Obama Bill Drops Proposed Employer Health Coverage Mandate

By Bill Leonard Feb 22, 2010
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President Barack Obama has unveiled a proposal to overhaul the U.S. health care system that would not require employers to provide health coverage for workers but would force most to pay into a fund that would help workers get insurance.

Hoping to revive stalled health care reform legislation, the president posted the proposal on the White House web site to weigh public reaction before a Feb. 25, 2010, health reform summit with congressional leaders from both parties.

In addition, Obama’s plan attempts to rein in high increases in rates charged by health insurance companies. And administration officials have not ruled out using a controversial procedure, called budget reconciliation, which would allow health care reform to pass without a Republican vote. [Visit SHRM Online's health care reform page.]

During a Feb. 22, 2010, teleconference with reporters, White House officials provided details of the president’s proposal, which attempts to blend legislation passed by the House and Senate at the end of 2009. Sources say that the White House’s reform package is similar to a conference report drafted by Democratic congressional leaders as they tried to merge the House (H.R. 3962) and Senate (H.R. 3590) reform bills.

The health reform debate on Capitol Hill stalled after Sen. Scott Brown, R-Mass., was elected in January 2010 to replace the late Sen. Edward Kennedy, D-Mass. Brown’s election raised the number of Republicans in the Senate to 41—the number of votes needed to sustain a filibuster and stop health care reform from advancing.

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In the teleconference, Dan Pfeiffer, the White House communications director, told reporters that the president’s proposal was largely based on H.R. 3590, which the Senate passed on Dec. 24, 2009. The White House included several provisions designed to alleviate the concerns of key Democratic leaders in the House. These include modifying a proposed excise tax on high-cost health insurance plans, increasing federal subsidies to help low-income families afford health insurance, and eliminating a special Medicare cost provision for Nebraska.

“Since the Senate passed their version of health reform on Christmas Eve, the House and Senate have engaged in a process to try to bridge the differences between those two bills,” Pfeiffer said during the teleconference. “What we’re going to put online today is our take on how to bridge those differences.”

The White House legislation, like the Senate bill, does not include a mandate requiring employers to offer health benefits to their workers. However, employers with 50 or more employees that don’t offer health benefits, and which meet federal guidelines, would have to pay a penalty to help defray the costs of providing federal health insurance subsidies.

The White House proposal departs from Senate and House bills by including a provision that would give federal regulators the power to block premium increases by private insurance companies. The legislation would create a rate board, called the Health Insurance Rate Authority, which would determine what increases are reasonable and justifiable. The seven-member board would have consumer, industry and medical representatives, as well as experts in health economics.

The Obama administration recently pointed to a report by the Department of Health and Human Services that showed that, on average, health care premiums were set to increase 14 percent nationwide during 2010—with some premium increases for individual coverage reaching as high as 39 percent.

By looking to merge the House and Senate bills, the White House appears to have rejected calls from Republicans to scrap the existing health care proposals and start anew. GOP leaders quickly criticized the president’s plan, saying it represented the same partisan politics and reform proposals that had failed to gain congressional approval the first time.

“Just days before a supposedly bipartisan health care summit, President Obama has tipped his hand—and the cards he’s holding come from the same partisan deck used by Democrats in the House and Senate,” Rep. John Kline, R-Minn., ranking minority member of the House Education and Labor Committee, said in a written statement. “Rather than hitting the reset button and coming to the negotiating table with a blank sheet of paper, the Obama administration has cobbled together a complex and costly plan that would reshape one-sixth of our economy and upend the way Americans get health care.”

White House officials countered by saying that they wanted more input from Republicans. However, Pfeiffer told reporters that the president would consider using the “budget reconciliation option” to push the proposal through the Congress if GOP leaders looked to block the reform effort from passing.

Senate rules allow budget reconciliation bills to advance with a simple majority of 51 votes, not the usual 60 votes required to invoke cloture and end filibusters. Republicans have stated that the reconciliation route could result in a backlash that would create further congressional gridlock and stall other key pieces of legislation.

Bill Leonard is a senior writer for SHRM.

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