Businesses Brace for Health Bill's Costs

Resigned to Passage, Corporate Lobbyists Begin Jockeying for Modifications That Will Buffer the Impact

 

By NEIL KING JR.

Companies are alarmed at potentially costly provisions in the Senate health-care bill, many of which they hope will be scrapped during a final round of negotiations early next year.
A scramble to massage the hefty measure, instead of pushing to kill it, reflects the view of many in the business community that a sweeping remake of the U.S. health-care system now appears inevitable.
The U.S. Chamber of Commerce is among a few big business groups calling for Congress to scrap the overhaul effort.
Business is worried that President Barack Obama's push to extend coverage to millions more Americans will raise the burden on employers. Business groups have widely criticized the 2,074-page Senate bill, which looks set for passage on Christmas Eve. They also have offered a variety of fixes.

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UPI

From left, Democratic Sens. Christopher Dodd, Harry Reid and Max Baucus participate in a rally Tuesday after a series of votes on the health-care bill.

The legislation's scale and complexity, plus uncertainty over how the Senate bill will be meshed with the version that passed the House in November, make it difficult for most companies to gauge the effect it will have on the bottom line.
"We're still committed to the notion that health reform can be done right, but I know of no company that is warmly embracing what is in either the House or Senate bills," said Paul Dennett, top health-care adviser to the American Benefits Council, an advocacy group for large employers.
With all eyes now turning to House-Senate negotiations over a final bill expected next month, corporate lobbyists are jockeying for modifications that will buffer the impact.
Retailers want a longer delay before new employees qualify for company-subsidized benefits. Big employers such as Caterpillar Inc., Boeing Co. and Xerox Corp. want to modify Medicare tax provisions in the Senate bill that would cut their earnings. Small construction companies want an exemption from employee coverage that the Senate bill already applies to other businesses with fewer than 50 employees.
Across the spectrum, businesses worry that a series of new taxes and fees to pay for expanding health-care coverage will push up premiums, particularly for smaller employers.
The Senate bill calls for a nearly $70 billion tax over 10 years on insurance companies, plus a $2 billion-a-year tax on medical devices. Billions of dollars are also meant to be raised from added taxes and fees on wealthier seniors, higher-end insurance plans and tanning salons.
Companies of all sizes have been increasingly burdened by health-care costs, which topped $400 billion in 2007, according to data from the Employee Benefit Research Institute. Unrestrained, that figure is expected to double by 2017. About 70% of workers receive health insurance through their employers.
Groups representing smaller businesses say the threat of increased taxes and premiums could outweigh provisions intended to limit the impact on small employers. The Senate bill "will not only fail to reduce and control the constantly climbing health-care costs small-business owners face, but it will result in new and greater costs on their business," said Dan Danner, head of the National Federation of Independent Business.

Not all companies agree. David Ickert, vice president of finance for Air Tractor Inc., which produces airplanes used in agriculture and firefighting, said that from his analysis, the bill would have "no negative impact" on his operations. The company, based in Olney, Texas, employs about 200 people.
Under the Senate bill, most businesses with fewer than 50 workers will be exempt from penalties if they don't offer employee coverage. Larger companies would face fines as high as $750 per worker if even one employee seeks federal help to buy a policy.
Democrats say a package of tax credits within the Senate bill will reduce costs for small businesses. Small businesses that qualify would get a 25% tax credit to help pay for employee coverage. The legislation would also allow small businesses to band together to seek coverage at costs similar to those of much larger companies.
Large companies that fund their own insurance have been relatively positive about the Senate bill, which is much less prescriptive than the House bill and doesn't contain a government-run insurance plan. Still, large companies cite a list of concerns.
A top gripe is that the Senate bill would alter the tax rules that affect big companies providing prescription-drug benefits to their retired workers. Under the law earlier this decade creating a drug benefit in Medicare, companies that continued to provide such benefits qualified for a 28% tax-free subsidy. The Senate bill would tax that subsidy.
A spokesman for Caterpillar said, "The financial impact would be significant for Caterpillar, particularly in the first year."
Martin Reiser, a Washington representative for Xerox and chairman of the National Coalition on Benefits, said another big concern was "whether a lot of the provisions meant to contain [health-care] costs will actually do so. If they don't work -- and we won't know for years -- then the bill is a failure."
—Gary Fields and Ann Zimmerman contributed to this article. Write to Neil King Jr. at neil.king@wsj.com

O Come O Come, Emanuel

Will Democrats regret Rahm's wager on health care?

By WILLIAM MCGURN

'Twill be the night before Christmas when the Senate delivers the top item on White House Chief of Staff Rahm Emanuel's wish list: a health-care bill. But like the beautifully wrapped gift that looks so wonderful under the tree, this health-care legislation might start to look more like the ghastly sweater from your Aunt Tilly once it comes out of the box.
Give Majority Leader Harry Reid his due. Notwithstanding the grumblings about the way he did it, getting the 60 senators he needed to avoid a Republican filibuster was an achievement. Assuming the House and Senate work out their differences, Mr. Reid's Christmas gift tees up the president for a triumphant State of the Union come January.
Yesterday President Barack Obama gave us a preview when he took a little victory lap amid a jab at critics who are "continually carping" about big spending. The health-care vote, he said, is "a big victory for the American people."

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Chad Crowe 

 

Whether it's a "big victory" for the Democratic Party depends on whether you buy Mr. Emanuel's wager about 1994. The Emanuel Wager goes like this: It was the Democrats' failure in 1994 to pass a health-care bill that ushered in the Gingrich takeover of Congress. In his own meetings with Democrats, former President Bill Clinton has pressed the same line.

This was the message Mr. Emanuel delivered personally to Mr. Reid, when he urged him to cut a deal with holdout Joe Lieberman. This was the message the president echoed two days later in the West Wing, when he told Democrats that no piece of legislation would be perfect. And this appears to be the message embraced by Mr. Reid and House Speaker Nancy Pelosi, given their willingness to accept any amendment to get some health-care bill passed.
So here's the rub: Emanuel's Wager holds only if the merits of the legislation matter not at all.

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That's a cynical view of politics. Of course, if you are Mr. Emanuel and you are looking across the table at senators such as Ben Nelson or Mary Landrieu, you can be forgiven for having your cynicism confirmed. Whether this same cynicism applies to the American people, however, is another question.
Here the signs should be less reassuring to Democrats. As polls have consistently shown, the more Americans learn about Democratic plans for health care, the more the opposition grows. Mr. Reid appreciates this dynamic, which is why he wrote his bill behind closed doors, when only Santa could have any real idea of who's earning a place on the naughty list.
If Mr. Emanuel is right, once health-care legislation is passed and Mr. Obama spins it as a huge victory, the American people will forget their objections and the Democrats will get credit for passing historic reform. If so, that will be some achievement. Because it means building on a health-care package supported by fewer than 38% of Americans (the RealClearPolitics poll average).
If the merits do matter, by contrast, passing this bill could prove more costly than failure. Mr. Obama has been unequivocal in his public statements. In his telling, this legislation will lower costs, reduce the deficit, help small businesses, maintain the status quo on abortion, offer Americans more choices, and so forth.
All these promises may look different when the details emerge, and we learn what change really means. If the president's promises do not hold up, all these Obama statements will be chopped into campaign ads that cut right to his credibility. As for his allies in the Senate, the 60 to 40 party-line vote to close debate means that every Democrat there can be held up as the deciding vote.
It's also unclear whether the traditional standbys for avoiding public accountability—e.g., hiding behind procedural votes—will fly this time. In the last few months, the American people have been watching. And they have learned a great deal about filibusters, manager's amendments, reconciliation, special Medicaid sweeteners for special states, etc.
So they are not likely to be fooled by a senator who tries to have it both ways: by voting to keep this bill alive when his or her vote could have stopped it (Monday morning's cloture vote), and then voting against it (the coming Christmas Eve vote) when passage was assured. Remember how well it worked for John Kerry in the 2004 campaign when his words explaining his votes on a supplemental to fund our troops were thrown back at him. Explained the then-presidential candidate: "I actually did vote for the $87 billion before I voted against it."
Mr. Emanuel was right to tell his fellow Democrats that the price of failure would be to make them all look weak. The question is whether there will be a larger price for looking arrogant.
Write to MainStreet@wsj.com

 

Sen. Nelson Holds Up Health Bill

Dispute Over Abortion Threatens Democrats' Christmas Deadline for Passage

By GREG HITT and JANET ADAMY

WASHINGTON -- Senate Democrats' drive to pass health-care legislation by Christmas showed signs of faltering Thursday, amid divisions over abortion and criticism by some Democratic supporters that the bill is unaffordable for lower-to-middle-income families.
In a seesaw day, Sen. Ben Nelson, an antiabortion Nebraskan who is the last Democrat withholding support for the legislation, rejected an overture by party leaders to address his concerns about the bill's handling of abortion. Among other things, Democratic leaders proposed to create a new tax credit that would promote adoptions.
Sen. Nelson said his concerns had "not been fully answered." In an interview with a Nebraska radio station, he suggested it would be difficult to vote on the broader bill by Christmas, as the White House wants.

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"I accept the idea of deadlines and the pressure that that creates," he said. "But a deadline and a timeline that's out there, that is not achievable, isn't helpful." He added, "I do intend to be home for the holidays."
Labor leaders amplified their complaints about the bill. AFL-CIO chief Richard Trumka objected to the bill's proposed tax on high-value insurance plans, and the decision by Senate Democrats to drop a government-run insurance plan. Mr. Trumka said the Senate bill was "too kind to the insurance industry."
Senate Democratic Leader Harry Reid of Nevada continued to work to get 60 votes, the number needed to ensure passage of the legislation, said Reid spokesman Jim Manley. With Mr. Nelson's vote in doubt, President Barack Obama met with Maine Sen. Olympia Snowe, the lone Republican to show interest in supporting the package, to see if she would back the bill. Sen. Snowe is an abortion-rights supporter.
"He'd prefer to get this moving," Sen. Snowe said. She added that she urged the president to postpone action and use "part of January" to deal with her concerns, which include a proposal to establish a new long-term care program. "The time frame is totally unrealistic," she said of the push for a vote by Christmas.
The bill is designed to extend health-insurance coverage to tens of millions of Americans. It includes a mandate on individuals to carry health coverage or pay a fine -- a provision that is raising fresh concerns among some lawmakers who say that even with new tax credits, some people will find coverage unaffordable.
The Senate bill sets some limits on abortion coverage under insurance policies bought in the new national exchange -- or marketplace -- that would be created under the bill. It would still allow women who receive some government subsidies to buy insurance that covers the procedure, though they would have to use their own money to pay for an abortion.
Sen. Nelson is seeking to further tighten the bill's restrictions. He dismissed the latest attempt to find common ground. "As it is right now, without further modifications, it isn't sufficient," he said.

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Associated Press

Nebraska Sen. Ben Nelson, center, flanked by Connecticut Sen. Joe Lieberman, left, and West Virginia Sen. Jay Rockefeller, right, as they prepare to leave after appearing on CBS's 'Face the Nation' Sunday in Washington.

With the holidays looming, some Democrats were beginning to suggest it might be difficult to make the Christmas deadline set by Mr. Reid.

"Obviously, we are going to take the holidays off, and if we haven't done health care, we need to keep going and come back and do it as soon as possible," said Sen. Jack Reed (D., R.I.). Sen. Debbie Stabenow (D., Mich.) added she didn't know when passage of the bill would come, saying it could be "Christmas Eve, or Christmas, or the week after, or the week after that."
Mr. Reid is juggling a number of year-end priorities. He was trying to push the Senate toward a final vote Saturday on a fiscal 2010 defense bill, which also includes provisions extending jobless benefits. Also pending is legislation needed to lift the nation's $12.1 trillion debt ceiling.
"This entire process is essentially a charade," said Senate Minority Leader Mitch McConnell (R., Ky.). Republicans threatened to resist Mr. Reid's efforts to proceed to a vote on the defense bill, in what would be a symbolic protest over the push on health. Mr. McConnell said Democrats were preparing to vote on a health bill "that no one outside of the majority leader's conference room has seen."
The White House brushed off suggestions that momentum may be turning against the health overhaul. "Despite all the cable TV chatter, nothing has happened in recent days that suggests that this bill is any less likely to pass," said White House communications director Dan Pfeiffer.
Democrats fear a delay could cause them to lose traction on the bill. Pushing the Senate vote past Christmas would add to the time it would take to piece together a compromise between the House and Senate, and would tie debate on that final bill more tightly to the 2010 election season. Polls show widening voter discontent with the health initiative.
Write to Greg Hitt at greg.hitt@wsj.com and Janet Adamy at janet.adamy@wsj.com

 

Democrats on the Health-Care Precipice

Enacting health-care legislation in the face of overwhelming public disapproval may cost the party its chance of forging a sustainable majority.

Barack Obama emerged from his meeting with Senate Democrats this week to claim Congress was on the "precipice" of something historic. Believe him. The president is demanding his party unilaterally enact one of the most unpopular and complex pieces of social legislation in history. In the process, he may be sacrificing Democrats' chances at creating a sustainable majority.
Slowly, slowly, the Democratic health agenda is turning into a political suicide pact. Congressional members have been dragged along by momentum, by threat, by bribe, but mostly by the White House's siren song that it would be worse to not pass a bill than it would be to pass one. If that ever were true, it is not today.
Public opinion on ObamaCare is at a low ebb. This week's NBC-WSJ poll: A mere 32% of Americans think it a "good" idea. The Washington Post: Only 35% of independents support it—down 10 points in a month. Resurgent Republic recently queried Americans over the age of 55, aka Those Most Likely to Vote In a Midterm Election. Sixty-one percent believe ObamaCare will increase their health costs; 68% believe it will increase the deficit; 76% believe it will raise their taxes.
Democrats also have managed to alienate the liberal base to which they were catering. The death of the public option and Medicare buy-in this week sent Howard Dean to thundering "kill the bill." A week from now, the current polls might look good.
Yet it is in individual states where the disconnect between the White House's soothing words and the ugly political reality is most stark. While Democrats are under fire for the economy and spending, it is health care that has voters thinking it's time for political change.

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Associated Press

North Dakota's Sen. Byron Dorgan

Consider North Dakota. A recent Zogby poll showed 28% (you read that right) of state voters support "reform." A full 40% said they'd be less likely to vote for Democratic Sen. Byron Dorgan next year if he supports a bill. In a theoretical matchup with Republican Gov. John Hoeven (who has yet to announce), Mr. Hoeven wins 55% to 36%. Mr. Dorgan has been in the Senate 17 years; he won his last election with 68% of the vote. This should not be happening.

In Arkansas, 32% support this health-care legislation. Sen. Blanche Lincoln, also running next year, trails challengers by more than 50 points among the 56% of voters who strongly disapprove of the health plan. Senate Majority Leader Harry Reid, the public face of health reform, can barely break 38% approval in Nevada. In Colorado, where 55% of voters oppose a health bill, appointed Democratic Sen. Michael Bennet told CNN he'd vote for a bill even if it "cost him his job." Give the freshman credit for honesty.
Nor is this a red state/swing state phenomenon. In deep-blue Delaware, 46% oppose the health plan. Democrats pounded Delaware GOP Rep. Mike Castle, running for Senate, for voting against the House bill. That vote has in fact kept Mr. Castle leading his expected opponent, Beau Biden, the vice president's son. Chris Dodd helped author the Senate health bill and is up for re-election next year. He is arguably the Senate's most politically vulnerable Democrat.
Don't trust the polls? In the past weeks, four well known House Democrats announced they will not run for re-election. All are longtime incumbents; one, Tennessee's respected John Tanner, co-founded the Blue Dog coalition. These folks have seen the political handwriting on the wall.
Democrats have also been pulled by another White House promise: That once Americans witness reform, they will turn around. Yet even supporters know this ugly bill will not "fix" health care. The problems will remain—with more in addition—and Democrats will own them. Meanwhile, the backlash against the pending health-care legislation is seeping out to hamper Democrats' broader agenda. Pew this week published a poll in which it marveled (fretted?) over the "extent to which the public has moved in a conservative direction on a range of issues" since President Obama took office.
So why the stubborn insistence on passing health reform? Think big. The liberal wing of the party—the Barney Franks, the David Obeys—are focused beyond November 2010, to the long-term political prize. They want a health-care program that inevitably leads to a value-added tax and a permanent welfare state. Big government then becomes fact, and another Ronald Reagan becomes impossible. See Continental Europe.
The entitlement crazes of the 1930s and 1960s also caused a backlash, but liberal Democrats know the programs of those periods survived. They are more than happy to sacrifice a few Blue Dogs, a Blanche Lincoln, a Michael Bennet, if they can expand government so that in the long run it benefits the party of government.
What's extraordinary is that more Democrats have not wised up to the fact that they are being used as pawns in this larger liberal game. Maybe Mr. Obama will see a bump in the polls if health care passes; maybe not. What is certain is that this vote is becoming one that many in his party will not survive.
Write to: kim@wsj.com

 

ObamaCare and the Liberal Obsession

Every Democratic president since FDR has failed to pass national health insurance. The current legislation in Congress is likely the last chance to enact it.

If President Obama's health-care initiative fails, there is no longer a rationale for being a liberal in the United States. Everything else on liberalism's to-do list is footnotes.
Passing national health insurance has obsessed every Democratic president since Franklin Roosevelt. Even Harry Truman, for some conservatives a model of "moderate" Democratic politics, wanted it. Looking back, Truman wept and warned: "I've had some bitter disappointments as President, but the one that has troubled me most, in a personal way, has been the failure to defeat the organized opposition to a national compulsory health insurance program. But this opposition has only delayed and cannot stop the adoption of an indispensable federal health insurance plan."

Daniel Henninger discusses how passing health-care reform is a liberal obsession.

No other issue has consumed more political energy in the U.S. than "health-care reform." Congress's half-year preoccupation with health care is only the latest blip in the Democrats' long march to a public option.
As we head to the final act, one element of this history stands out: The liberals' repeated failure to get it done.
The Democratic Mecca—a real national health insurance system available to all—has always encountered stiff resistance in Congress, notably as now from moderate Democrats. In the 1960s, Senate Finance Chairman Russell Long (of Mary Landrieu's Louisiana) railed publicly against Medicare's costs but as now, questions about cost were obliterated.
Frustrated at the failure to pass their "National Health Insurance" bill during the presidency of Dwight Eisenhower, the Democrats ratcheted back from the Euro-style idea of FDR and Truman to a plan that would cover only Social Security beneficiaries, the elderly. This was Medicare.
Medicare failed all its initial votes in 1960. A compromise known as Kerr-Mills, which limited federal coverage to the "indigent" elderly, passed the Senate by a vote of 91-2. Many said then that Kerr-Mills addressed the U.S.'s main problem, which was medicine for the poor. Ronald Reagan supported Kerr-Mills, arguing that people "worth millions of dollars" shouldn't be getting health care paid for by government.
For Democratic liberals, a lot is never enough. With John Kennedy's election, they resubmitted Medicare for the elderly regardless of income.
The Democrats still couldn't pass a health-care entitlement on the scale of Social Security. The politics they threw into the effort was massive. They put 20,000 elderly in Madison Square Garden to hear JFK's oratory. Rallies were held in 45 cities. Organized labor ran campaigns against members of the Ways and Means Committee in their home districts. For all this, in July 1962 the Senate voted 52-48 against Medicare. JFK denounced the vote on TV.

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Corbis

JFK pleads for universal health care in Madison Square Garden in 1962.

It is a familiar story that Lyndon Johnson got Medicare passed as part of the Kennedy legacy. But for LBJ in 1965, the political planets were in perfect alignment. He had an overwhelming victory in the 1964 presidential campaign and huge congressional majorities. He had a robust economy, a gift of the Kennedy tax cut passed in early 1964. Also, no House hearings were held that year on the 296-page bill, which Democratic Sen. Philip Hart of Michigan complained was "one of the most complex set of social security amendments ever brought before this body."

Oh, and let us not overlook the party's concurrent quest for money transfers. In a moment of glee over the 1965 bill, Rep. Phil Burton of California, a member of the liberal pantheon, intoned: "All in all, our fair state and its people in the first year will be favored to the tune of some $550 million, a not modest sum." (Norms of spending "modesty" have changed since.)
The Democrats' persistent problems with this issue, including the Clintons' Health Security Act in 1994, suggests a victory for ObamaCare is no sure thing.
Nearly every defeat of broad public health coverage has come amid some turbulence that scared the public or politicians.
For Truman it was the Korean War. For JFK it was a recession, Vietnam and the Cuban missile crisis. Walter Lippmann wrote of JFK that a too-confident president was exceeding the public's reach. The Social Security Administration's own history of the Kennedy effort notes, "Some experts still had doubts about the reliability of the cost estimates for the bill."
Now Democrats say this vote is about "history." No, it's about their history. As with past failures to federalize health care, the air in 2009 is full of static—high unemployment, Afghanistan, a terrorist prison in Illinois and a petulant White House. The Democrats' familiar problems with the politics of universal health care have turned the bill into one of the most degraded legislative exercises in congressional history. Left-wing Dems like Howard Dean are screaming "kill" the Senate bill, suggesting a progressive Jonestown over it. Public support is below 40%.
This is probably the final death struggle for universal health care. They may let Harry Reid's Senate seat itself go down in the bloodbath over the 70-year obsession. Anyone remotely opposed to this idea had better step forward. History says ObamaCare isn't a done deal til the fat lady votes.
Write to henninger@wsj.com

 

SEIU Pulls Back on Supporting Bill Amid Concerns Bill Isn't Progressive Enough

By Jeffrey Young - 12/16/09 12:37 PM ET

The Service Employees International Union (SEIU) backed out of an event with other organizations promoting the Senate healthcare reform bill Wednesday over concerns about changes made to the legislation to accommodate centrist Democrats.

The SEIU had planned to participate in a Capitol Hill press conference along with the AARP, the liberal advocacy group Families USA, Consumers Union and the American Cancer Society Action Network. As recently as Tuesday morning, the organizations distributed an advisory to the news media that included the SEIU.

But the move by Senate Majority Leader Harry Reid (D-Nev.) to excise provisions of the healthcare reform bill to create a government-run public option health insurance program and to allow people between 55 and 64 years old to buy into Medicare gave the labor union pause, spokeswoman Lori Lodes said.

"That decision has to be made by our leaders and our members," Lodes said. The event with the AARP and the other groups was scheduled before Reid made changes to the bill.

The SEIU executive board will hold what Lodes described as an "emergency" meeting Wednesday night to decide how to move forward. "Right now, they don't have the information they need to make this decision," said Lodes, who added that the SEIU informed the other organizations on Tuesday they would not be joining the press conference.

The board meeting likely will not produce a final determination by the union about whether to support advancing the Senate healthcare bill, which not only lacks a public option and the Medicare buy-in but also would levy an excise tax on so-called Cadillac health insurance plans that some union members have, Lodes said.

"We will not have an absolute decision coming," largely because Reid has not released the final language of the healthcare bill, she said.

The Big Scare: President Obama: Federal Government 'Will Go Bankrupt' if Health Care Costs Are Not Reined In

ABC's Karen Travers reports from Washington:
President Obama told ABC News’ Charles Gibson in an interview that if Congress does not pass health care legislation that will bring down costs, the federal government “will go bankrupt.”
The president laid out a dire scenario of what will happen if his health care reform effort fails.
“If we don't pass it, here's the guarantee….your premiums will go up, your employers are going to load up more costs on you,” he said. “Potentially they're going to drop your coverage, because they just can't afford an increase of 25 percent, 30 percent in terms of the costs of providing health care to employees each and every year. “
The president said that the costs of Medicare and Medicaid are on an “unsustainable” trajectory and if there is no action taken to bring them down, “the federal government will go bankrupt.”
“This actually provides us the best chance of starting to bend the cost curve on the government expenditures in Medicare and Medicaid,” Obama said.
Watch Charlie Gibson’s interview with President Obama tonight on World News and check back on ABCNews.com for the full interview.
Obama told Gibson that anybody who says they are concerned about the rising deficit or worried about tax increases in the future has to support this health care bill.
“Because if we don't do this, nobody argues with the fact that health care costs are going to consume the entire federal budget,” the president said.
Obama is facing an increasingly skeptical American public when it comes to his push for health care reform.
The latest ABC News/Washington Post poll found that support for the health care reform package, while never robust, is now at a low ebb and opposition has been steadily growing stronger in intensity.
For the first time, a majority of those surveyed disapproved of the president’s work on health care (53 percent) and oppose the health care reform package making its way through Congress (51 percent, compared to 44 percent approval).
That seven-point margin for opposition is its most to date -- indeed statistically significant for the first time -- and the differential in intensity of sentiment has grown since September.
More on the ABC News/Washington Post poll HERE.