Max Baucus (D-Mont.)
Jay Timmons
Pete Sepp
WASHINGTON (Legal Newsline)-Health care overhaul legislation approved Tuesday by the U.S. Senate Finance Committee falls woefully short when it comes to reducing costs and curbing lawsuit abuse, groups say.
The 14-9 vote of the Democrat-backed $829 billion proposal moves the bill closer to being merged with another Senate proposal aimed at overhauling how health insurance companies do business.
One Republican on the committee -- Olympia Snowe of Maine -- voted for the bill that will require every American to have health insurance.
"Today we reached a critical milestone in our effort to reform our health care system," said President Barack Obama, who has made health care reform his top domestic initiative.
The plan that emerged from committee Tuesday is one of five proposals before Congress to reform the nation's health care system. In the House and Senate, lawmakers will separately develop one health care reform bill. The bills that pass out of the House and Senate will be merged in conference committee.
Among other things, the Senate Finance Committee plan would expand Medicaid, create a new health insurance exchange and provide tax credits to help low- and middle-income earners to purchase health plans.
The plan would also bar insurers from charging more or denying coverage because of pre-existing conditions or dropping coverage when someone becomes seriously ill.
"This balanced, common‐sense bill begins to shave the federal deficits," said committee Chairman Max Baucus, D-Mont. "The American people deserve a health care system that works for them and this vote is a critical step toward that goal."
While the America's Healthy Future Act would reduce the federal deficit by $81 billion because it raises $121 billion in taxes on insurers, drug companies and medical device companies and would reduce government health care spending, critics, including the National Association of Manufacturers, said the plan does not do enough to cut businesses' costs.
"NAM remains deeply concerned that the Senate Finance Committee's bill overall will add costs to the health care system and, by extension, the manufacturing community, on top of the already spiraling costs manufacturers and their employees face today," NAM Executive Vice President Jay Timmons said. "Specifically, we believe the excise tax imposed on insurance plans will have a negative economic impact on many manufacturers."
The plan calls for a new excise tax on insurance plans worth more than $8,000 for singles and $21,000 for families.
As for legal reforms being absent from the plan, Timmons added: "We are disappointed that the bill does not address the costly issue of 'defensive medicine' through medical malpractice reform in any meaningful way."
Republicans all along have said tort reform needs to be a part of the eventual health care overhaul, but the nation's trial attorneys -- a key Democratic constituency -- have successfully stymied GOP efforts to reduce frivolous lawsuits and other legal abuses.
In a statement, the 362,000-member National Taxpayers Union said the Senate Finance Committee should have rejected the Baucus-drafted bill, saying the plan will saddle middle class families with billions in new taxes.
"Instead of trimming back wasteful spending and passing common-sense reforms, like implementing fundamental tax reform, allowing purchases of health insurance across state lines, or proposing strong tort reform, the Senate Finance Committee today chose a path that would heap further burdens on one the most over-leveraged groups on Earth: the U.S. taxpayer," NTU Vice President for Policy and Communications Pete Sepp said.
A Manhattan Institute study released Tuesday said medical malpractice litigation has driven up health care costs dramatically. The direct cost of medical malpractice litigation is roughly $30.4 billion annually, the report said.
Last week, the director of the nonpartisan Congressional Budget Office, Douglas Elmendorf, said in a letter to members of the Senate Finance Committee that enacting a series of legal reforms would save U.S. taxpayers billions of dollars annually.
A $250,000 cap on damages for pain and suffering and a $500,000 cap on punitive damages and restricting the statute of limitations on malpractice claims would save taxpayers about $54 billion over the next 10 years, Elmendorf said.
From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.