies for active employees in response to the passage of health care reform legislation.

“With employer health care costs rising more than 150% over the last decade, it’s no surprise that 90% of employers list cost containment as the most important health care reform goal,” said Dave Guilmette, managing director of the Towers Perrin Health and Welfare practice, in a statement. “Many large employers, however, feel that current reform proposals are focused on other health care issues such as expanding coverage and reforming certain insurance practices, and they feel they have already addressed these issues within their own workforces.”

Nearly two-thirds of employers (65%) believe that health care reform will have little or no impact on consumer behaviors, an area many leading employers have begun to target as one of their key cost-containment opportunities, the survey found.

A majority (53%) said they believe that research on effectiveness of alternative treatments will have a positive impact on their business by, over time, influencing the quality of care. Exactly 44% said they believe that reforming the health insurance market to ensure guaranteed access to coverage regardless of health status will have a positive impact.

Nearly half (47%) of survey respondents believe that an employer “pay or play” mandate would have a negative impact on businesses.

Survey: Health reform means adjustments for midsize, large employers via IFAwebnews.

The study of 343 small business owners and managers, sponsored by the U.S. Public Interest Research Group, a nonprofit consumer advocacy group, suggests that those small businesses who offer coverage to their employees consider it a “moral obligation,” rather than a smart business strategy, designed to bolster productivity, as well as attract and retain talented workers.

Small business concerns are at the center of the debate over health care reform being waged in the aisles of Congress and at the White House, where employer mandates to provide coverage or face a penalty are garnering increased support. The majority of study participants (76%) of small business owners who took the survey felt that their interests were being addressed in Washington’s ongoing discussions on health care reform.

The majority of the study’s participants (78%) who do not offer coverage would like to. Four in five (80%) cite cost as a barrier to providing employees with health benefits. Another 17% of survey respondents say coverage isn’t offered because it is too complicated.

Most small businesses (55%) that offer health benefits see it as a tool for recruitment and retention tool, while another 27% cite increased employee productivity as a reason to offer coverage, according to the survey.

Survey: Most small businesses want to offer employees health benefits via IFAwebnews.

In a vote of 26-22, the members of the committee passed the America’s Affordable Health Choices Act. Three Democrats – Jason Altmire of Pennsylvania, Jared Polis of Colorado and Dina Titus of Nevada – crossed party lines and voted in opposition of the measure with committee Republicans.

Republicans found fault with a government-run insurance program to compete with private insurers, as did some of the Democrats voting against it, according to media reports.

In a letter sent to Speaker Nancy Pelosi (D-Calif.) on behalf of the Democratic member of the freshman class, Polis said he had “extreme concerns” that they methods for paying for the reform would hurt small businesses.

According to the letter, the Bush tax cuts would be allowed to expire, causing the marginal rate paid by wealthy individuals and small businesses to increase by 4.6% to 39.6%.  Further, a surcharge would tax income above $1 million at a new rate of 45%.  This surcharge, combined with state taxes, could result in many small businesses being taxed at over 50%, Polis and others suggested.

The legislation approved by the Education and Labor Committee, mirrors what was approved by the Ways and Means Committee, calls for individual and employer mandates, a public insurance plan and a health insurance exchange, providing a marketplace for individuals and small businesses to select the coverage that suits their needs.

With the approval of the two House committees today (July 17) and the Senate Health, Education, Labor and Pensions committee approving its own bill July 15, three of the five Congressional committees working on health reform legislation have voted to advance bills. Both the House and Senate will have to debate the bills and approve them before they reach the desk of President Barack Obama.

George Miller

Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee, said reform “is moving forward” and keeps private insurers from holding all the cards regarding the nation’s health care.

“This legislation will reduce costs that are crushing workers, families and businesses alike and it will ensure that patients – not insurance companies – hold the power to make decisions about their care,” said Miller in a statement. “These reforms will save jobs, create millions of new careers, improve the health of our workforce and help rebuild our nation’s middle class. Today’s vote is a monumental step forward in our journey to finally fix our broken health care system.”

Rep. Rob Andrews (D-N.J.), chairman of the House Subcommittee on Health, Employment, Labor and Pensions, said he was “honored” to have participated in the “historic passage” of the legislation.

“Millions of Americans work hard, play by the rules, and take care of their families,” Andrews said. “Yet they suffer from ever increasing health care costs and inadequate health insurance coverage.  Our work was done on their behalf. Our country is now one step closer to a better health care system that will create jobs, promote wellness, and reduce health care costs for all Americans.”

Second House committee approves health reform bill via IFAwebnews.