Republicans Plan To Keep HC Issue in Public Eye

The House vote last Wednesday to repeal the health care reform law enacted in April was mostly "symbolic," but it sets the stage for continuing efforts by Republicans to keep the health care reform debate before the public eye.

The bill is H.R. 2, the "Repealing the Job-Killing Health Care Law Act."

The vote was 245-189, with three Democrats joining all 242 Republicans in support of the repeal.

The impact of the legislation is huge in that the bill impacts one-sixth of the American economy and governs the expenditure of $2.5 trillion annually.

For health insurers, the new law expands coverage by 16 million people, or an estimated $56.5 billion in revenue, according to analysts at stockcall.com.

Insurers insist they need the most controversial provision—a mandate that everyone buy insurance in 2014 or pay a penalty—because the legislation expands health care coverage substantially and requires them to cover people regardless of pre-existing conditions.

Agents, however, are upset, arguing that they want the law repealed, especially because of what the National Association of Health Underwriters calls the "unworkable" medical loss ratio (MLR) standards imposed through the legislation as well as the legislation's lack of "meaningful cost controls."

Agents say their commissions have been cut 50 percent starting this year because the MLR formula restricts administrative costs as a percentage of premiums. They especially fear that when the health exchange system goes into effect in 2014, they will become irrelevant.

The vote was just symbolic, taking place because "Republicans think it played well with their base," explained Alec Vachon, a health care analyst and former Senate Republican congressional health staffer.

That effort continued Thursday with House floor action on H.R. 9, which instructs House committees dealing with taxes, legal and health care issues "to report legislation replacing the Job-Killing Health Care Law."

The House Judiciary Committee began that effort by holding a hearing Thursday on medical malpractice reform, "Cutting Costs, Spurring Investment, Creating Jobs."

During the debate on the bill, Rep. Joe Barton, R-Texas, said Republicans want to repeal the law because some of the provisions are onerous, especially the one requiring people to buy insurance or face a penalty, a provision that goes into effect in 2014.

"We believe that you shouldn't have the federal government mandate that an individual has to have health insurance, whether he or she wants it," Mr. Barton said. "We want to repeal today so that we can begin to replace tomorrow."

At the same time, Kathleen Sebelius, secretary of the Department of Health and Human Services, issued a statement saying, "I want the people who are benefiting from the Affordable Care Act—including families, seniors and small business owners—to know that this vote does not change the law and that this department will continue to work every day to implement this vital law."

In arguing for repeal, Rep. Eric Cantor, R-Va., House majority leader, said, "Of all the most disingenuous myths in this town, perhaps the biggest is the notion that repealing the health care law will increase the deficit. Let's remember here: we are adding an open-ended entitlement."

He added, "The new law is riddled with budget gimmicks that double-count savings, offset six years of benefits with 10 years of tax increases, and rely on cuts to Medicare and tax increases to fund a new entitlement."

The Independent Insurance Agents and Brokers of America "praised" the House for passing the legislation, although acknowledging that its chances of passing the Senate are "slim."

Robert Rusbuldt, IIABA president and CEO, said, "Our members are both sellers and consumers of health insurance, and are therefore being hit twofold by the many negative consequences of the new health care law."

Charles Symington, IIABA senior vice president of government affairs,  added that the IIABA  "strongly urges the Senate to follow the House's action but, in recognition of the difficulty of passing a full repeal in the Senate and overriding an expected presidential veto, we also urge Congress to quickly fix the most onerous of the new law's provisions."

He said that "some of the provisions that have taken effect, such as the MLR regulation, are so damaging that they are already hurting our fragile economy and costing jobs."

Joel Wood, senior vice president of government affairs for the Council of Insurance Agents and Brokers, said The Council "welcomes and supports" the House vote. "But we have high anxiety about what happens now." He noted that as yet there is no full game plan for "whittling back the impact of the law, and honestly, there is considerable Republican sentiment that they don't want to 'improve' it."

At the same time, he said, there are major concerns about the legislation in the health agent and broker community, especially about the medical loss ratio formula.

"This is a major concern for us, as the clock has already been ticking since Jan. 1 and we're already feeling significant impact, particularly in the small group markets, of how disruptive the formula will be," Mr. Wood said.

"What angers us the most about the MLR is that as a cost control, it is actually a perverse disincentive for plans to restrain costs—the bigger the premium, the easier it is to hit the administrative percentage targets," Mr. Wood said. "We're going office to office on the Hill and find much sympathy for the spot we're in, on both sides of the aisle."

He said, however, that it's "far too speculative to figure out how this is going to evolve through the year. Certainly, removing the agent/broker compensation piece from the MLR calculation is our biggest legislative priority of this session of Congress."

Ira Loss, a buy-side health care analyst at Washington Analysis, which counsels institutional investors and hedge funds, said, "There was the vote and that was the end of it. The Senate is unlikely to take it up; it has no legs."

He cited comments by Sen. Harry Reid, D-Nev., after the vote that the Senate is "unlikely" to take up the bill.

Ethan Rome, executive director of Health Care for Americans Now, a supporter of the legislation, said that for House Republican leadership, "this is a political exercise."

Mr. Rome said his group "takes the congressional repeal effort seriously, and clearly this is part of a broad Republican assault on the law in Congress, the courts and state legislatures."

But, he added, "For them, this is crass, partisan politics, because they don't want this really to succeed. Success would mean two things: First, this would take this away from them as a political issue, and second, take away important benefits and consumer protections that they know are important to their constituents and incredibly popular."