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Industries Launch Defensive

The day after the Senate Finance Committee approved its massive health care legislation, Jody Dietel, an executive with WageWorks, a California-based benefits management company, flew to the nation’s capital to do damage control.

She is scheduled to meet today and Friday with key House staffers and lawmakers to prod them to reject a little-publicized provision in the Senate Finance bill. The measure caps at $2,500 annually the amount that employees can sock away for health care needs in flexible savings accounts.

Senate staffers say such accounts, which are not subject to taxes, encourage unnecessary health care spending.

“There is no evidence to support that in the industry,— said Dietel, executive director of a group called Save Flexible Spending Plans, which was formed by companies that manage these tax-advantaged accounts. She said limiting such accounts would make it harder for families to pay for medical needs often not covered by standard health insurance, such as their children’s braces or walkers for the old and disabled.

The group is just one of a multitude of industries and associations with a financial stake in health care reform that are escalating their lobbying or re-evaluating their strategies as they seek to influence the legislation as it moves into the next crucial phase. Democratic leaders are now melding two Senate and three House committee bills in preparation for floor votes in their respective chambers.

One health care consultant said a lot of people with interests in health care had high hopes for the Senate Finance blueprint. But many of them were disappointed, as evidenced from the flurry of criticism of the bill after the vote Tuesday.

“A lot of people around town are revisiting their strategies,— said the consultant, who predicted the lobbying on the health care measure will become “more aggressive— as the window for altering the legislation closes.

Already some well-heeled interests, such as the health insurance industry, have gone on the attack, running ads claiming the Finance Committee version will raise insurance premiums.

Also 30 unions took out full-page ads in newspapers Wednesday criticizing the Senate Finance version because it does not contain a public insurance option and would tax insurers that provide more expensive coverage.

But Andy Rosenberg, a Democratic lobbyist at Ogilvy Government Relations, said he did not believe that all health care interests will view it as productive to take such an aggressive approach and will be more likely to work behind the scenes to try to change the legislation.

“It is not a one-size-fits-all,— he said of the lobbying strategy.

Much of the lobbying efforts will be focused on the seven to 10 Senate Democratic moderates and Maine Republican Sen. Olympia Snowe, who will be key to garnering the 60 votes needed to overcome any filibuster efforts.

“You get more bang for your buck trying to influence the Senate,— Rosenberg said.

At the same time, a number of industries that are unhappy with the Senate Finance bill are also targeting the House in the hopes of preventing provisions that they dislike from creeping into that chamber’s measure. That way, when negotiators meet in conference to resolve the differences between the House and Senate, there is a greater likelihood that the final version will include compromises that they can accept.

Dietel said her group will lobby the House Ways and Means Committee, which did not adopt the cap but did bar the use of FSAs to pay for over-the-counter drugs. The Senate Finance Committee version only allows people to use their FSAs to pay for over-the-counter drugs if they get physician approval.

Dietel said her association was willing to compromise and accept an annual limit on FSAs of $5,000, the cap that the federal government and many companies now impose on their own. They also want any cap indexed for inflation, an adjustment that the Senate Finance version does not allow.

“We know everyone has to kick in,— she said.

Despite such lobbying efforts, Democratic leaders are under pressure to meet President Barack Obama’s directive that any plan must not increase the deficit and must not cost more than $900 billion.

The FSA caps, for example, would save about $14.6 billion over 10 years, according to the Joint Committee on Taxation.

Another cost-saving measure in the Senate Finance Committee bill would levy fees of about $40 billion over a decade on the medical device industry.

Manufacturers for such products as catheters and stents are mobilizing to kill the fee, which is only contained in the Senate Finance version.

This week, 241 organizations that include companies and associations related to the medical device industry wrote a letter to Senate Majority Leader Harry Reid (D-Nev.) and Speaker Nancy Pelosi (D-Calif.) complaining that the fee would “have a devastating impact on innovation, investment, and the nation’s economy.—

Mark Leahey, president of the Medical Device Manufacturers Association, said his group plans to fly in executives from medical device companies on Oct. 21 to make their case to lawmakers, particularly those who represent districts where such devices are produced.

But as many in the health industry prepare for the next battle, Senate Finance Chairman Max Baucus (D-Mont.) delivered a warning Wednesday to those who come across as too strident.

In an interview on CNN, Baucus said the health insurance industry “made a huge mistake by being so critical.—

“This train is leaving the station,— Baucus said. “There is a great sense of inevitability. So it’s much better to be part of the solution than opposed to the solution. And I say to groups, ‘Hey, as much as possible, let’s figure out a way to do this together.’—