Health bill triggers some complaints from industry, though some will benefit

Health care companies stand to gain from legislation that would expand their market to millions of new consumers, but many are also complaining about specific provisions of the House health care overhaul bill, the New York Times reports. "Insurers do not like the provision to create a new government-run insurance program. Drug makers oppose billions of dollars in rebates they would have to give to the government over 10 years. Makers of artificial hips, heart defibrillators and other medical devices are not particularly happy about the proposed 2.5 percent tax on their products" (Wilson and Abelson, 11/8).

(Related KHN story: Proposed Tax Rattles Orthopedic Device Makers - Appleby, 10/14)

In addition, the House bill would permit Medicare to negotiate drug prices, a provision that has irked pharmaceutical companies, Bloomberg reports. Industry spokesman Ken Johnson said, "We remain convinced that the approach taken by the Senate Finance Committee provides the best blue print for comprehensive reform." That version would not allow Medicare to negotiate; Finance Committee senators also rejected the public option, which sits well with insurers (Dodge and Jensen, 11/9).

The House bill also would strip insurers of a federal anti-trust exemption that has allowed insurers to privately share information since 1945, the Wall Street Journal reports. It's unclear whether that change would result in more competition. "That is because of a widespread belief that the law is toothless and outdated, which might be another reason to get rid of it ... so many insurance companies are big national players, crossing state lines, and are easily able to look within their own experience for risk data. The more significant shift for the insurance industry could be stepped-up enforcement. Taking antitrust authority out of the hands of state agencies, which are often underfunded and understaffed, could result in more enforcement actions" (Johnson, 11/9).

And small business owners are finding faults in the bill, though it may be helpful to some, the Wall Street Journal reports in a separate story. The House's measure would require companies with payrolls higher than $500,000 to contribute much of the costs of health insurance premiums for their works. If they don't, they could face taxes between 2 percent and 8 percent depending on their payroll size. A spokesperson for a small business lobbying group called these provisions "the punitive employer mandates and atrocious new taxes." By contrast, the Senate Finance plan would not include a mandate, but would reward employers who provide coverage with tax credits (Maltby and Flandez, 11/9).

Business Insurance reports that some larger employers may worry the legislation would "Remove employers' longstanding ability to design health care plans. ... Prohibit employers offering health care plans to retirees from reducing benefits. ... Require employers to extend COBRA health care..." and more. "What's in reform for large employers? There is a lot of downside and not much upside," one business consultant said (Geisel, 11/9).