Lobbyists love Baucus’s bill
BySeptember 17, 2009
The latest health overhaul plan circulating on Capitol Hill gives health insurers, drug makers and large employers reasons to heave sighs of relief, sparing them the higher costs and more burdensome rules included in other Democratic-written alternatives.
Industry players that have already struck bargains with President Barack Obama’s administration and leading Democrats to help pay for revamping the health system saw most of those deals left intact — and in some cases sweetened — in the $856 billion proposal unveiled Wednesday by Sen. Max Baucus, D-Mont., the Finance Committee chairman.
You won’t hear any of them cheering publicly about what they would get out of the measure, because many are still hoping for a better deal before Congress takes final action on revamping the health care system. But don’t expect to hear them coming out in opposition, since they know Baucus’ plan is the lesser of many evils being considered.
Take the health insurance industry.
It would score a new, taxpayer-subsidized customer base of millions who don’t currently have insurance, thanks to a mandate that everyone purchase coverage — backed up by steep penalties on people who don’t. And it wouldn’t have to compete with the government to cover people, unlike in the four other health overhaul plans approved this year by Democratic-dominated congressional committees.
Nor would the nonprofit so-called “co-ops” designed to provide consumers with an alternative to private health insurance pose any real threat to their business, according to a nonpartisan analysis released Wednesday. The Congressional Budget Office said those plans “seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments.”
Insurers would also take a smaller hit to the payments they get for offering private plans under Medicare — some $110 to $120 billion, estimated one industry source, compared with the $175 billion that Obama initially proposed this year.
In exchange, insurers had already agreed to stop denying coverage to people with serious health conditions and help cover the cost of the transition to the new system. They’re still fighting hard against two other aspects of the measure that would slice into their potential profits: a new 35 percent excise tax on high-cost plans and $60 billion in fees, both of which insurers warn would be passed on to consumers.
“We have some significant concerns, particularly the new taxes that are going to make health insurance less affordable,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans. He rejected the notion put forth by many liberal and labor groups that the measure amounts to a gift to private insurers, arguing that the companies are covering more than one-quarter of its pricetag, a level disproportionate with the industry’s share of health care costs.
But health insurance stocks jumped Wednesday at the news of Baucus’ public option-free measure. And privately, industry lobbyists acknowledged that the plan is far more to their liking than any of the other measures currently under discussion, and expressed confidence that it would improve further as senators and Obama’s team continued to haggle over its details as it approaches a Senate vote.
Meanwhile progressives called the measure an industry giveaway — “like a dream come true” for insurers, said Justin Ruben of MoveOn.org — and labor leaders said Baucus had compromised too much and produced a bill that would force people to buy health coverage they couldn’t afford.
“We think the plan the way it is structured incentivizes employers to offer bare-bones plans,” said Chuck Loveless, the legislative director of the American Federation of State County and Municipal Employees. As for the co-ops, he said they were “designed to fail, and it’s a great boondoggle for the insurance companies. We don’t think it’s going to increase competition or bring down costs.”
Big employers would dodge what many of them considered the most costly bullet among Democrats’ health care proposals — a mandate to offer health insurance — although they would have to pay a modest fee if the government ended up subsidizing employees’ coverage.
The Business Roundtable, which represents corporate executives, cheered Baucus’ proposal in a statement from Eastman Kodak CEO Antonio M. Perez that called it “bold” and “a step in the right direction.”
Drug makers who had previously cut a deal with Obama and Baucus to kick in $80 billion to help pay for the overhaul would see that agreement preserved, while rival proposals in the House that would force them to cover more drug costs for elderly people would cost them considerably more, as much as $140 billion.
The Pharmaceutical Research and Manufacturers of America, which plans to spend tens of millions on an ad campaign promoting a health overhaul, stayed relatively quiet, issuing only a brief statement that said it was reviewing Baucus’ plan.
Ken Johnson, PhRMA’s spokesman, said the industry would “continue to be a constructive partner” in the effort to enact health reforms.
Some businesses would see increased costs under Baucus’ plan, and they were pushing hard to avoid them. Medical device makers would have to pay fees amounting to $40 billion while clinical laboratories would pay $7.5 billion.
11 Responses to Lobbyists love Baucus’s bill
woody188
September 18, 2009 at 12:05 am
Surprise surprise, forced insurance is profitable. Hard to imagine having queues of people waiting to buy a promise from a company focused solely on investor profits. At least in the America I once knew, it would be hard to imagine.
And all the while insurers are getting ready to outsource and off-shore in a big way. Accounting, Purchasing, and some HR/Operations like attendance and record keeping are being boxed up to ship overseas as I type.
*~*~*~*~*~*~*~*~*~*~*~*~*~*
Congress is elected to represent, not to direct, the people.
Procrustes
September 18, 2009 at 4:21 am
Where else would you buy insurance from besides insurance companies>
And I surely would like to know about that outsourcing and how it ties in to this or any other healthcare plan.
PlacitasRoy
September 18, 2009 at 9:02 am
Why insurance?
No one has answered the overriding question so brilliantly proposed by Rep Weiner from NY. What value does insurance add to health care? All responses are about $$$ or attempts at insults. Everyone has been trying to find answers to the wrong questions. “What value does insurance add to health care?” needs to be answered before the discussions go forward.
Insurance OF ANY KIND, profit or non-profit, add NOTHING to health care.
An insurance company clerk has NEVER given a shot.
An insurance company marketing expert has NEVER set a broken bone.
An insurance company lawyer has NEVER worked the ER.
An insurance company salesman has NEVER performed physical therapy.
An insurance company CEO making $100,000 a day has NEVER emptied a bed pan.
Procrustes
September 19, 2009 at 7:31 pm
And no insurance adjuster has ever replaced a fender on a car.
So we should do away with auto insurance?
What would you replace health insurance with? Leave everyone to hang out to dry? Medicare/Medicaid? That’s just an insurance policy.
woody188
September 18, 2009 at 9:43 pm
See PlacitasRoy post below.
The outsourcing/off-shoring is just a little something I got from a source on the inside. Good reporter has to protect his source. So there is no link or anything just insider information.
Procrustes
September 19, 2009 at 4:01 am
Just trust you? Hee hee hee hee. You aren’t a reporter, you’re a politician. You must think we’re all pretty stupid to take a bunch of hooey like that.
I have inside information too. It says you are blowing smoke out your butt.
woody188
September 19, 2009 at 9:03 pm
I have a reputation online and in real life for honesty and accuracy. In my line of business trust is a requirement due to the access to sensitive data I have at hundreds of businesses and homes.
I really don’t care if you believe me or not. I have a friend at a large insurance company that works purchasing and she gets the bills for the VISA’s to India. Lot’s of them lately, and she said her friends in accounting are already training their replacements.
No, I don’t think most posters on CHB are stupid. Quite the contrary, which is why I come here. I do wonder where your hostility comes from, at least for a moment.
bryan mcclellan
September 19, 2009 at 10:08 pm
One pitch hurlers usually strike themselves out Woody, and I feel I can safely say that most come here to listen, think, and possibly find one more chink in the armor that adorns the ignorance of man…
almandine
September 19, 2009 at 7:43 pm
This is all pretty dumb.
gazelle1929
September 20, 2009 at 4:11 am
Thank you for adding absolutely nothing to the discussion. Why do you have to gratuitously throw in more ad hominem comments? Please stop with the snide rudeness.
almandine
September 20, 2009 at 9:16 am
Et tu…