This week, the House approved three measures that were highlighted as health care priorities in President Bush’s State of the Union address (see The Source, 1/23/04). House Majority Leader Tom DeLay (R-TX) has indicated that the three bills would be bundled into one legislative package for Senate consideration.
On May 12, the House approved, 273-152, a bill (H.R. 4279) that would expand the use of tax-free savings accounts for health care costs. Sponsored by Rep. Jim McCrery (R-LA), the measure would allow employees to transfer up to $500 in unused benefits in a flexible spending arrangement (FSA) to the following year’s FSA or to a health savings account (HSA). Similar provisions were included in the Health Savings and Affordability Act (H.R. 2596), which was incorporated into the Medicare Prescription Drug, Improvement, and Modernization Act (P.L. 108-173) in June (see The Source, 6/27/03).
During consideration of the bill, the House defeated, 197-230, a substitute amendment by Rep. Pete Stark (D-CA) that would have allowed employees to transfer up to $500 in unused benefits in an FSA to the following year’s FSA. The amendment would have been offset by the inclusion of tax provisions designed to prevent American corporations from reincorporating overseas to avoid corporate taxes in the United States.
Rep. Stark offered a motion to recommit that would prohibit the transfer of funds from the Social Security or Medicare trust funds to pay for the bill. The motion was defeated, 202-224.
Calling the bill “far-reaching,” Rep. Melissa Hart (R-PA) stated, “Flexible spending accounts, flexible arrangements, medical savings accounts, [and] health savings accounts are all plans that give flexibility and discretion to employers and employees. They give power, economic power, to employers and employees.”
Rep. Rosa DeLauro (D-CT) voiced her support for the Stark amendment: “Like the underlying bill, the substitute permits up to $500 of unused benefits in the employee’s health flexible spending arrangement to be carried forward to the employee’s FSA account for the next year. However, this substitute does not permit unused benefits to be contributed to an employee’s health savings account, which in fact we know to be a tax shelter for the healthy and for the wealthy.”
On May 12, the House approved, 229-197, a bill (H.R. 4280) that would limit noneconomic medical malpractice awards and attorneys’ fees. The House approved an identical measure (H.R. 5) on March 13, 2003 (see The Source, 3/14/03). This year, the Senate has attempted to pass legislation (S. 2061/S. 2207) limiting medical malpractice awards and attorneys’ fees in lawsuits against obstetricians-gynecologists (ob-gyns) and emergency and trauma center personnel, but Senate Democrats blocked consideration of both bills (see The Source, 2/27/04 and 4/8/04). The minority party also blocked consideration of a measure (S. 11) to limit awards in lawsuits against all physicians in July (see The Source, 7/11/03).
H.R. 4280 would cap punitive damages at twice the economic damages, or at $250,000, whichever is greater. Under the bill, punitive damages could not be awarded in cases that did not grant economic awards, and courts would be required to find “a substantial probability” that the plaintiff could win punitive damages before a request for such damages could be filed.
During consideration of the bill, Rep. John Conyers (D-MI) offered a motion to recommit that would substitute the Medical Malpractice and Insurance Reform Act of 2004 (as-yet-unnumbered) for the text of the bill. Explaining that the motion would address the problem of frivolous lawsuits, he said that the bill “would require that both an attorney and a health care specialist submit an affidavit that the claim is warranted before malpractice action can be brought and imposes strict sanctions for attorneys who make frivolous pleadings.” The motion was defeated, 193-231.
Referring to the number of doctors forced out of practice due to rising insurance rates, Rep. Judy Biggert (R-IL) stated, “Women and children are the first to suffer in a crisis like this. As a mother and a grandmother, I don’t want to see pregnant women driving to another State because they can’t find an ob-gyn in their own area. I don’t want to see injured children transported miles away from their homes because there are no pediatric neurosurgeons left to treat head injuries. And I don’t want to see health insurance premiums climb so high that employers can no longer afford to provide benefits to their workers. We need reform and we need it now.”
Rep. Diana DeGette (D-CO) disagreed: “Proponents of this bill continue to represent it as relief for physicians. In reality, it is a bald effort by the insurance industry to pass off their costs on already suffering patients. This bill will disproportionately affect women, low-income individuals, and children because the caps on noneconomic damages will affect them. Since they do not make a lot of money, they will not have a lot of economic damages to be awarded by the courts.”
On May 13, the House approved, 252-162, a bill (H.R. 4281) designed to make health care more affordable for small businesses. The House approved a similar measure on June 19, 2003 (see The Source, 6/20/03).
H.R. 4281 would allow small businesses to come together to form associations for the purpose of purchasing health insurance at more affordable group rates. The bill would establish rules governing these associations, including certification, sponsorship, participation, coverage, contribution rates, benefit options, and termination. Regulation of association health plans (AHPs) would be overseen by the Department of Labor, rather than the states.
During consideration of the bill, the House defeated, 193-242, a substitute amendment by Rep. Ron Kind (D-WI) that would have replaced AHPs with a Small Employee Health Benefits Plan (SEHB) similar to the established Federal Employees Health Benefits Plan. Under the substitute, all employers with fewer than 100 employees would be eligible for the SEHB. Employers would be required to offer coverage to all employees who have completed three months of service and to pay at least 50 percent of the cost of the premium.
The House also defeated, 196-218, a motion to recommit offered by Rep. Carolyn McCarthy (D-NY). Details of the motion were not available at press time.
Contending that the bill would do away with consumer protections, Rep. Robert Andrews (D-NJ) stated, “Legislators across this country, Republican and Democrat, have fought for the right of women to have guaranteed mammograms and ob-gyn care, the right of people dealing with difficulties of substance abuse or mental health problems to have guaranteed coverage, the right of couples who wish to have children to have infertility coverage, the rights for diabetic care, for mental health care. These are rights that people have fought for and won in State legislatures across the country. Every single one of those protections is repealed should this bill become law. There will be zero consumer protections guaranteed to our constituents should this happen.”
Rep. Sam Johnson (R-TX) disagreed. “Some critics of the bill say there will be a loss in consumer protection because AHPs exempt small business from burdensome State mandates such as covering in vitro fertilization. Obviously, these mandates just cost the States more money. Large employers and unions have been exempt from State mandates since 1974, and they continue to offer fantastic coverage to working families. We ought to act now to help small businesses enjoy that same privilege or they will not work to offer any health coverage to employees and their family members.”
