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Senate Dems Say Overhaul Urgent for Middle Class

By John Reichard, CQ HealthBeat Editor

November 10, 2009 -- Seeking to quell doubts that an overhaul would benefit middle-income Americans, four Senate Democrats held a press briefing Tuesday to say that sweeping legislation is an urgent matter for the middle class and for small businesses.

The briefing comes at a pivotal time. Whether the middle class sees overhaul legislation as a financial godsend or a looming fiscal nightmare will do much to determine the long term success of overhaul efforts.

Sorting out the cost picture will be no easy matter for either side in the overhaul debate. Republicans are pointing to huge tax hikes and enormous job losses as the likely outcome of the Democratic approach to an overhaul.

Minimum requirements for levels of health care that must be delivered under an overhaul will inevitably raise premiums, Republicans say. Insurers meanwhile insist that premiums will rise in general, fueled in part by new taxes on their products.

Democrats meanwhile point to various features of overhaul legislation they insist will make a big difference for middle-class families, ensuring access to coverage and protecting them from financial ruin. Perhaps their most potent argument is that the status quo cannot be permitted to continue and that the nation must try new approaches and improve them as needed if they prove to be flawed.

An overhaul will brake rising premiums that now jeopardize coverage for middle income Americans, Sen. Benjamin L. Cardin of Maryland asserted at the briefing.

"We think it's critically important that health care reform be aimed at helping middle income families in America," Cardin said.

"Ten years ago the cost for a family health insurance plan in my home state of Maryland was $6,000," he said. "Today that coverage costs $12,000. And it's projected by 2017 to be close to $24,000. Well, that's out of reach of many middle income families in America today."

An overhaul would help lower those costs by getting rid of a "hidden tax" of $1,100 per year that families pay in higher premiums to take care of the uninsured, Cardin said.

He added that small business pay premiums 20 percent higher than big companies for the same coverage. "That's not fair," he said. "It's not a predictable market," he added. It's not unusual that small businesses face sharp hikes of to 20 to 40 percent per year, he said.

Senate overhaul legislation will help assure the availability of lower, more stable premiums by establishing local insurance exchanges, he added. The exchanges will do so by creating larger pools of workers and by creating competition through choice, he said.

Sen. Kay Hagan of North Carolina said that under the Senate bill that people whose lose their jobs would be able to get help with premium payments to get back on their feet. In North Carolina insurance premiums are rising five times faster than wages, she noted.

"This bill is obviously targeted to help small businesses," she said, noting the availability of tax credits under the Senate Finance Committee proposal. In North Carolina, the self-employed and small businesses spent $3.8 billion on premiums last year and that number will rise to $9 billion by 2018 unless Congress acts, she said. Insurance companies also won't be able to charge "exorbitant" premiums for pre-existing conditions, she added.

Sen. Paul G. Kirk Jr. of Massachusetts asked, "What kind of a health insurance system is it that says we're not going to pay you any more because you got sicker than we thought you would?" Kirk said that an overhaul would end caps on benefit payouts by insurance companies, protecting the middle class in that way.

Marky Derbyshire, owner of Park Moving and Storage Co. in Baltimore, said he only offers individual coverage to his workers because family coverage is unaffordable. He said that small businesses consistently face double-digit premium hike and that is "absolutely not sustainable. It's not a debatable issue. "

"It's just collapsing for small businesses," he said.

While Cardin spoke of an overhaul ending the "hidden tax" represented by cost shifting to pay provider costs of providing some level of treatment for the uninsured, it's unclear how quickly those savings would materialize. The uninsured would gain coverage gradually, not immediately under overhaul plans.

Meanwhile, Senate Democrats on Tuesday were peppered with questions about how they would vote if tough language restricting abortion coverage were a part of Senate overhaul legislation. A number of Democrats said the language must be modified.

Sen. Ted Kaufman of Delaware issued a terse and forceful response to those who would subject the entire health care overhaul legislative effort to what he viewed as narrow litmus tests, or "standards," in his words.

Kaufman said "if we don't pass this legislation as everyone said, our present system will self destruct."

"I can tell you, I've been around this place for a long time, not just as a senator but as a staff person," he said. "Those that say, they're going to put up standards" [should know] that "if we do not pass this bill we will not revisit this area again for a very long time." Those would block it must think "hard, hard" about what they are doing if they act in a way that keeps the present system intact, he warned.

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