The budgetary meltdown in April, which marked a new low in the polarization of Washington, has repercussions on our insurance agenda—from the most mundane issues to the most important.
But first, this rant from your lobbyist: Do we really have to wait until the results of the next election are in before we can envision big legislative results? Will we ever see bipartisan “regular order” again? Are the thoughtful moderates nearing extinction? Has noise permanently overwhelmed substance?
There, I feel better.
On to the mundane. Efforts at overhauling the federal flood insurance program have for years been akin to Lucy yanking the football away from Charlie Brown—lots of determination and good intention but nothing to show for it. As a result, Congress has continually extended the same program, with its $18 billion hole, and it’s now set to expire in September.
The House Financial Services Committee made a good start in April by passing a reform package that would set the program on a more actuarially sound path. The Senate Banking Committee, though, has been off to an extremely slow start, with no clear path forward on reform.
What does this have to do with the nasty politics of fiscal reform? It’s no longer clear that the flood program passes the taste test of insurgent Republicans, such as Rep. Candice Miller, who is pushing a bill, favored by the Tea Party, to simply end the federal flood program. She’s not going to win, but if the program continues to be a big drain on the Treasury, right-wingers could seize on it as an example of everything that’s wrong with government. Whether or not you’re involved in selling flood policies, this is worth keeping your eye on.
On the much bigger issues, the budget battles demonstrated how difficult it will be to roll back any major provision of the healthcare reform law. Republicans were juiced to repeal the law after the election, and everyone knew that, with control of one half of one third of the government, that effort would hit a brick wall, which it did. Attempts to defund the enactment of the law have similarly fizzled.
Defunding the law might sound good, but it doesn’t change the law. The minimum medical loss ratio (MLR) formula is the law right now, regardless of whether or not the Department of Health and Human Services can enforce it.
Frothing-at-the-mouth conservatives want to upend every element of the law. The 2010 election results may have felt like a mandate, but Senate Majority Leader Harry Reid, D-Nev., still controls his chamber. It still takes 60 votes to get anything done in the Senate, and Republicans are 16 votes short. Barack Obama is still the president, the healthcare law is his signature domestic achievement, and he’s running for re-election on it. Outside of the 1099 issue and perhaps a couple of other nips and tucks, he’s not about to sign major reforms to the healthcare law.
Where does that leave us on getting broker comp exempted from the MLR calculation? Reps. Mike Rogers, R-Mich., and John Barrow, D-Ga., have introduced legislation in the House to do so, and it is attracting co-sponsors. We have a shot, albeit an uphill one, of getting it enacted. But we need to get traction in the next couple of months.
Anyone in Washington with a stake in health issues (that is, everyone) wants to tweak the law. Docs, hospitals, drug companies, medical device companies, labor unions, health plans, you name it. They all want a fix that they claim is discreet. Having met with Speaker Boehner’s health policy advisor a couple of times already this year, I can attest that she’s heard it all.
Some Republican leaders, notably Budget Committee chairman Paul Ryan, say they don’t want to do a damn thing to “improve” Obamacare. For them, it’s all about 2012 and total repeal.
Boehner, meanwhile, wants bills to gravitate up from committees and regular order. This bodes well for the handful of reform issues, such as MLR, that have the capacity to flow upward.
But how do we get MLR exclusion legislation to the finish line, given how laboriously the Senate moves on anything? To its credit, HHS has not demagogued the issue. We have a number of moderate Democratic friends in the Senate. We have two obstacles to overcome: Sen. Jay Rockefeller, D-W. Va., the godfather of the MLR; and the massive negative view of health plans among Democratic senatorial rank-and-file. If the view is that an MLR carve-out for brokers helps health plans, we’re doomed.
This year’s budget battles do not bode well for peaceful legislative harmony on any issues affecting our industry. Reps. Tip O’Neill, D-Mass., and Bob Michel, R-Ill., used to slug it out rhetorically, then go share a drink, play some links and work things out. Without the pressures of the right or left, I think John Boehner and Democratic whip Steny Hoyer would do the same.