Producer Groups Still Wary Of Health Reform

The vote was strictly along party lines with all Democrats and two independents voting for the bill in the Senate, while all Republicans voted against it except for Sen. Jim Bunning, R-Ky., who was absent.

Sen. Max Baucus, D-Mont., who oversaw the development of a Senate Finance Committee health bill, said that preconference activities will begin immediately. He said Congress plans to have a final bill ready for President Obama to sign before the president delivers his State of the Union address on Jan. 20.

The current Senate version would:

o Require most individual Americans to own health insurance.

o Create new health insurance subsidies for individuals and small businesses.

o Require some employers that sponsor health plans to provide vouchers that employees could use to buy their own coverage.

o Require health carriers to sell coverage on a guaranteed issue basis, and impose tight pricing restrictions.

o Impose a new tax on health insurers.

o Require health carriers to spend at least 85 percent of premium revenue from large health groups, and 80 percent of premium revenue from individual health policies and small groups, on medical expenses.

o Set up a health insurance exchanges to help individuals and small groups get insurance.

o Set up a system of health plans supervised by the U.S. Office of Personnel Management and administered by private carriers.

The Congressional Budget Office said the bill would cut 2010 reimbursement rates for physicians who participate in Medicare by 21 percent, rather than letting reimbursement rates rise 0.5 percent.

Responding to the vote, officials of the IIABA, mirroring other industry officials, said the Senate bill " Will make a number of significant improvements…, including the removal of a government-run health insurance plan [public option].

Robert Rusbuldt, president and CEO of the IIABA, said the trade group still opposes the bill, but the Senate version will ensure that agents and brokers can sell health insurance plans in the exchange programs.

He said it is important to note that the health care bill the Senate passed "fails to bend the cost curve for health insurance consumers, including millions of small businesspeople."

He said a Nov. 30 report from Congressional Budget Office said small businesses would see little to no decrease in their monthly premiums and individuals would see a 10 to 13 percent increase.

Joel Kopperud, a director of congressional relations for the CIAB, said the biggest issue headed for conference will be the administrative caps on insurers, which should be controlled by the markets and "not bureaucratic numbers crunchers."

Joel Wood, CIAB senior vice president of government relations, said the Senate bill at least preserves the framework for larger employers to provide health insurance, but there are provisions in it that might have the perverse effect of incenting employers to drop or scale back their plans.

He said the House bill undermines large employer plans "and does much more violence to the employer-provided group marketplace."

The association, he advised, will continue to seek clarifying language that assures that agents and brokers can provide products through state-based exchanges, including the ability to advise and sell the products of nonprofit cooperatives.

Leonard C. Brevik, executive vice president and chief executive officer of PIA National said he remains concerned about preserving the rights of independent insurance agents to continue to sell and service health insurance policies, "regardless of whether they are offered through an insurance exchange or not."

He added that after passage, agents will have to concern themselves with regulatory issues, but he expects the debate over reform will continue beyond next year.

"This issue will have a large impact on the 2010 elections, but it is too early to say whether it will be a dominant issue," he said.