By Scott Orr
A few months ago, the torturous battle over health-care reform seemed nearing conclusion as congressional Democrats and their thousand-page bill headed into the final stretch. All that was needed: a party-line vote in the Senate to prevail. Today, that blunt-force majority is history and so is the likelihood that the top-to-bottom reform the Democrats had envisioned will become law.
Now, health-care reform advocates are looking for a lighter legislative suitcase, one that may not contain a controversial provision that would require convenience stores and other small businesses to provide health-care coverage for their employees or face crippling fines.
The debate was transformed in a single day in January, when Massachusetts voters decided to fill the seat long held by the late health-care reform advocate Democratic Senator Edward M. Kennedy with Republican Scott Brown, who is not so keen on many of the provisions of the Senate health-care bill. This election left Democrats with 59 votes in the Senate, one short of the 60-vote super majority it needs to prevent Republicans from blocking the package.
Julie Fields, director of government relations at NACS, called the Massachusetts election of Brown "a game changer for the health-care debate. While it€™s too early to say that health-care reform is dead, it leaves the president and congressional Democrats in a tough position with a tight timeline," she said.
Fields said NACS supports reform that is aimed at cutting the cost of health care across the board and replacing the existing dysfunctional system with one that works for small businesses, workers, insurers and the government. In short, she said NACS supports health-care reform that will ease the spiraling cost of employer-provided coverage €" not make it more expensive.
As it took shape in the House and Senate last year, the Democrats€™ health-care bill came to include a number of extremely troubling provisions that would have profound effects on the convenience retailing industry, particularly the so-called "employer mandate" that would force small businesses to provide health-care coverage for all employees.
Other controversial provisions include penalty taxes to force all Americans to obtain health-care coverage, taxes on the most expensive employer provided insurance coverage and the government option under which the federal government would set up its own insurance business to compete with traditional insurers.
Most troubling for small businesses, however, is the employer mandate.
"The employer mandates in both the House and Senate bills amount to a tax on jobs that will drive up labor costs for retailers at a time when the struggling economy and razor-thin profit margins give us the least ability to absorb the added expense," said Neil Trautwein, vice president of the National Retail Federation.
"If labor costs increase, many retailers will have no choice but to reduce the size of their workforces. The net result of this legislation is that some workers who currently have both a job and health insurance might find themselves with neither," he said.
The transformative nature of the Massachusetts vote has hardly been lost on the Democrat leadership in Congress, as Senate Majority Leader Harry Reid (D-NV) and House Speaker Nancy Pelosi (D-CA) set about the task of devising an alternative path to getting a health-care reform package to the president€™s desk. There are alternatives, but none are easy.
One option is the reconciliation process, which requires only 51 Senate votes for passage. But that process also would open the measure up to Republican amendments that could delay, or more likely kill, the entire package.
The Democrats also could try to cut the Senate out of the process completely by having the House take up and pass the bill passed by the Senate in late December. That scenario also is unlikely since many House Democrats have said they cannot support the Senate version of the bill.
The problem for Senate Democrats is that they are now powerless to stop Republicans from filibustering. And with a bill of this size, there€™s a lot to dislike. Besides the basic arguments over the government€™s role in health care, a raft of sub-debates lurk under the covers on issues like abortion, taxes, health-care delivery and effects on Medicare and Medicaid.
Lyle Beckwith, NACS senior vice president of government relations, said the new dynamic on Capitol Hill makes it much more likely that the leadership will offer a more limited version of the bill, or bring it up provision by provision. This, he said, would make it difficult for the Democrats to gain passage of the measure€™s more controversial components, including the employer mandate.
"Now that the Democrats lack a supermajority in the Senate, the most likely path for health-care reform is for the Senate to try to move a scaled-back version, and that could mean the employer mandate provision, among others, might not become law after all," Beckwith added.
President Obama himself signaled willingness to accept this piecemeal approach, telling ABC News in an interview: "I would advise that we try to move quickly to coalesce around those elements of the package that people agree on." In the interview, Obama made no mention of forcing universal coverage on businesses, focusing instead on less controversial goals like reforming insurance industry rules and trimming the cost of health care.
"We know that we need insurance reform, that the health insurance companies are taking advantage of people... We know that we have to have some form of cost containment because if we don€™t, then our budgets are going to blow up, and we know that small businesses are going to need help so that they can provide health insurance to their families," Obama said.
A number of provisions could pass as part of a scaled-back version of the bill, one that would not include the universal coverage requirement. Rather than requiring small businesses to provide health care, one alternative would be for the government to provide subsidies and incentives to encourage them to do so.
Other provisions that might make sense as part of a smaller package include prohibiting insurance companies from rejecting applicants because of pre-existing conditions, allowing those age 55 to 65 to buy into Medicare and making Medicaid accessible to more low-income people.
Pelosi, meanwhile, said the House would take its first swipe at this piecemeal approach by separately considering a provision of the bill that would do away with the insurance industry€™s antitrust exemption.
The employer mandate has been among the most contentious provisions of the Democratic package from the outset. In a January letter to Pelosi and Reid, a formidable coalition of businesses, business organizations and associations €" including NACS €" told Congress that "the final legislative framework must get the fundamentals of health reform right." The letter is notable for the diversity of the interests it represents: local, state and national business groups, small businesses and big corporations, everyone from the Ames, Iowa, Chamber of Commerce to Xerox Corporation.
"Employer mandates will increase employer and employee costs and limit the flexibility and innovation that serves as the foundation of the employer-sponsored health-care system. Without this flexibility, employers will be prevented from designing and offering health plans that best reflect the needs of their workforce and make health coverage as affordable as possible for their employees," the coalition said.
The letter went on to express concerns over excise taxes on high-cost plans and a provision that would give special preference to union negotiated plans, which "merely exacerbates and concentrates the problem on all other employer-sponsored plans and the employees and families in them."
The letter demanded that any health-care package cut health-care costs while improving quality and value, that any changes not hurt federal and state finances and that the bill accelerate the nation€™s long-term economic recovery. "Health-care reform is not only about changing the rules for our health-care system, it also results in restructuring one-sixth of our economy €" and comes in the midst of historic economic turmoil," the letter noted.
While they€™re now seeking compromise with the Republicans, congressional Democrats angered many in the GOP by using their filibuster-proof majority in the Senate to sculpt a bill that gave no nod to Republican views. With the blessing of the White House, Democrats had settled on a strategy that would have delivered a final bill to both houses of Congress without a House-Senate conference.
Republicans immediately attacked that strategy, saying it violated President Obama€™s vow to conduct an open health-care debate. Michael Steele, chairman of the Republican National Committee, expressed outrage at the idea of considering the bill without the imprimatur of a conference committee: "You can€™t do something like health care in the dead of night, with no transparency, when you told us there€™s going to be transparency. You can€™t leave the opposition sitting outside the door looking in," he said.
Obama made clear during an address to Republicans in late January that he understands the political challenges that lie ahead: "I didn€™t choose to tackle this issue to get some legislative victory under my belt. And by now, it should be fairly obvious that I didn€™t take on health care because it was good politics," he said.
With his bulletproof majority in the Senate gone, Obama sounded conciliatory as he addressed Republicans at their party retreat on January 29 in Baltimore.
He asked them to consider the Democratic plan, but also to offer alternatives.
"As temperatures cool, I want everyone to take another look at the plan we€™ve proposed. There€™s a reason why many doctors, nurses and health-care experts who know our system best consider this approach a vast improvement over the status quo. But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors and stop insurance company abuses, let me know," Obama said.
The newly empowered Republicans, meanwhile, expressed confidence that the American people are behind them in opposing the kind of top-to-bottom overhaul of health care that had been sought by Obama and the Democrats.
U.S. House Minority Leader John Boehner (R-OH) said the president was correct when he suggested the bill had run into significantly strong opposition: "He referred to running into a buzz saw €" lobbyists and special interests that were holding up his health bill. Well, Mr. President, that buzz saw wasn€™t lobbyists and special interests. That buzz saw was the American people saying, 'Stop. We€™ve had enough of this.€™"
Even as the likelihood of sweeping health-care reform faded, Obama and the Democrats were looking for ways to resurrect the bill. Obama suggested a live televised meeting with the Democratic and Republican leadership and, in his earlier meeting with Republicans, he pleaded with members not to let the opportunity for reform slip away.
"Here€™s what I ask Congress, though: Don€™t walk away from reform, not now, not when we are so close. Let us find a way to come together and finish the job for the American people. Let€™s get it done," he said. The Republicans responded with applause.
Scott Orr is a freelance writer based in Washington, D.C.