Debate on the healthcare bills being crafted by various congressional committees last week centered on mandating employer-paid health coverage-an issue that threatens to derail the precarious movement for reform.
With the congressional clock ticking, most of the committees with jurisdiction over healthcare reform were still in the earliest stages of fashioning a bill. It's far from clear that reform legislation requiring businesses to finance health insurance for their workers can ultimately garner enough support to win passage. Republicans are nearly unanimous in their opposition to employer mandates, and many Democrats, too, remain steadfastly opposed to them.
Still, lawmakers have so far failed to come up with a more popular alternative for achieving universal coverage. As a result, employer mandates are, for now, advancing in the legislative arena.
Congress is "still focusing primarily on employer mandates, and still hasn't focused on how markets work," said Christine Ferguson, counsel to Sen. John Chafee (R-R.I.), a moderate Republican who favors individual requirements for health coverage over employer mandates. With less than 60 legislative days remaining this term, Ms. Ferguson said she was "pessimistic" about the prospects for Congress completing action on healthcare reform this year, given the deep divisions that must be conquered in such a brief time.
The Senate Labor and Human Resources Committee was the first full committee to vote on employer mandates, as it continued consideration last week of a reform bill crafted by its chairman, Sen. Edward M. Kennedy (D-Mass.).
On the day of the vote, Senate Majority Leader George Mitchell (D-Maine) distributed an endorsement of employer mandates, which was signed by 1,300 businesses and organizations nationwide. Mr. Mitchell said the endorsement showed that "the political clout of the forces supporting comprehensive reform is formidable" and claimed the endorsement represented more than 93 million Americans. That's "155 times the membership of the (National Federation of Independent Businesses)," which has been the star opponent of employer mandates, Mr. Mitchell said.
Like the Clinton plan, the bill advanced by Mr. Kennedy would require most businesses to pay 80% of insurance premium costs for their workers. Those with more than 1,000 employees would be required to pay an additional 1% payroll tax, while those with five or fewer workers would pay a 2% payroll tax in lieu of meeting the mandate.
During a lengthy debate, critics-most of them Republicans-charged that employer mandates would cost jobs, and supporters-most of them Democrats-contended that they represented the fairest and most practical strategy for achieving universal coverage. Ultimately, the Senate panel voted 10-7 to defeat an amendment that would have removed mandates from the bill.
The mandate was later modified to further ease the burden on small businesses.
Democrats also beat back amendments that would have stripped away private insurance premium caps, barred abortion coverage from the basic benefits plan and eliminated federal financing for the health benefits of early retirees.
After months spent seeking a compromise reform plan with conservative Democrats and moderate Republicans, Senate Finance Committee Chairman Daniel Moynihan (D-N.Y.) last week unveiled his own reform plan, which is a close kin to the Clinton plan. It was immediately dismissed by Republicans.
The bill differs from the Clinton plan significantly in financing, calling for only $33 billion in Medicare cuts over a five-year period, compared with more than $120 billion in the Clinton plan. To make up the difference, the plan would levy a $1.76 per pack tax on cigarettes and would charge businesses with more than 500 employees a 1% tax on payrolls.
Meanwhile, a bipartisan group of senators on the panel has been meeting privately in an effort to strike a compromise. Among the options being debated by the group are various "trigger" proposals, under which an employer mandate would only take effect if market-oriented changes failed to meet specific goals for expanding coverage.
In the House, the Ways and Means panel began action on healthcare reform under the leadership of its new chairman, Rep. Sam Gibbons (D-Fla.). The measure builds on the bill passed by the health subcommittee in March, which would, among other things, impose a Clinton-like mandate on employers and create a new Medicare program to cover the poor and the uninsured.
Under a retooled version of the plan, released by Mr. Gibbons last week, the federal government would skim part of employers' premium contributions for dual-income families to offset the cost of expanded coverage. The new plan would also give tax credits to small, low-wage firms, add a new home- and community-based-care benefit, and create a funding pool for academic health centers.
After a private committee meeting that was described as awkward by members who attended, Mr. Gibbons and the panel's former chairman, indicted Rep. Dan Rostenkowski (D-Ill.), praised each other and vowed to cooperate to produce a healthcare bill.
But a handful of committee Democrats were still holding out.
Rep. Peter Hoagland (D-Neb.) took issue with the new Medicare program in the bill and likened it to a single-payer plan. He predicted such a proposal could not pass the House and said it would be a "mistake" to bring the plan to a vote. He said he would offer his own managed competition-based plan instead.
Another panel, the House Education and Labor subcommittee on labor-management relations, late last week approved a single-payer healthcare reform bill on a voice vote.
The action made the subcommittee the first, and probably the last, congressional panel to approve such a reform measure. Late last month, the subcommittee also voted favorably on a reform bill similar to President Clinton's.
In other developments, Roman Catholic healthcare leaders were assured by a top Clinton administration official that their hospitals and other not-for-profit healthcare facilities would continue to enjoy tax-exempt status under reform.
"There's strong support for continuing tax-exempt status, and I don't think that's going to change," Alice Rivlin, deputy director of the Office of Management and Budget, said in an address to the Catholic Health Association's annual assembly last week in Philadelphia (See related story, p. 8).
Many of the estimated 1,200 people who attended the meeting were concerned about the tax-exempt status of their institutions after reform. Some government officials and executives of for-profit companies have attacked such exemptions, saying many not-for-profits don't do enough charitable work to justify tax breaks.