By Evan Falchuk
Three quick reactions:
1. Is it really news?
Of course a committee in a super-majority controlled Senate on the President’s most important domestic issue is going to pass a proposal out of committee. What’s less clear is what happens next. Is it true, as Republican Sen. Mitch McConnell says, that the proposal will never make it to a vote in the Senate? I have no idea. But with industry lobbyists gearing up for a fight, this isn’t nearly the end of the reform saga. The sound you hear is great rejoicing among health care bloggers.
2. Opposition can come from surprising directions.
A top lobbyist says 30 of his clients are going to run full-page ads in the Washington Post, USA Today and other papers tomorrow announcing their opposition to the Baucus plan. Insurance lobbyist, right?
Nope, the clients are 30 of the largest most important unions in America. They oppose the Baucus plan because of the tax on so-called “Cadillac” insurance plans, which the proposal describes as plans worth more than $8,000 for an individual. You might think that the people enjoying these Cadillac plans are corporate fat cats, but you would be wrong. It turns out that a large number of them are working men and women whose labor organizations have negotiated these kinds of benefits on their behalf. The Baucus plan seems to target those kinds of plans for extinction, and the unions aren’t going to stand by and let that happen.
As for the health insurance industry, the implicit deal was always, make it mandatory to buy a policy and we’ll agree to take all comers. Force young, healthy people into the risk pool so we can use their premiums to offset the cost of the older, sicker people we’re now going to be required to cover. Once it became clear that the deal was going to be no, take all comers, and then we’ll work on getting some kind of a mandate for young, healthy people, the insurers had no choice but to try to stop it.
3. There’s more action than just what’s happening in the Senate Finance Committee
While all the attention has been focused on the Baucus plan, committees in the House and Senate have passed two bills (of a scant two pages each) that may do more to impact the health insurance business than anything in the Baucus plan.
Each called the “Health Insurance Antitrust Enforcement Act,” the bills would end the exemption from antitrust laws that health insurers have enjoyed for nearly 65 years. It’s not clear how the federal government would use this power if it became law, but I suspect the many states in which one or two insurers dominate their markets would be rich targets for antitrust regulators.
These bills have the insurance industry nervous, with all of the major insurance trade associations strongly opposed – even ones in lines of business that would be unaffected by the language of the bill. The reason: this legislation is aimed at the heart of the system of state-by-state insurance regulation, and the structures the insurance industry and its regulators have created over several decades. Which begs the question yet again, what do the state regulators think of all of this?
