WASHINGTON — The latest health overhaul plan
circulating on Capitol Hill gives health insurers, drug makers and large
employers reasons to heave sighs of relief, sparing them the higher costs and
more burdensome rules included in other Democratic-written alternatives.
Industry players that have already struck
bargains with President Barack Obama's administration and leading Democrats to
help pay for revamping the health system saw most of those deals left intact —
and in some cases sweetened — in the $856 billion proposal unveiled Wednesday
by Sen. Max Baucus, D-Mont., the Finance Committee chairman.
You won't hear any of them cheering publicly
about what they would get out of the measure, because many are still hoping for
a better deal before Congress takes final action on revamping the health care
system. But don't expect to hear them coming out in opposition, since they know
Baucus' plan is the lesser of many evils being considered.
Take the health insurance industry.
It would score a new, taxpayer-subsidized
customer base of millions who don't currently have insurance, thanks to a
mandate that everyone purchase coverage — backed up by steep penalties on
people who don't. And it wouldn't have to compete with the government to cover
people, unlike in the four other health overhaul plans approved this year by
Democratic-dominated congressional committees.
Nor would the nonprofit so-called
"co-ops" designed to provide consumers with an alternative to private
health insurance pose any real threat to their business, according to a
nonpartisan analysis released Wednesday. The Congressional Budget Office said
those plans "seem unlikely to establish a significant market presence in many
areas of the country or to noticeably affect federal subsidy payments."
Insurers would also take a smaller hit to the
payments they get for offering private plans under Medicare — some $110 to $120
billion, estimated one industry source, compared with the $175 billion that
Obama initially proposed this year.
In exchange, insurers had already agreed to stop
denying coverage to people with serious health conditions and help cover the
cost of the transition to the new system. They're still fighting hard against
two other aspects of the measure that would slice into their potential profits:
a new 35 percent excise tax on high-cost plans and $60 billion in fees, both of
which insurers warn would be passed on to consumers.
"We have some significant concerns, particularly
the new taxes that are going to make health insurance less affordable,"
said Robert Zirkelbach, a spokesman for America's Health Insurance Plans. He
rejected the notion put forth by many liberal and labor groups that the measure
amounts to a gift to private insurers, arguing that the companies are covering
more than one-quarter of its pricetag, a level disproportionate with the
industry's share of health care costs.
But health insurance stocks jumped Wednesday at
the news of Baucus' public option-free measure. And privately, industry
lobbyists acknowledged that the plan is far more to their liking than any of
the other measures currently under discussion, and expressed confidence that it
would improve further as senators and Obama's team continued to haggle over its
details as it approaches a Senate vote.
Meanwhile progressives called the measure an
industry giveaway — "like a dream come true" for insurers, said
Justin Ruben of MoveOn.org — and labor leaders said Baucus had compromised too
much and produced a bill that would force people to buy health coverage they
couldn't afford.
"We think the plan the way it is structured
incentivizes employers to offer bare-bones plans," said Chuck Loveless,
the legislative director of the American Federation of State County and
Municipal Employees. As for the co-ops, he said they were "designed to
fail, and it's a great boondoggle for the insurance companies. We don't think
it's going to increase competition or bring down costs."
Big employers would dodge what many of them
considered the most costly bullet among Democrats' health care proposals — a
mandate to offer health insurance — although they would have to pay a modest
fee if the government ended up subsidizing employees' coverage.
The Business Roundtable, which represents
corporate executives, cheered Baucus' proposal in a statement from Eastman
Kodak CEO Antonio M. Perez that called it "bold" and "a step in
the right direction."
Drug makers who had previously cut a deal with
Obama and Baucus to kick in $80 billion to help pay for the overhaul would see
that agreement preserved, while rival proposals in the House that would force
them to cover more drug costs for elderly people would cost them considerably
more, as much as $140 billion.
The Pharmaceutical Research and Manufacturers of
America, which plans to spend tens of millions on an ad campaign promoting a
health overhaul, stayed relatively quiet, issuing only a brief statement that
said it was reviewing Baucus' plan.
Ken Johnson, PhRMA's spokesman, said the
industry would "continue to be a constructive partner" in the effort
to enact health reforms.
Some businesses would see increased costs under Baucus' plan, and they were pushing hard to avoid them. Medical device makers would have to pay fees amounting to $40 billion while clinical laboratories would pay $7.5 billion.
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