Cadillac Plans & Playing Politics: The 11th Hour Efforts To Influence Health Care Reform


As the health care reform bill winds toward reconciliation, special interest groups and one ambitious GOP hopeful are making their last minute pushes to overhaul the bill or scrap it all together.

The major payment plan is still under scrutiny, and various groups are working hard on the idea of the excise tax on so-called “Cadillac Plans,” which refer to insurance plans that amount to more than $23,000 a year for a family of four. The Washington Post provides the main arguments both for and against the tax:

Supporters of the Senate provision say it would restore some equity in the tax system, which exempts employer-provided health benefits while forcing people who buy insurance on their own to use after-tax dollars. To avoid the tax, supporters predict, employers and employees would shift to less-generous plans that would make patients more sensitive to costs, slowing the growth in health-care spending. Employers, the theory goes, would put the savings into higher wages. […]

There are many issues with that assumption, one of the largest being that cost does not always correlate to the type of care. Indeed, as analysts have pointed out, plan cost varies by location as well as the type of industry. Experts also have other problems with the assumption that a less generous plan would force people into evaluating non-essential costs and procedures:

Separately, several health-care experts question whether shifting people into lower-cost plans is the best way to slow spending. It is possible, they concede, that the tax could move more employees into HMOs known for more efficient spending. But many markets lack such options.
It is more likely that employers would lower the cost of plans by increasing deductibles and co-pays, which skeptics say would not necessarily bring down health-care costs. Most costs are incurred by a minority of chronically ill patients. And health care is not like other markets, where consumers can make their own judgments based on quality and price; instead, patients make most major health-care decisions based on what their doctors tell them, skeptics point out.

In addition to the unresolved debate over how the reform will be funded, new questions have arisen over the special interest groups who are playing a large role in how the legislation is shaped.

But outside such established interest groups is a significant but more elusive collection of organizations, many of them particularly energized in opposition to Democratic health-care reform efforts. Most are organized as nonprofits, meaning they do not have to reveal many financial details beyond basic revenue and expenses. Some are bankrolled by charitable foundations with a political bent or by industries with a financial stake in the debate; nearly all use names that seem designed to obscure their origins.
The Partnership to Improve Patient Care, for example, headed by former congressman Tony Coelho (D-Calif.), was formed by the drug industry in November 2008 to lobby against binding government effectiveness studies, which could be used to determine what insurance companies must cover. The American Council on Science and Health is an industry-friendly group whose board member Betsy McCaughey helped set off the “death panels” frenzy last year.
“It’s sort of like money-laundering their PR,” said Lisa Graves, executive director of the Center for Media and Democracy, a liberal-leaning group that runs a Web site called “A lot of these groups are heavily funded by corporations and then don’t reveal it. They try to imply that they are funded primarily by individuals, but that’s clearly not the case.”

Meanwhile, Scott Brown, the GOP candidate for the the late Ted Kennedy’s senate seat, frames his campaign in simple terms: if he is elected in the Massachusetts Senate special election, he will stonewall health care reform:

“If you feel that Washington and the health care bill that they’re proposing is systemic of the problems in Washington and the failure to understand average people anymore, then you vote for me because as the 41st senator I can stop a lot of this stuff in its tracks,” Brown told POLITICO. “I can actually force them to go back to the drawing board.”

Congressional leaders indicated they would like to present the finalized bill to Obama before the State of the Union – as the address is rumored to fall in the last week of January or the first week of February, there should be an announcement on the final decisions soon.

Health-Care Reform Bill’s Proposed Tax On High-Cost Plans Raises Questions [The Washington Post]
How Interest Groups Behind Health-Care Legislation Are Financed Is Often Unclear [The Washington Post]
Health Bill At Issue In Mass. Special [Politico]
Will Obama State Of The Union Pre-Empt Lost’s Final Season Premiere? [TV By The Numbers]

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