Legislative Update

April 1, 2003
Feel-good legislation like a bipartisan health-care bill is powerful medicine for ailing popularity polls in an election year.Lobbyists and association

Feel-good legislation like a bipartisan health-care bill is powerful medicine for ailing popularity polls in an election year.

Lobbyists and association executives looking out for the welfare of business owners have worn a path up Capitol Hill over the past few years to win pro-business reform of product liability, estate taxes, inside salesperson compensation and several other issues slowly working their way through the legislative process.

While there has been some real progress on these issues in the past year, none of them have the widespread appeal that excites most voters.

That's not the case with health-care reform. While President Clinton's ideas for a radically new health-care system went down in flames early in his first term, health care has resurfaced as a topic of interest to both sides of the aisle, as health-care legislation has flooded the halls of Congress. Legislators are now considering more than 45 bills, according to Dan Danner, vice president of federal governmental relations for the National Federation of Independent Business (NFIB), Washington, D.C.

Quality of care and consumer protection are the new buzzwords in health care, according to Leslie Pryor, senior director-government relations for the National Association of Wholesaler- Distributors, (NAW), Washington, D.C. "All of the focus is on how managed care has affected the U.S. public," she says.

Several of these bills call for mandates that would force health maintenance organizations (HMOs) and other managed-care programs to include coverage for specific treatments or illnesses, and include new liabilities that could trip up employers. Many of these provisions are included in "The Patients Bill of Rights" developed by a health-care commission appointed by President Clinton.

The most controversial legislation with these provisions now in Congress is the "Patient Access to Responsible Care Act (PARCA)," sponsored by Rep. Charlie Norwood, (R-Ga). Sen. Al D'Amato, (R-N.Y). sponsored an identical bill in the Senate last year . The most troubling aspect of these bills is the potential legal liability for distributors, says NAW's Pryor. If the bill were passed into law, she says, employees could sue employers for malpractice if they believed a plan's lack of benefits or denial of treatment adversely affected their health.

Pryor works on the lobbying subcommittee of the Health Benefits Coalition, a 40-member organization consisting of employers, representatives of health plans and trade associations. The group's goal is to chip away at support for PARCA on Capitol Hill, and to date it has gotten five Congressional leaders who had initially signed the bill to withdraw their support for it, says Pryor.

However, it has been tough to enlist widespread support against the bill from Republicans in an election year, she adds. Many Republicans want to present a united front behind the bill's powerful co-sponsors and don't want to do anything that could endanger the Republican majority-much less hurt their own chances for re-election in November.

Electrical distributors, independent reps, electrical manufacturers and other small businesses don't have to fear all of the proposed legislation now under consideration in Washington, as some of the bills under consideration have business owners in mind.

At press time, Rep. Bill Archer, (R-Texas), was working on new legislation that would include, along with a full boat of tax relief for individuals, new tax write-offs for small businesses. Current federal legislation is loaded with incentives for large and medium-sized companies to offer health insurance, and this bill would offer some of the same benefits to smaller companies.

Another bill is intended to reduce health program costs for business owners. "The Expansion of Portability and Health Insurance Coverage Act," introduced last year by Sen. Tim Hutchinson, (R-Ark.), encourages small businesses to purchase their health care through privately run, legitimate, association health plans (AHPs) to which they would have access through trade groups or other business associations.

The intent of Hutchinson's bill is to allow small-business owners to get insurance plans at a rate comparable to that of larger companies. Small-business owners often pay approximately 30% more than larger companies for similar benefits because of higher administrative costs, and costl y state mandates can add another 30% to premiums, according to Jack Faris, NFIB's president.

NFIB's Danner told a Senate panel studying the bill last year, "If small-business owners were able to purchase health insurance like large employers do, premiums would go down and coverage would go up-key ingredients to any health care reform.

"Under current law, big business has many advantages over small business when buying health insurance, such as purchasing power, no state mandates or rules and no premium taxes," he adds. We cannot truly have health care reform without AHPs. This will enable small-business owners to purchase high quality health care for their employees without spending significant amounts of federal and state dollars on government programs to achieve the same goal."

One small-business owner who testified at the same hearing has had to live through a health care nightmare that any electrical distributor can relate to. Dale Gillilland, owner of the American Foam Center in Arlington, Va., told the committee that he recently lost an employee because he cannot afford to offer health insurance.

"I used to provide health insurance for my employees," Gillilland said. "I stopped because I got priced out of the market after an employee had a lot of claims. I want to offer health insurance to my employees because it's the right thing to do, but I cannot afford it. If Sen. Hutchinson's bill becomes law, it would mean lower premiums for me and my employees and better coverage."

Expect to hear a lot more about health-care legislation from inside the Washington beltway in the coming months. Danner testified that the cost of health insurance remains the top concern of small-business owners, and that only 26% of employers with fewer than 10 employees can afford to even offer health insurance to employees. "Small business needs Congress to act quickly on this legislation," he says. "Passage of this bill is the single highest health-care priority for NFIB in the 105th Congress."