Health Care Reform Passage is Historic, But Only the Beginning

Health care reform was passed by Congress today. It’s as simple as that. And as complicated. The legislation will do far less than either its proponents or opponents claim. But the legislation will change the insurance industry. It will begin to address some of the drivers of skyrocketing medical costs. It will aggregate more power and influence in government while it is far from a government takeover.

The political impact of health care reform legislation will have far reaching political ramifications for years to come. The Senate health care reform package and the associated clean-up legislation were passed exclusively with Democratic votes. Which means if, over time, the program is deemed by voters as successful the electoral benefits of the program will accrue almost exclusively to Democrats. And if the program is rejected by voters it will be Democrats who are punished.

The vote in the House of Representatives – 219-to-212 to pass the Senate health care reform bill and 220-to-211 in favor of the clean-up legislation – is historic by any definition of the term. Many Presidents of both parties had tried to pass health care reform. Many Congresses had considered such legislation. To President Barack Obama and the 111th United States Congress goes the credit (or blame) for actually taking action.

Their bill is more moderate than some that had been proposed (the proposals of both Presidents Bill Clinton and Richard Nixon were in many ways more far reaching) and far more liberal than others. Yet the politics, policy and process has polarized the nation in ways few issues have before. (I find it ironic that many of those marching against today’s health care reform today were doing much the same against the Viet Nam War in the 60s and early 70s – or condemning those who did).

The House vote today means that, once signed, the Senate health care reform bill, HR 3590, becomes the law of the land. However, virtually no one in Congress or the Administration likes that bill as written. Consequently, the House passed a companion bill, HR 4872, that makes several significant changes to the HR 3590. Most significantly, the companion bill can be considered by the Senate under established parliamentary rules that bypass the filibuster process. This means the clean-up bill can be passed by a simple majority of the Senate – 51 votes. Senate Majority Leader Harry Reid has assured House Speaker Nancy Pelosi he has rounded up the necessary votes. However, success is neither automatic nor guaranteed. Republicans have the ability to delay passage of the clean-up legislation and might be able to have key elements of it removed.

This means there will be two signing ceremonies concerning health care reform: in the first President Obama will sign into law the Senate health care reform bill that no one likes. In the second, President Obama will sign into law a measure that virtually everyone agrees makes the first bill better. American politics being what it is today, however, we will first witness the spectacle of Republicans trying to defeat legislation that contains provisions they would likely admit improve the law that they failed to defeat today. No wonder Alice in Wonderland is the most popular movie in the land today. The body politic has fallen through the looking glass.

As a result of tonight’s action, Congress has addressed the easiest part of health care reform: changing how insurance companies act and are regulated. These “market reforms” are meaningful. Some, although not all, were necessary. But in a real sense the measures enacted represent low hanging fruit. Because the reality is that insurance companies don’t determine insurance premiums in a vacuum. Congress has taken on the easy villains in this drama: the greedy insurance companies. But everyone knows (and a few will admit) that health costs will continue to increase at an unacceptable rate. This means lawmakers will soon be forced to address the real driver of increasing health insurance premiums: medical costs that increase at twice the rate of general inflation. Doing so will be more difficult than beating up on insurance carriers, but eventually there’s no escaping the need to address root causes.

Then there’s the inevitable law suits. State legislators are already passing laws to exempt their citizens from elements of the health care reform package (specifically the requirement imposed on virtually all Americans to obtain health care coverage). And any legislation of this magnitude is a boon for lawyers in both the private and public sectors.

Should agents and brokers (the primary audience for this blog) consider passage of health care reform the death knell of their profession? No. Change will be required (something that has been required with some regularity every few years for the past three decades). But thanks to the efforts of the National Association of Health Underwriters and the hundreds of brokers who have engaged in the health care reform debate, change does not mean elimination for today’s professional brokers. And the reality is, even if Congress failed to pass health care reform brokers faced substantial changes to their profession in the next few years. The status quo was going to change by legislative fiat or as the result of internal stresses. At least now we have a better sense of what the new world will look like.

The health care reform bills passed by the House of Representatives today draw the outlines of this new world. It will be up to judges and regulators and future Congresses and state legislatures to fill in the details. As mentioned previously, neither the health care reform process or debate is over yet.

So yes, the House of Representatives made history tonight. And it’s only the beginning.

26 thoughts on “Health Care Reform Passage is Historic, But Only the Beginning

  1. As portrayed by the victory of the democrats, and the passage of this landmark legislation, it is patently obvious that the divulgence of knowledge and common sense did not suffice to prevent the mass economical carnage and forthcoming mourning that the people of this once great nation will inevitably bear. This healthcare bill will undoubtedly bestow many with promising hopefulness in alleviating their medical burdens, remove the yoke of arduous healthcare insurance protocols, and set many Americans free from the demoralizing hardship that medical care imparts on those that truly need it. For once, those saddled with illness can treat their conditions without enduring radical financial detriments, and receive medical attention in a fashion that will preserve their health concurrent to their financial state. The healthcare reform, as it is seen on this faithful day, brings forth hopeful expectation and a seeming remedy to our nation’s once contemptible healthcare system. Or is it so?

    The healthcare reform budget calls for the imposition of many economically detrimental sanctions, among them extreme tax increases and undue government enforcement ensuring complete compliance of all of the healthcare reform’s taxes, fees, and excessive mandatory employment tax obligations, of which our economy cannot suffice to bear. Our anguished economy cannot afford the costs associated with the healthcare reform; however, the Democratic Party believes so. Will this healthcare reform suffice to the Democratic Party’s expectations? The numbers, figures, and facts speak otherwise. Nevertheless, there will always be people in positive expectation of this healthcare reform, ready to defend it, in the wake of its promising and truly appealing “benefits.” Woe to them that act out of pure bliss instead of using sound logic as the basis for their beliefs. Irrespective of how the Democratic Party positively portrays the healthcare reform, it will inevitably fail on the sole basis of natural process and order. If it cannot work, it cannot work.

    What has been sowed in the unfertile land of illogical and prohibitive notions will be reaped accordingly when natural law fails not in proving the healthcare reform’s true disfunctionality. I expect genuine and harsh condolence to this excerpt, from the many who place their trust in the unquantifiable and irrational provisions of the healthcare reform, but beliefs are difficult to transform even in the wake of the truth as portrayed herein. There is nothing that can be done to change the mentality of those that believe in the fantasy of the healthcare reform for the sake of it, and likewise prevent the certain forthcoming economical ravages of its devastation. Doomed as we are, our only true expectation lies in heeding the knowledge we will gain from this failure, and assure that such mistaken legislative decisions are never again repeated.

  2. Exactly one month before his 23rd birthday when he would age off our family insurance policy, the passage of the health care reform bill last night has changed my son’s life forever. He will graduate from college in May. Too old to be covered by our insurance, no longer a full-time student, and not yet employed, he would lose the access to health care that enables him, a health young man who happens to have cystic fibrosis, to live a full life. All the plans for his future were strategies for maintaining that coverage: where he would live, what he would do, how he would pay for continuing coverage. Instead, and for this we are profoundly grateful for last night’s vote, he can join his classmates in building a plan for his future based on his dreams and abilities. He is not alone. The new law gives young adults with pre-existing conditions, among 30 million others, the rights and freedom to pursue happiness and opportunity that the rest of us enjoy. Are the logistical details that come with granting that right so terrible that we could possibly continue to deny it?

    • This bill might also benefit your son in a more important way-there is a good chance he will be able to stay on your health plan until age 26.

      • Yes, that is the best news of all for the immediate future. He has three years, rather than six weeks, to find a job or apply to graduate school. That, for a bright kid with a B.Sci. in biochemical engineering, is all he needs to build a real and self-sufficient future.

        I know the bill isn’t perfect, but we cannot lose sight of the positive changes it brings to individual lives. It is a beginning.

    • I am very happy for your son.

      I just looked outside and to my astonishment, the sky is still in its place, not yet having succumbed to wide scale predictions of falling!

      I am very happy, as well, for all my fellow self-employed friends, particularly those whose spouses do not receive health insurance coverage from work.

      If we can hang on for a few more years, we may not have to lose our homes after all.

      Oh, happy day!

      For the first time since my premiums have exceeded my ability to pay without using home equity credit, I have hope that our family’s economic future is not doomed to death-by-attrition.

      To all those who are now able to escape job-lock and start their own enterprises without worrying about being uninsurable, the future looks bright indeed.

      I know many of my fellow posters are convinced the world ended yesterday, but I believe our country now has a fighting chance of regaining its edge in the world.

      • You may not be doomed to death by attrition, but wait till you see the levels of your future taxes as the gov’t grabs more and more.

      • James I knew the sky wasn’t going to fall! I also know that your premiums aren’t coming down. If I’m wrong and premiums do come down for the same coverage it will only be temporary.

        Simply said nothing that took place last night or the previous months leading up to the vote can possibly lower premiums unless there is a significant change in what’s covered.

        My advice is buy drug stocks.

        • I think you are correct about my premiums not going down, and, in fact, I expect that they will continue to increase by the 10 percent minimum (and more often much higher) annual increase that has taken my family’s monthly nut from $940 per month at the beginning of 2006 to $1865.50 per month today.

          What I do hope for is that A) we will qualify for the government subsidies available to those whose income is below $85,000 per year, and B) we will be able to shop for competitive policies, perhaps with much higher deductibles, on the exchange.

          My situation is somewhat unique in that we obtained previously affordable insurance from BC BS of MN when we lived there from 1984 thru 1995. When we moved to PA in ’95, we were told (evidently in error) by the PA BCBS affiliate that we could not do an interplan transfer and would thus have to enter the (prohibitively expensive) high risk pool. We had no choice–because of the sin of having taken antidepressants and statin drugs, but otherwise in perfect health–of keeping the MN policy in force.

          It was an affordable option for over a decade, though we had to ask every doctor we saw (which was rare) if they would agree to accept MN insurance. To their credit, they always agreed.

          However, MN then changed their terms slightly, basically saying that anyone with one of the BCBS policies had to live within the state in order to change any of the terms of the policy (for example, increasing the deductible substantially in order to reduce the monthly premiums.)

          This happened after we had lived in PA, bought a house, etc. We found ourselves locked into the old policy. If we dropped it, we could not get another policy because of pre-existing conditions. However, we could not alter any of the terms. Over time, more and more people with this same policy back in MN dropped it for another plan with higher deductibles, etc. The bottom line: it became a death spiral, and because we were out of state, our only options were take it or leave it.

          This is why I am so heartily glad that healthcare passed.

          Many of the posters on this blog seem to be highly agitated that future debts will bankrupt our country, etc. Or that a modest increase in taxes is going to cause profound suffering to Wall Street bankers bringing home $25 million a year in bonuses.

          They rail against the poor and the “illegals” who work their fingers to the bone but have a net worth of $5 to their name–that these people, or guys like me who also work extremely hard, but fail to rake in the $200,000 plus income that will be subject to higher taxes–that somehow we are the ones that are ruining this country.

          If I am, I apologize. But this still doesn’t stop me from feeling some genuine hope that I did not feel two days ago.

          Something tells me that CFMother has even more reason to feel optimistic.

  3. I don’t agree with you when you say of the reconciliation bill, “President Obama will sign into law a measure that virtually everyone agrees makes the first bill better” when parts of it add onerous taxes bo businesses and American people. Where are you coming from, Alan?

    • Actually, Meg, as was just discussed on another of the cable “Here’s the Truth” programs, on CNN, not only will our taxes rise, and not at the $200K level but at an$90K level, our health insurance rate WILL GO UP. That is guaranteed.

      The CBO score, as acknowledged by all I’ve read and seen, from CNN to FOX, from the Huffington Post to the WSJ, was a very faulty score, having been derived only by what the CBO was given, which was the “Hopes” that what is currently in the Bill stay in the Bill, and not be wiped out, as is expected, by “future Congress'” in an effort to stay in office.

      This plan was ill-thought out, ill researched, rammed through a Congress in which it barely scrapped by on a party line vote, and even many Democrats voted against it in the House. That should tell anyone, even those who are almost not reading anything, that this is bad law.

      It will not be made better over time, it will become worse, and our children and grandchildren will curse us all. Unless, we, the people, can change this outcome in November 2010.

      • All good points!

        And while we’re on the subject, can anyone explain why the Deomocrat’s amendment to have government take over student loans has anything to do with health are reform?

        • Meg,

          It has nothing to do with HCR.

          In Congress, versus many State Legislatures, Bills or Amendments to Bills can be attached even if they are not germane to the original Bill.

          Thus, a Bill that addresses Medicare Funding can have an amendment attached to it that will fund a University in Georgia that wants to do a study of the mating success of Viagra on Frogs…seemed as far out an example as any other. The Student Loan bill has been an important part of Obama’s Education initiatives, and was simply included in HCR, because they can.

          My personal take is that I’m bothered by the Feds, again, pushing the Private Sector out of the equation in favor of having a Public Sector only solution; another forward movement toward “Nationalization” of Private Sector solutions?. Sure smells like it.

          Spence

    • Meg: The reconciliation bill removes the Cornhusker Kickback and other sweetners, delays some taxes (although, as you point out, it adds some, too), improves the financial soundness of the overall package, and generally refines the Senate health bill. Few people I’ve seen think we’re better off with only the Senate bill absent the refinements in the side-car legislation.

  4. I would love to have a discussion as to the possible impact on the health insurance broker.
    Without reform, the landscape was changing anyway. The question isn’t IF the broker will get hit, but how hard. Is it going to put the broker completely out of business? Will the health broker become what the travel agent is-extinct?

    • Yes, I too would love to discuss the changes and the effects on the insurance broker now and as outlined in the future – thanks

    • “If we get hit, but how hard”

      How this will affect the individual market I have no idea. However on the group side I offer the following thoughts. Maybe Alan would like to correct any that are misplaced: The permissible loss ratio is 80% and most carriers on small group are now above that. From what I understand brokers will be able to market through the various exchanges or with carriers outside. Confusion will reign and that should make the broker more valuable not less. I don’t think the internet is a threat as small business owners are too busy on their jobs to be bothered with shopping online, especially something time consuming and confusing. So bottom line, I think the broker will do just fine.

      • I think you are burying your head in the sand a bit. Of course, we have no idea what the specifics are, but the following is my wild guess as how brokers will be hit. First, commissions will be slashed, to the tune of 25-50%. Second, I believe small business will be forced to migrate to the exchange. This will lead to a drop rate of group business for the broker. Third, those of us that do individual will get hit hard, especially those of us that wrote a lot of young adults coming off parent’s plans. Fourth, I’m guessing MedAdv is done in several years. On the positive side, there is a pool of millions who were uninsured, and now they be insured, hopefully thru a broker.

        • Please explain your reasoning behind a commissions cut of 25-50%? How did you arrive at that figure? Brokers are more cost effective than bureaucrats, or company employees, with all those attendant benefits that must be paid. Brokers are presently under paid, and if insurers want new business they will have a great need for brokers.

          Small business might migrate to the exchanges, however it probably will be the broker that sends them there. It’s my understanding brokers will be paid commission on business sold through it, probably at a lower %. Brokers also will have available carriers not in exchanges.

          Premiums will most certainly increase making up for most of that lost revenue you foresee for brokers.

          I hope my heads not buried and think not. As mentioned I’m commenting on small group and wish Alan would give us his prediction.

        • Allen,

          Those in the “Millions pool”, estimated to be 30 Million, can be reduced by almost 10 Million when you subtract those who are here ILLEGALLY. Now we have 20 Million. Subtract for those who are uninsured because they have chosen to be uninsured (Oh, Yes, million choose that route…going to Reno, buying a big screen TV, buying an RV, and many other material goods are of more value to that segment…over a 40 year career I’ve seen ’em all), and let’s drop it to a realistic 15 Million.

          Divide that 15 Million by 200 Million (the number of working age adults in America, not all Americans) and the percentage is 7.5% (only slightly higher than Canada). Not such a great “gain”.

          Now, try to estimate the millions of Americans employed by Insurance Companies, Insurance Brokers, and Insurance Agents, and add those who support them (I.e. Print shops, Sandwich joints, mom ‘n pop shops dependent on the Insurance market, etc) who will end up unemployed. Decide for yourself if this exercise in “power” was worth all of this harm.

        • Allen

          I’ll add this to my most recent post of 11:22am so you understand my reasoning. I own an independent agency that derives 20% of its revenue from group health. I’ve been in this business 50 years, and like Spence, have seen it all. Especially from the P&C side with the various politicial wars, politicial rate roll-backs, regulators, Fair Plans, Assigned Risk, FEMA Flood, State Workers Comp Funds. With all those problems our business grew and profitably. As long as insurers are in business, and want the business, they need agents and particularly as independent contractors. I can understand people who have no experience in our business undervalue the service agents provide, but still marvel over agents that do so, and agents that do not understand our value as seen from the insurers’ perspective.

  5. George:

    Welcome to Oz! I am so glad the wizard has agreed to solve all your problems….When does he install the new brain? If you think this bill does anything to actually solve any of the real issues with health care then you need to ask him or I guess ask Nancy Pelosi now if you can have the Oz hospital install the new brain sooner rather than later….. You are obviously an intelligent man and I have a great deal for you on the Brooklyn Bridge, however you must act quickly and quietly because I only have a few left….

  6. Health Care Reform will now be a reality with the signature of President Obama.
    The Republicans did not want to see this day coming.
    Their greed and self interest that has held America back for decades and put us in this economic mess is over.
    The voters said no to the GOP and yes to a better tomorrow and health care for all people.
    The Republicans had no answers to a corrupt health system that started with Richard Nixon.
    The Democrats did.
    This fight is over.
    It is a victory for America.

    George Vreeland Hill

    • “The Republicans had no answers to a corrupt health system that started with Richard Nixon”

      Don’t stop there George Vreeland Hill, I’d like to know how you arrived at that thinking. Please respond.

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