Amid harsh criticism of the insurance industry, the Senate Labor and Human Resources Committee approved a bill to require businesses to provide health insurance coverage to virtually all their workers.
Some senators expressed several reservations about the bill and indicated that major amendments will be forthcoming on the Senate floor.But they said they were acting Wednesday to convince both the insurance industry and the business community that they are serious about the bill.
The measure would require employers to provide basic health insurance coverage to workers employed more than 17.5 hours weekly. It passed on a 10-5 vote with all Democrats voting in favor and all Republicans, except for co- sponsor Sen. Lowell Weicker Jr., R-Conn., voting in opposition.
An amendment, to phase in coverage of businesses with five or fewer employees over five years, was passed on a voice vote.
Sen. Weicker, ranking Republican on the Small Business Committee, did not even favor that amendment. He said it will not satisfy the opponents who dominate small business lobbying groups, like the U.S. Chamber of Commerce and the National Federation of Independent Business.
Once Congress starts making exceptions, Sen. Weicker said, it is obviating the purpose of the legislation.
Even with the change, he emphasized, this is not something that will satisfy small business. They don't want any bill.
Sen. Weicker, as well as several Democrats, criticized the insurance industry for not developing proposals that would enhance the legislation and eliminate concerns about risk pools for small business.
The insurance industry has taken the attitude that the legislation will die on the Senate floor and it will just oppose the bill, Sen. Weicker said.
If the bill does die, the senator said he would support a commission to report to Congress in February 1989 on how to handle the problem of the 37 million to 38 million Americans who are uninsured.
Sen. Weicker made it clear he has already lost the financial support of small business groups and I'm not going to let this matter die.
Sen. Barbara Mikulski, D-Md., also criticized the insurance industry, saying she had asked the industry to develop alternatives and they have been unable to do so.
She added, I wanted creativity and I got a bureaucratic slowdown.
The Health Insurance Association of America has been working to produce an alternative proposal for the past six months. Spokeswoman Dona De Sanctis said that the HIAA board will vote on a proposal within the next month but that noting will be made public until the board decides whether or not to take the
Several senators expressed reservations about the six or seven regional risk pools that would be formed to allow small businesses to purchase insurance at rates comparable to larger companies.
The insurance industry opposes the pools because the Department of Health and HumanServices would select several carriers and all others would be excluded from the business.
The senators were concerned that the pools would require states with lower medical costs to support health coverage in higher-cost states.
Washington and Hawaii would subsidize California; Connecticut and Vermont would subsidize Massachusetts;, Indiana would subsidize Michigan; and Iowa would subsidize North Dakota and Missouri, Sen. Dan Quayle, R-Ind. complained.
Committee Chairman Edward Kennedy, D-Mass., said he will try to work out a solution to cross-subsidization complaints. But he added that senators should keep in mind that companies now offering health benefits subsidize deadbeats every day.
The legislation that passed the committee contains several changes from the original drafted by Sens. Kennedy and Weicker. The committee added a mental health benefit requiring a minimum of 45 days of hospitalization and up to 20 out-patient visits with a co-payment of 50 percent.
The bill mandates a health insurance program that provides hospital care, physician care, diagnostic tests and totally covered prenatal and well-baby care.
There is a catastrophic limit of $3,000 out-of-pocket for a family and maximum deductibles of $250 for an individual or $500 for a family. The employer would pay 80 percent of the premium and workers could not be asked to pay more than 20 percent of medical costs out-of-pocket.
But the legislation also spells out that companies with plans that give other or better benefits do not have to redraw their services if they are actuarially equivalent.
Committee staff members explained that companies are free to charge higher deductibles, co-insurance or premiums if they offer additional benefits such as pharmaceutical coverage.