NU Online News Service

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WASHINGTON--Leadership of the Senate Finance Committeesaid members are making "progress" drafting bipartisan healthcarereform legislation that the insurance industry can support, but itwon't be anytime soon.

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In a statement, committee chairman Sen. Max Baucus, D-Mont., andSen. Charles Grassley, R-Iowa, the panel's ranking minority, said,"While progress has been made in recent days, neither an accord noran announcement is imminent."

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In fact, the statement said, "significant policy issues remainto be discussed among the members, and any one of these issuescould preclude bipartisan agreement. Members are continuing theirmethodical work this morning."

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But, the panel does appear to be working toward sending a billto the Senate floor before the Senate leaves for a month-longrecess Aug. 7. Congress will resume work Sept. 8.

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The bipartisan legislation would include incentives foremployers to provide health insurance coverage for their workersrather than impose a more drastic mandate.

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The Senate Finance bill would also mandate creation of healthinsurance "cooperatives" modeled after rural electricity providersrather than the so-called "public option" strongly opposed by bothhealth underwriters and agents.

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Sen. Baucus emerged from a meeting with the six members of hiscommittee working on the bipartisan bill and told reporters that hehad received a preliminary report from the Congressional BudgetOffice.

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He said "based on a draft of the healthcare reform bill that weare currently negotiating, that [report] estimates the cost of thebill below $900 billion over 10 years, covers 95 percent of allAmericans by 2015 and is fully offset."

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"In fact, according to the preliminary CBO report, the billwould actually reduce the federal deficit in the 10th year byseveral billion dollars," he said. "In addition, employer-sponsoredcoverage increases throughout the life of the program. That is,there is no net crowd out."

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In his comments, Sen. Baucus cautioned that the current draftdoes not include resolutions of several key issues. "Nevertheless,the report is encouraging," he said.

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But one provision contained in the proposed legislation isprompting criticism from America's Health Insurance Plans(AHIP).

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This would be a proposed tax on insurance companies offeringindividual plans valued at more than a certain limit, estimated byAHIP to vary between $21,000 and $25,000, according to variousreports.

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Insurers would have to pay an excise tax on such policies, andthe cost would likely be passed on to employers. While thestructure isn't clear, the tax would likely fall on the portion ofany policy exceeding the mandated limit.

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Robert Zirkelbach, a spokesman for AHIP, responded by sayingthat taxing insurers "is the wrong approach at the wrong time. Newtaxes on healthcare coverage will make coverage lessaffordable."

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He added that the new tax would disproportionately impactemployees in high-cost states, specifically New York, Californiaand Texas, as well as older workers "who have more comprehensivebenefits packages."

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Joel Kopperud, director of government affairs for the Council ofInsurance Agents and Brokers, said the concern about the employermandate within the industry is that a mandate would have acted asan incentive for companies to pay the penalty imposed by the Housebill, as much as $800 per employee, rather than buy group insurancepolicies for the entire company.

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"I think the most important news is the employer mandate pieceas it relates to the public option," he said. "If the packageincludes a cooperative instead of the government-run plan that isin the versions of the legislation drafted by the Senate Health,Education, Labor and Pension Committee and is also in the Housebill, it's more likely that the private sector will be able tofairly compete."

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He explained that a "public" health plan would pay no statepremium taxes, would not have to generate a profit to keepoperating, and would have lower costs for administration, such asoffices and employees.

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"A public plan will undermine the private marketplace, whereas acooperative is more likely to compete on a level playing field thana government insurance plan," Kopperud said.

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"The devil is in the details, but this is significant progress,"he said.

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