Groups Scramble to Cut Deals

Posted September 16, 2009 at 6:57pm

With Senate Finance Chairman Max Baucus’ (D-Mont.) long-awaited health care proposal finally in hand on Wednesday, industry lobbyists, union officials and other downtown stakeholders immediately went to work war-gaming the complicated give-and-take that will culminate in next week’s markup.

“Everybody’s panicked,— a health care lobbyist said. “People right now are doing their best to understand the proposals and gearing up to make a play for amendments. You are trying to get your [Senate] champions to offer something, but then that potentially changes the math for the underlying bill.—

Organized labor was an early outspoken critic of Baucus’ plan after its unveiling, bashing the chairman’s mark as “a gift to the insurance industry.—

“It totally undermines health coverage at work, and it doesn’t provide affordable coverage if you’re out of work,— said Richard Kirsch, the national campaign manager for the union-backed coalition Health Care for America Now. “At work, there’s no responsibility for employers to pay for coverage, but there’s incentives for employers to offer lousy coverage.—

In response, Kirsch said his group before the Sept. 22 markup will pressure Finance Committee members to make concessions in face-to-face meetings and is conducting an “extensive grass-tops, grass-roots lobbying— campaign. On the eve of the proposal’s debut, the coalition announced a two-week, $1.2 million cable and broadcast television ad buy that criticizes insurance providers.

The television spot, titled “How to Get Rich,— is an attempt to portray “how America’s health insurance companies charge too much, pay overblown CEO salaries, and deny medical claims,— according to a coalition description.

Health Care for America Now includes the AFL-CIO, the American Federation of Teachers, the Service Employees International Union and other labor and community groups.

In addition to coverage requirements, unions are taking particular issue with a significant revenue raiser for Baucus’ $774 billion overhaul: an excise tax on insurers. According to the mark released Wednesday, one way to raise money to pay for the 46 million uninsured is by imposing a 35 percent levy on employer-provided plans that exceed $8,000 for individuals and $21,000 for families.

Chuck Loveless, a lobbyist for the American Federation of State, County and Municipal Employees, said that the lack of employer mandates and concerns about watered-down coverage are at the top of his union’s list of complaints. He said he also plans to aggressively push the Finance Committee to drop the excise tax proposal, which could disproportionately hit union card holders.

“We think the mark has significant flaws, and we’re pressing members of the Finance Committee to make changes to it,— Loveless said. “Chairman Baucus has made a Herculean effort to try and build bipartisan support for the bill, but in our judgment it has been at too high of a cost.—

“There’s unfair taxation in the bill,— he continued.

Loveless declined to name Finance Committee Members who are most inclined to deal on the proposed excise tax and other targets in organized labor’s sights, although Democratic Sens. John Kerry (Mass.), Jay Rockefeller (W.Va.), Ron Wyden (Ore.) and Maria Cantwell (Wash.) are all seen as the most inclined to entertain such requests.

“We have some key Senators on the committee who are going to press for significant changes on the bill,— Loveless said.

In perhaps his final public statement as AFL-CIO president, John Sweeney also took issue with Baucus’ excise tax proposal — and with the entire bill itself. The labor movement veteran said the chairman’s blueprint “absolutely fails to meet the most basic health care needs of working families, and it fails to meet the expectations we have set for our nation.—

“If you’re an individual who does not purchase private health coverage, it sticks you with a hefty tax penalty even though it fails to provide sufficient subsidies to make plans affordable for low- and moderate-income families … but if you’re an irresponsible employer who does not provide coverage, you get off scot-free,— Sweeney said.

Sweeney, who has been the AFL-CIO’s president since 1995, is being replaced at the labor federation’s constitutional convention this week in Pittsburgh by his longtime No. 2, Richard Trumka.

Health industry stakeholders and downtown lobbyists, too, moved quickly Wednesday to get a head start in the amendments game: lining up Senators to offer amendments that would be helpful to their clients, while at the same time trying to make sure that any costly new provisions are not paid out of their own clients’ bottom lines.

Beverage and food companies are particularly worried that more liberal members of the Finance Committee could try to make the plan more affordable for the middle class by levying an excise tax on their industry. “I think the risk is still out there that somebody might offer a beverage tax as a pay-for,— said Galen Reser, head of Pepsi’s Washington office. “We obviously would oppose that vigorously.—Pepsi is a member of the Americans Against Food Taxes, which has been advertising in papers such as the Washington Post against any excise taxes. That effort has been spearheaded by the American Beverage Association.

The association’s senior vice president for public affairs, Kevin Keane, said that in addition to the advertising, in print and on TV, the group plans to stay on high alert.

“We’re going to remain vigilant and continue to let lawmakers know where we stand, that it’s not the right way to go,— Keane said. “We’re certainly not going to solve the complexities of the health care system with a tax on soda pop.—

Similarly, the alcohol industry is also on guard.

“We’re waiting for the day when alcohol is not being considered as a pay-for,— said one alcohol industry insider.

Even groups that have otherwise been supportive of Baucus’ bill were surprisingly quiet the day he released his mark.

Health care stakeholders say they are wary of getting out in front on the Baucus bill in case they appear to be too supportive, which could lead to steeper cuts. Instead of mounting a full-scale assault against health care reform, the messaging of industry groups focused on supporting the process and specific issues that they would like addressed.Even vocal supporters of health care reform such as the AARP put out a muted response, saying they “continue to have concerns about provisions that would allow for large differences in premiums based on age that could leave millions of Americans still unable to afford the coverage they need.—

The association announced the next phase of its multimillion-dollar national ad campaign Wednesday, focusing its effort on the fight to protect Medicare benefits and eliminate insurers’ ability to deny coverage because of pre-existing medical conditions.

One veteran health care lobbyist said that despite the well-publicized deals that pharmaceutical and hospital industries cut with Baucus, those sectors may not be immune to additional burdens.

Some of the industries, such as the medical devicemakers and clinical labs, that are facing new taxes in the Baucus bill had already mobilized after the Finance chairman released a framework for his legislation last week.

Steve Ubl, president of AdvaMed, said his organization is supportive of Baucus’ overall effort, but wants to see the medical device tax removed.

“This specific policy we believe is bad policy,— Ubl said. Already, the industry has gotten the four Senators from Minnesota and Indiana — states with a large number of medical device manufacturing jobs — to push back against the tax proposal.

“We will continue to meet directly with those key Members representing states that have a vibrant medical technology community as well as other Members,— Ubl added.

One lobbyist who represents health insurance interests said the proposed new fee for the sector would be untenable and could result in some insurers facing effective tax rates of 70 percent or even higher.

“It’s unbelievable,— the lobbyist said.

Kate Ackley and Anna Palmer contributed to this report.