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Click here to return to this month's Article Index The Cutting Edge™ September 2004Public PolicyMaking Sense of it All By John Satagaj, WMMA Legislative Counsel, email@jsatlaw.com As this Congress enters its home stretch-maybe-there sure is a lot of unfinished business still on the table. In last month's column I focused my attention on one critical item for us, the repeal and replacement of the Foreign Sales Corporation/Extraterritorial Income (FSC/ETI) tax program. Every day, I go back and forth between optimism and pessimism. One of the items that always has been high on the President's health care agenda is the association health plan (AHP) legislation. This bill would allow trade associations to offer health care insurance programs on a national scale. This means they would not have to offer the different benefits mandated by various states. I have always thought, in the short term, that the AHPs would provide you a measure of premium relief. Insurers would ally themselves with some big associations and offer loss leader premium cuts to capture market share. I have always been skeptical of the long term value of the legislation. Once the market share has been captured, premium increases seem logical. AHPs do nothing to actually change the costs of providing health care. Having said all that, I had thought the Republican controlled Congress would produce a win for the President. The House has passed the bill, a couple of times now, without too much problem. In the Senate, the story has been different. While the Blue Cross/Blue Shields of the country, along with Senator Ted Kennedy (D-MA), oppose the bill, it has been a Republican Senator, Judd Gregg (R-NH) that has blocked movement on the bill. Senator Gregg chairs the subcommittee with jurisdiction over the bill. My thought was that election year politics would persuade Senator Gregg to give the President a win. For a while, I even though it might be the trade-off for a minimum wage increase. Unions and Senator Kennedy get the minimum wage increase and they are forced to accept the enactment of the AHP. Turns out I was wrong. Senator Gregg has stuck by his guns. In a letter to a local New Hampshire newspaper, Gregg said that the danger is that insurers and businesses would be allowed to "cherry pick" participants who have only young, healthy employees. Businesses that tend to employ older workers or have employees with costly conditions would be forced to buy outside the AHP group. Gregg indicated he would introduce legislation that captures the benefits of AHPs without the controversial elements, by creating a level playing field for everyone who purchases health insurance. The fact that the minimum wage increase was not passed by the Senate was a surprise in itself. In an election year, Republicans have responded to the pressure in the past to take the issue off the table so it does not linger as a campaign issue. I expected them to add something to it, either the AHP as I alluded to above, or more likely some sort of tax relief. The effort was moving according to script. Senator Kennedy was able to extract a commitment to offer an amendment to a class action reform. Since the class action reform bill had been developing bi-partisan momentum it appeared likely the Senator would get his way. And indeed, the Republicans were preparing a modest package of tax relief sweeteners. But Senators began to maneuver to "pile on" other initiatives. Quicker than you can say "summer recess," the class action reform bill was pulled and the minimum wage increase shifted from the likely column to the campaign issue column. At the beginning of this column, I started out by suggesting that this Congress just might not finish up soon. There is plenty of talk of a lame duck session after the elections. Congress is experiencing tremendous appropriations heartburn once again and a lot of folks think they will avoid the tough decisions before the elections. Oddly enough, if they do, it might kick start an issue we have worked on all this year. As you know, the depreciation "bonus" will expire at the end of this year. We worked to get Congress to consider it during the FSC/ETI bill but no one would bite. I can conjure up a scenario in a lame duck session in which all of a sudden the expiring provision takes on a sense of urgency, and when we least expect it, Congress does something right. Who says I am not an optimist? It is hard to make sense of it all, isn't it? Table of Contents
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