Insurers, Risk Managers Face Uphill Battles In New Senate
The political earthquake that shook Washington, D.C. to its core late last month when U.S. Sen. James Jeffords of Vermont declared his independence from the Republican Party is bound to do damage to the insurance industry's cause on a number of fronts. Risk managers could also find themselves behind the legislative eight ball.
Republican control of Congress was always precarious, given the 50-50 split in the U.S. Senate. But no one anticipated that an outright defection would pull the rug out from under the newly crowned Republican government so soon. It was a devastating blow to President George W. Bush and other party leaders, but it does not have to be a crippling one.
Sen. Jeffords' abrupt party switch turns the Senate upside down, with Democrats displacing Republicans as committee chairmen. Thus, Democrats will control the flow of legislation in the Senate, which means many bills near and dear to the hearts of the insurance and risk management communities might never see the light of day, while others might be introduced that business groups oppose.
One of the most controversial issues affected with be patients' rights legislation.
Last month, Sen. Jeffords joined with a Republican, Sen. Bill Frist, R-Tenn., and a Democrat, Sen. John Breaux, D-La., on a bill that would allow patients to sue their health plans for a limited amount in federal court, but only after they had completed a thorough utilization review process. That measure is likely to gain steam with the suddenly high-profile Sen. Jeffords behind it.
Patients' rights was one issue that seemed to cross party lines, and a bipartisan compromise appeared to be inevitable at some point. However, the right-to-sue provision, if it survived at all, was likely to be toned down considerably in a Republican Senate.
The insurance industry and risk managers knew they had a sympathetic ear among the Republicans when they argued that allowing lawsuits against health plans would hike liability and litigation costs, thereby pushing already soaring health coverage expenses even higher, and ultimately leaving millions of more people uninsured. They will have a much harder time making their case in a Democratic-controlled Senate.
Civil liability reform is another key issue for insurers and risk managers that now faces an uncertain future with Democrats in charge of the Senate. Most Democrats have never been fond of tort reform, and thus any bill on class-action or small-business liability reform will face tough going in the newly constituted U.S. Senate.
Tougher privacy regulations could also come out of a Democratic Senate. While privacy, like patients' rights, is an issue that resonates across the political spectrum, the fact is that stricter, more restrictive standards are more likely with Democrats in charge–certainly not music to the ears of insurers and risk managers.
Indeed, insurance lobbyists are already lamenting that Sen. Paul Sarbanes, D-Md., who will now chair the Senate Banking Committee, has co-sponsored privacy legislation that would allow consumers to opt out of information sharing between their financial institutions and other parties, including affiliates. The current Republican chair, Sen. Phil Gramm of Texas, opposed the legislation.
Environmental liability will also be up in the air with the Democrats running the show in the Senate.
What's more, President Bush will have a tougher time appointing conservative judges to the federal bench who would likely be more friendly to business interests and less likely to expand federal power over states' rights.
However, the fact that the U.S. Senate will be led by Democrats does not mean that any particular bill definitely will or will not become law. Indeed, it is more likely that we will return to the gridlock that often characterized the Clinton years, when the Democrats controlled the White House while the Republicans ran Congress.
Therefore, just as during the Clinton years, compromise is going to be required if any legislation is going to get passed the rest of this year and next.
Since he began campaigning for the White House, and especially since he took the oath of office, President Bush has talked the talk of bipartisan government. Now he must really walk the walk. Before the Jeffords defection, President Bush could openly court Democratic support for his initiatives, but if push came to shove, he knew he could rely on his tie-breaking Senate vote by Vice President Dick Cheney to squeeze his bills into law. He no longer has that luxury. He will have to make Senate Democrats real partners to get anything accomplished.
When he was governor of Texas, Gov. Bush prided himself on his ability to reach out to Democrats and work with them to get compromise legislation passed. His leadership and political skills will really be put to the test now.
But President Bush is going to need all the help he can get. That means insurance industry and risk management lobbyists are going to have to pay more attention to Democratic sensibilities in pursuing their agendas and in trying to shape legislation to their liking.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, June 4, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.