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Update on Health Care Legislation 11/23/09

This from the National Business Group on Health:

November 23, 2009

Though Senate Democrats came together over the weekend long enough to vote 60-39 to begin debate on health care legislation over the weekend, moderates and left-of center Democrats quickly went their separate ways over the government insurance option (aka the public plan option).

Lingering disagreements among Democrats over this issue, cost-cutting, new taxes, and the socially divisive issues of abortion and illegal immigration do not point to swift passage of a bill anytime soon.  Unexpected controversies could emerge such as one floated by the gun lobby that suggests that the legislation could make it harder for people to get gun licenses if doctors share patient data with the government and that wellness incentives may require gun owners to pay more for health insurance.  We do not expect the President to sign legislation until early next year, possibly in February.

Four key Senators in the middle, Blanche Lincoln (D-AK), Mary Landrieu (D-LA), Ben Nelson (D-NE) and Joe Lieberman (I-CT) reiterated that they would not vote for the bill as it currently stands unless it changed significantly.  Apparently without the 60 votes to overcome a potential filibuster, Majority Leader Harry Reid (D-NV) has reportedly begun talking again with the two Republican Senators from Maine, Olympia Snowe and Susan Collins, trying to strike a deal for their votes.

As Senators attempt to insert sweeteners for their constituents in the bill and the media focuses on high-profile controversies, one little-noticed deal apparently reached late Friday between Senator Max Baucus (D-MT) and Senator Ron Wyden (D-OR) spells major adverse implications for employer plans.

The agreement would allow low-income employees (with incomes at or below 400% of poverty, or about $88,000 for a family of 4 in 2009) whose share of premiums are close to what the bill considers unaffordable (between 8 and 9.8% of their incomes) to use their employer health subsidies to buy health insurance exchange coverage.  Such a move, if expanded to include more employees and ultimately all of them as Senator Wyden hopes, would unravel employer risk pools and raise employer plan costs.

This change and other ideas that raise costs for employer plans do not belong in the bill.

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November 23, 2009 - Posted by | Federal Government, healthcare | ,

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