Health Reform - Three Dangerous Amendments

by Blair Latoff

There are several outstanding amendments of concern that were introduced but have not yet been considered by the Senate Finance Committee. We don’t know when or if these will come up when the Committee returns on Tuesday but to us the three below are the most significant altering amendments.  Here is a rundown I received from Bruce Josten, our head of Government Affairs:
 
Rockefeller C1 – Applying new rating rules to the large and self-insured (ERISA) market.

• This amendment applies health insurance market reforms to the large group and self-insured market.  This amendment will significantly and adversely impact larger employers and self-insured plans and the millions of Americans who count on their employer provided health coverage.  The federal uniformity standard under ERISA (also known as the "preemption" standard) is critical to our health care system, especially the 170 million Americans receiving coverage from the employer-based system.  Its hallmark feature is that it allows employers to offer uniform benefits to their employees, retirees and families without being subject to the conflicting patchwork of mandates, restrictions and costly rules that vary from state to state.
• Uniformity and preemption is vital not only for large employers operating in multiple jurisdictions, but also for small employers operating within a single state or locality who rely upon the predictability of ERISA’s rules to help make possible the sponsorship of health coverage for their employees. This amendment would jeopardize employers’ ability to offer uniform national plans without interference by contradicting state rules. Benefits costs could soar.

Schumer C1/C2 – Public Option Amendments

• The Chamber strongly opposes these two amendments, as we oppose the creation of a government-run health insurance plan.  C1 is a design developed by Schumer, while C2 (Schumer/Cantwell) mirrors the public plan in the HELP Committee bill.
• Both amendments strike Co-Ops and replace with full public plan options. Both amendments would use "negotiated rates" – HELP Committee option clearly has prices set by the Secretary of HHS. We are concerned that the government’s rate-setting policies would essentially shift costs that providers cannot charge to the public plan onto private payers – after all, government underpayments already increase private insurance costs by 20-30 percent.
• The public plan could skew the medical marketplace and overwhelm private, voluntary employer coverage. Under a public plan arrangement, the government is likely to become the biggest payer for health services, as is the case with Medicare. Eventually, the "public option" becomes the only option. 

Wyden C1 – Healthy Americans Act

• This would transform the Baucus bill into something resembling the Wyden/Bennett bill. The CBO found that Wyden/Bennett would end the employer-sponsored health insurance system, even with changes aimed at pacifying the business community.
• Employers are required to "cash out" all employees, who then take that money and go to regional exchange-like entities to obtain coverage. Employers are eternally on the hook for costs, but no longer have any ability to control spending or any way of managing health or utilization.