NU Online News Service, July 31, 3:40 p.m. EDT

WASHINGTON–The House Energy and Commerce Committee was preparing at press time on Friday to approve health care reform legislation, a move that would send the House version of the historic legislation to the House floor for a vote in September.

Meanwhile, negotiations stalled in the Senate, where six members of the Finance Committee had been near a deal on bipartisan legislation that was expected to be the template for any final legislation.

That was because the Republican congressional leadership persuaded two of the three Republican members of the bipartisan group to delay action until fall.

The Senate Democratic leadership confirmed Thursday night that a vote on legislation by the Senate Finance Committee before the August recess is unlikely.

The House leaves today for its recess; the Senate, on Aug. 7. Both resume work Sept. 8.

The Obama administration had hoped for both the House and Senate to complete work on competing bills by the August recess, setting the stage for fall talks on a final bill.

But a Washington investment analysis group had predicted the delay.

"This will push out passage until sometime in September, setting the date for a conference with the House bill in the fourth quarter," said an investment note by Washington Analysis.

"This would conform to our view that enactment of health care reform will not take place until the fourth quarter or the first quarter of 2010.," the note added.

The Republican leadership hopes to use the one-month summer recess period to put pressure on majority Democrats to start over in the fall in the face of voter opposition.

The legislation scheduled for vote by the E&C panel, probably along party lines, is substantially scaled back from legislation passed earlier by two other House committees–the Ways and Means Committee and the Education Labor Committee.

It still contains provisions of concern to the insurance industry, including a so-called "public option," creation of health exchanges as a means of providing information on the costs of competing plans and an employer mandate.

But some tough provisions have been agreed to by the industry.

These include mandates requiring insurers to sell or renew policies regardless of an individual's health status and barring them from excluding coverage for treatments based on pre-existing health conditions.

The provisions also limit the ability of insurance companies to charge higher rates due to heath status, gender, or other factors. Under the provision, "premiums can vary only on age (no more than 2:1), geography and family size," the document states.

The health insurance exchange provision opens this system to individuals without other coverage and to small employers with less than 10 employees. This new venue will enable people to comparison shop for standardized health packages.

According to the document, "It facilitates enrollment and administers affordability credits so that people of all incomes can obtain affordable coverage."

The public health insurance option creates a new insurance plan that is available only within the Health Insurance Exchange.

However, all of these provisions will not go into effect until 2013 under the House legislation.

That is because the legislators wanted to give a long lead time for both the industry and the government to gear up to deal with the new system, according to Ira Loss, an analyst with Washington Analysis, Washington, D.C. He cited the Medicare Modernization Act of 2003, which did not get underway until Jan. 1, 2006.

The bill expected to win House approval today also contains two other provisions of interest to the insurance industry.

One would create a Health Choices Administration as an independent federal agency headed by a commissioner appointed by the president. This provision is opposed by the National Association of Insurance Commissioners.

Another provision would create a long-term care entitlement program that would be administered by the Department of Health and Human Services Committee.

The provision, the Community Living Assistance Services and Supports Act, or CLASS Act, is being strongly criticized by all aspects of the industry.

This includes the American Council of Life Insurers, America's Health Insurance Plans, the American Association for LTC Insurance and the American Academy of Actuaries.

The House bill also contains provisions eliminating group health insurance plans and limiting grandfathering of existing group health plans under the Employee Retirement Income Security Act to five years.

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Health Bill Moves To House Floor

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