The most dramatic health care reform the nation has ever seen is starting to shape up, and business is starting to like—or at least, no longer quite hate—what it sees.
After months of intense lobbying and dramatic confrontation, a reform bill is gaining ground that steers a careful narrow path. It includes the greatly expanded coverage and key insurance regulations that the Obama administration most wants to see. But it also avoids many of the measures that business most feared, such as the public insurance option or the employer mandate to provide coverage.
The fate of this bill, arising from the Senate Finance Committee, was uncertain as Capital Thinking went to press. But thanks to all the hard policy work done this year, it is possible to ascertain what measures are gaining support on both sides of the aisle, as well as within the business community. As a result, it’s also possible to gauge the likely impact of those measures on business, whether they pass in this legislative round or in those to come.
As they’ve tracked the progress of various measures, business has found reform to be a “moving target,” says Todd Tuten, health care partner at Patton Boggs. There are competing proposals, each with hundreds of interrelated parts. And their impacts will vary from business to business, depending on its size, the composition of its workforce, and its current insurance offerings.
Reform is back in the ring
As recently as August, the prospects for comprehensive health care reform seemed to be on the ropes. A deadline for legislation set by President Obama expired, and congressional representatives found themselves being shouted down by reform opponents at town hall meetings in their home districts during the summer recess.
Then, in late August, the passing of Senator Edward Kennedy—a lifetime reform advocate and an acknowledged master of compromise—added a note of sobriety to the debate. In early September, President Obama delivered a policy address that added meat to what some political allies had criticized as vague principles for reform. Finally, in mid-September, Senate Finance Committee Chair Max Baucus released his “mark” on health care legislation, which largely adopted Obama’s principles. The race began to craft a bill that would earn 60 votes on the Senate floor, enough to overcome a potential filibuster.
The business community responded with a cautious enthusiasm. The U.S. Chamber of Commerce called the Baucus proposal “the best effort to date” coming from Congress. The National Federation of Independent Business applauded Baucus for giving “small business’ needs a high priority.” And the American Benefits Council called the bill “a critical step toward a comprehensive solution to the nation’s health care problems.”
If comprehensive health care reform does pass this year, many observers say it will be because of key lessons the Obama administration learned from the failure of President Bill Clinton to pass reform legislation in 1994. Perhaps the most important was to take a more inclusive approach—one that ensured that business interests were heard. “In 1994, the plan was constructed outside of public view,” says Billy Tauzin, a Republican congressman in the Clinton era who is now the director of PhRMA, the drug manufacturers’ association. “Congress was presented with a take-it-or-leave-it option, and we decided to leave it. … Obviously the difference this time is that many of us were invited into the discussion, including the great American public.”
Obama’s laissez-faire philosophy gave Baucus the room to conduct his extraordinary, months-long dialogue with stakeholders ranging from big unions and big health care players like Tauzin to his colleagues on the other side of the aisle. He had notable successes, such as convincing Tauzin’s group to help reduce drug spending by $80 billion over the next decade.
But as of press time, it was unknown whether Democrats could obtain even the single Republican vote required to claim bipartisanship in the Senate. Even the support of some fiscally conservative House Democrats was uncertain, notes Tuten.
