Senate takes up insurance bill


WASHINGTON -- One of the toughest parts of the health insurance problem in the United States is that many small business can't afford coverage for their employees. Now, as part of a weeklong focus on healthcare, Senate Republican leaders have brought to the floor their chief solution, and it has a chance of passing.

The legislation would trim premiums for small businesses and, on balance, add an estimated 600,000 uninsured people to the private coverage rolls, while also reducing the ranks of those with government-financed benefits. Similar bills have come up in the past, but this one appears to have better prospects of succeeding.

Critics warn that the bill would pre-empt state laws that spell out benefits that insurers must cover and protect workers who are older and sicker from large premium increases. The problem, they say, is that overriding the state requirements could trigger a race to the bottom as employers cut costs by replacing existing plans with bare-bones policies.

As a result, this week's struggle over the GOP plan embodies one of the central challenges of health care reform: How to improve the lot of the uninsured without eroding the benefits of those who already have protection.

California, for example, has 23 specific benefits that insurers must provide and another 14 benefits that must be offered, usually at additional cost. Some mandatory California benefits and services, including reconstructive surgery, osteoporosis treatment and acupuncture, could be placed in jeopardy if the Senate bill passes.

Both California Attorney General Bill Lockyer and Insurance Commissioner John Garamendi are warning the bill will undermine consumer protections, as are many of their peers in other states. The American Cancer Society, the American Diabetes Association, and the seniors group AARP also oppose the bill. The American Medical Association has expressed "strong concerns."

"This bill seems to have a very simple concept behind it: You take a bunch of dry cleaners and pool them together, and because they are pooled together, they can get lower costs," said Robert Laszewski, a health care consultant and former insurance executive. "It's a lot more complicated than that." Of the 46 million uninsured people in the United States, eight in 10 are workers or their family members. With the cost of a family policy now averaging about $11,000 a year, small business employees are the least likely to have coverage. Fewer than 40 percent of those in companies with three to nine employees get insurance coverage through their jobs.

The National Federation of Independent Business, the National Association of Realtors and the Associated Builders and Contractors support the Senate legislation.

The bill's chief sponsor, Sen. Michael Enzi, a Wyoming Republican and chairman of the Health, Education, Labor and Pensions Committee, has tried to address critics' concerns by softening some of the provisions of the House version of the bill. His efforts have won him the support of Democratic Sen. Ben Nelson of Nebraska, a former state insurance regulator.

"This legislation still keeps the power of oversight and consumer protection in the hands of state insurance commissioners," Enzi said.

The Democratic alternative to Enzi's bill, sponsored by Sen. Richard Durbin, Democrat of Illinois, would preserve state coverage requirements and would provide tax credits to help employers obtain coverage for low-wage workers.

Ricardo Alonso-Zaldivar writes for the Los Angeles Times.

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