Although the phrase has become a clich? and is grossly overused, it is appropriate to use the term "too-big-to-fail" in describing the ultimate fate of the health care reform bill passed by the Senate on Christmas Eve.

It is unclear when the final bill will be approved. Democrats are hoping they can complete work on the legislation and send it to President Barack Obama's desk before his State of the Union address, just weeks away.

More realistic observers, however, don't believe Democrats can complete work on the bill much before the end of the first quarter, given all the major differences that must be reconciled.

Saying that passage of the bill is too important for it not to pass is seemingly counterintuitive, because polls show declining support for it and Republicans, both inside and outside of Congress, are having a field day taking potshots at it.

For example, on Dec. 19, during the marathon debate on the Senate version, Minority Leader Mitch McConnell, R-Ky., called the bill "a legislative train wreck of historic proportions."

Democrats, too, are concerned. A number of moderates in the House in swing or Republican districts have announced plans not to seek re-election out of fear of having to defend their seats in bruising battles against newly reorganized Republicans.

Despite all this, a health care reform bill will be passed and signed by President Obama. The Democrats have far too much invested in the effort to turn back now.

Indeed, I'd go so far as to say that Republicans have as much to lose as Democrats if the bill fails.

For example, a number of key Republican constituencies–especially the drug and pharmaceutical benefit management industries–stand to gain a huge number of new customers, and would be irate if the new system doesn't go into operation.

Second, Republicans are relishing taking the issue to the voters. Sen. Jon Kyle, R-Ariz., for one, calls the individual mandate to buy health insurance an "assault on liberty." And Republican governors and office-seekers intend to contest the individual mandate in court by declaring it unconstitutional.

As Sen. Richard Burr, R-N.C., put it on the eve of the final Senate vote: "If [Senate Majority Leader Harry Reid] doesn't get 60 votes, the American people win. If he does get them, America's payback will come in the form of the 2010 elections."

Many Democrats no doubt rue the day they decided to try to get health care reform done this year, with the economy tanking to a level not seen since the 1930s.

Yet passing health care reform legislation at this point is their only option, however flawed the bill might be. (Expect numerous "technical corrections" to be passed before the legislation goes into effect in 2014, making this bill a work in progress.)

If they come up short, congressional Democrats and even the president will be viewed as politically impotent.

The bill is not great for the industry, but it could have been worse. Health care insurers are in good financial shape and will likely be quick to adapt to the new environment. While most for-profit insurers will face heavier taxation, it will ultimately add 31 million subscribers to their customer rolls, according to many calculations.

Meanwhile, agents and brokers who serve the group market are unlikely to be affected by the Brave New World of health care delivery.

For agents, two critical areas are the medical loss ratio likely to be established under the final bill and the new exchanges that will be created through the legislation as a means of facilitating greater competition.

Most carriers are within the 85 percent MLR mandated by the Senate bill for the group market, so they are unlikely to be affected, according to health care analysts and agent and broker trade group officials.

But agents catering to smaller markets, including the very small and individual segments, are likely to be hurt because the commissions for bringing in this business–which can range up to 20 percent–are clearly going to be impacted.

"The squeeze will be on the smaller plans, and therefore on the agents who sell them," cautioned one source, also noting that those agents who sell so-called "Cadillac plans" will also be affected.

The other major concern is that to assuage House Democrats who insisted on a "public option," Democrats writing the final bill may decide on national exchanges of private health care plans, instead of the current state-based ones proposed under both the House and Senate bills.

One lobbyist cited a provision in the original bill introduced by Sen. Reid that would have given the Department of Health and Human Services the authority to regulate broker compensation.

Although this was removed in the final bill–a "tremendous victory," the lobbyist said–the potential for national exchanges as a compromise to advocates of a public option is stirring concern.

"A national exchange tends to raise again concern about a sweeping federal preemption," the lobbyist said.

Therefore, look for coverage of the impact of health care reform on carriers, producers and buyers for years to come.

Arthur D. Postal is NU's Washington editor. He may be reached at apostal@sbmedia.com.

Special Reports /

Democrats Cannot Afford To Let Health Care Bill Fail

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