NU Online News Service

WASHINGTON--Insurance agents are voicing dismay overhealthcare reform legislation passed by the House late Saturday,and are hopeful that a more acceptable product can be produced bythe Senate.

H.R. 3962, the Affordable Healthcare for America Act, wasapproved in the House by a 220-215 vote, just before midnightSaturday. Action on the measure in the Senate is next.

According to Beth Mantz-Steindecker, a healthcare analyst atWashington Analysis, Sen. Harry Reid, D-Nev., the Senate majorityleader, may unveil the Democrats' Senate healthcare bill with aCongressional Budget Office score this week.

That would mean, she said, that the earliest it could reach thefloor would be next week, as the Senate adjourns for the week onWednesday for Veterans Day.

Ms. Mantz-Steindecker predicted that the Senate would need aminimum of two weeks for debate. With the Thanksgiving recess(November 23-27), that means the earliest passage in the Senatewould occur is the week of Dec. 7. That would give conferees a meretwo weeks to pass the bill before the winter recess.

"Given that we don't know when Reid will drop his bill, andRepublicans are promising to slow down the floor debate withamendments, a more likely scenario is that the Senate passes a billby the end of the year, and the final bill is enacted next yearbefore the State of the Union, which usually occurs in lateJanuary," she said.

Robert Rusbuldt, president and chief executive officer of theIndependent Insurance Agents and Brokers of America, said, "As theSenate and House move to conference, the IIABA urges Congress toreconsider what this bill will do to consumers and smallbusinesses."

Among the provisions the industry is concerned with is one thatwould create a public option for government-provided insurance thatIIABA officials contend "would unfairly compete with the privateinsurance marketplace, limit consumer choice and increase thetaxpayer burden."

"This bill picks winners and losers, and small businesses andhealthcare consumers are the biggest losers today," said CharlesSymington, IIABA senior vice president of government affairs.

Other concerns include a provision that imposes a 5.4 percentsurtax on small businesses that file income tax returns asindividuals, and another that creates a new Small BusinessAdministration grant program that would award federal money tononprofits for the purpose of providing small businesses (thosewith less than 100 employees) assistance with consumer information,outreach, counseling and enrollment.

And the National Association of Insurance and Financial Advisorsis voicing concern that a provision repealing the McCarran-FergusonAct antitrust exemption for health and medical malpractice insurerswould expand the Federal Trade Commission's authority to overseeall lines of insurance.

The provision was modified last week with an amendment to thebill to strengthen the mandate for the FTC to study potentialanti-competitive practices by health and medical malpracticeinsurers.

This is of particular concern to the property and casualtyindustry. Currently, the FTC is conducting a study of the fairnessof credit scoring practices used by the industry to price personallines policies.

The FTC has been barred since the early 1980s from regulatingthe insurance industry but, under pressure from House Democrats,launched a study in early January on how credit scoring data isused to set premium rates. Carriers representing 60 percent of theindustry's premiums submitted their data to the agency inApril.

"This bill risks completely derailing employer-providedbenefits," commented Joel Kopperud, a director of governmentrelations for the Council of Insurance Agents and Brokers.

Specifically, he said, "It creates a government program thatwould not compete fairly and could acquire nearly 120 millionAmericans that could otherwise balance private risk pools."

He added, "It limits premium variations so much that healthybehavior could not be rewarded with lower premiums."

And, he said, "the resulting spike in costs may be enough toincline employers to pay a penalty rather than continue offeringbenefits."

The self-insurance industry also weighed in on the Househealthcare bill. Michael Ferguson, chief operating officer of theSelf-Insurance Institute of America, cited a number ofconcerns.

Specifically, he pointed out that one provision would levy a taxon all employer-sponsored health plans to fund a Research Boardproposed to determine the effectiveness of medical treatments, anda study proposed in the legislation would seek to determine "theextent to which rating rules are likely...to encourage small andmidsize employers to self-insure."

The House bill would create a new government-regulated insurance"exchange" where private companies would sell policies incompetition with the government.

The bill adds a new provision that would add incentives for thecreation of additional state-based nonprofit "cooperatives."

But it contains a provision that assures insurance agents'ability to continue to offer all products sold in the "exchange"environment.

Both the House and Senate bills gradually would extend coverageto nearly all Americans by providing government subsidies to helppay premiums.

The measures would bar insurer practices such as charging moreto those in poor health or denying them coverage altogether.

Under both bills, all Americans would be required to carryhealth insurance, either through an employer, a government plan, orby purchasing it on their own.

To reduce costs, the government subsidies and consumerprotections don't take effect until 2013. During the three-yeartransition, both bills would provide $5 billion in federal dollarsto help get coverage for people with medical problems who areturned down by private insurers.

Both the House and Senate bills would expand significantly thefederal-state Medicaid health program for low-income people.

There are several major differences between the bills.

Specifically, the House bill would require employers to providecoverage; the Senate does not.

Another difference is that the House bill would pay for thecoverage expansion by raising taxes on upper-income earners; theSenate uses a variety of taxes and fees, including a levy onhigh-cost insurance plans.

Another major difference is cost. The House bill would costabout $1.2 trillion over 10 years; the cost of the Senate versionis under $900 billion.