Harkin Plan May Allow Tax Incentives For Encouragin Health

Armen Hareyan's picture

A plan being developed by Sen. Tom Harkin (D-Iowa) would give tax credits to employers offering wellness programs, such as periodic screenings for health problems and counseling, to encourage workers to adopt healthier lifestyles, the New York Times reports. Lawmakers also are considering making it easier for employers to use financial rewards or penalties to promote healthy behavior among employees. Under current law, employers can only offer incentives for workers to improve their health that are no more than 20% of the cost of their health coverage.

Frank McArdle, a health policy expert with Hewitt Associates, said, "Wellness and prevention programs have become a mainstream part of the benefits offered by large employers, and it's virtually certain that Congress will include incentives for such programs" in a health reform bill.

Critics say that rules holding people financially responsible for their health status and lifestyle could be unfair and that firms should not be intruding on the private lives of their workers. National Workrights Institute President Lewis Maltby said, "You are supposed to be paid on the basis of how you do your job, not how often you go to the gym or how many cheeseburgers you eat."

An NIH study in the current issue of Health Affairs states that unhealthy behavior by some workers can affect other employees by raising the cost of covering the group. The researchers wrote, "The core ethical justification for penalty programs is that employees should be held responsible for voluntary actions that cause harm to others," but should not be held to standards that are "unreasonably difficult or medically inadvisable" (Pear, New York Times, 5/10).

Although some members of the Senate Finance Committee are "touting" the panel's public roundtables on health reform "as a signal of a new bipartisan, open approach to lawmaking," other members, as well as aides and lobbyists, "question if the sessions are anything more than window dressing before members retreat behind closed doors to write a bill," Roll Call reports. The last of the meetings is scheduled for Tuesday and will focus on how to pay for health reform. An aide to committee Max Baucus (D-Mont.), who is spearheading the talks, said the meetings "satisfy the chairman's commitment to transparency while allowing for frank discussions among members and stakeholders." Harkin said Baucus is "opening the doors, he's doing (reform) in a bipartisan fashion." Sen. Olympia Snowe (R-Maine) said the discussions focus on contentious issues early in the process of creating reform legislation and give groups a chance to be heard.

However, critics say the roundtables "amount to more style than substance" and are putting off important decisions on the most sweeping changes, according to Roll Call. Committee ranking member Chuck Grassley (R-Iowa) said, "I'm not sure (the roundtables are) going to make the decisions any easier because what you've got to do is bite the bullet, and it's going to be tough whether you're a Republican or a Democrat," noting that lawmakers have not yet discussed compromising on issues such as whether to mandate that everyone be covered by health insurance. Sen. Orrin Hatch (R-Utah) said that "sooner or later there's going to be hard work and that's where you'll find the real legislating." He added that committee members will seek final decisions on issues such as how to fund an overhaul only in closed-door talks.

Health care industry representatives who have participated in the talks say the panel cannot give significant consideration to the multitude of proposals presented to it during the meetings, which include more than 70 participants.


An unnamed public health lobbyist said, "The apparent lack of inclusiveness was one of the problems that brought down health care reform during the Clinton administration," adding, "So this time, they will try to avoid that problem by having public meetings with lots of people and organizations represented." The lobbyist also said, "The real work will be done behind the scenes, as it virtually always is with every complicated policy issue" (Langel, Roll Call, 5/11).

Administration Efforts
Obama administration health aides are "fully engaged in laying the groundwork for an expected summertime debate" over health care overhaul legislation, but their actions have "been confined to a consultative role," according to Roll Call. The administration has been responding to developments in Congress "with ... proactive efforts primarily in the form of overarching principles," Roll Call reports. Roll Call also examines the role to be played in the overhaul effort by several White House officials (Koffler, Roll Call, 5/11).

The Wall Street Journal on Monday examined the role of White House Office of Health Reform Director Nancy-Ann DeParle, as well as her background. According to the Journal, her goal is to "seek broad support for [President Obama's] ambitious plans for a health care overhaul -- or at least, ensure that big players don't declare war on the Obama program" (Adamy, Wall Street Journal, 5/11).

Public Plan Contention
The administration and supporters are "scrambling to contain a full-throated ideological debate" over a public insurance option, fearing that such an argument could derail health reform, according to the Chicago Tribune. Conservatives, who believe the proposal to be a "potential Achilles heel in Obama's health care plan," are saying a public plan would lead to government intervention in personal medical decisions, the Tribune reports. On the other hand, advocates of a single-payer system are pressing Obama and Democratic leaders to "stand firm" behind the public option, according to the Tribune.

Baucus said, "Everybody needs to keep their powder dry. We have a huge opportunity to accomplish very significant health reform. ... Let's not have any sparks that could light a fire." Snowe said, "This has become a lightning rod," adding, "There is a lot of suspicion out there. ... I'm afraid this could easily be used as an excuse for not moving any further" (Levey, Chicago Tribune, 5/10).

The cost of Obama's health care overhaul plan presents one of the biggest threats to reform, the AP/Houston Chronicle reports. The plan is estimated to cost about $1.2 trillion to $1.5 trillion over 10 years, about half of which would be paid for by the health reform trust fund Obama included in his budget plan, according to economists and other experts. Before presenting overhaul bills to the whole Senate in the summer, committee leaders first must convince their own members that reform "won't break the bank," the AP/Chronicle reports. Sen. Mike Enzi (R-Wyo.), ranking member on the Senate Health, Education, Labor and Pensions Committee, said, "Unless we halt skyrocketing health care costs, any attempt to expand coverage will be financially unsustainable." Sen. Ron Wyden (D-Ore.) said, "You go to a town meeting and people are talking about bailout fatigue." He added, "They like the president. They think he's a straight shooter," but "they are concerned about the amount of money that is heading out the door, and the debts their kids are going to have to absorb."

Provisions being considered to contain costs include linking reimbursements for doctors and hospitals to the quality of care provided, setting limits on tax exemptions for employer-sponsored coverage and mandating that everyone obtain insurance (Alonso-Zaldivar, AP/Houston Chronicle, 5/10).

Republican lawmakers are pursuing two separate and conflicting goals in order to prepare for the health care debate, according to The Hill. Republicans such as Grassley and Enzi are active members of the committees that will draft the Senate's overhaul bills, aiming to achieve Obama's goals. At the same time, Republicans in both the House and Senate are working to fight Obama and the Democrats by developing their own health plan (Young, The Hill, 5/9).

A group known as Conservatives for Patients' Rights began airing television spots last week that feature stories of patients who faced long waits for operations, were denied necessary medicine or had to come to the U.S. for treatment because of shortcomings in the health care systems of Canada and the U.K., the Washington Post reports. In a voiceover, the group's founder Rick Scott says, "Before government rushes to overhaul health care, listen to those who already have government-run health care. Tell Congress to listen, too." Scott, a former hospital CEO, founded the effort using $5 million of his own money and $15 million from supporters. He said in an interview, "Everybody wants to say I'm against Obama's plan, but I'm not necessarily," adding that the "bottom line is that this is happening fast, and there is not much of a debate going on about what will happen if we go down this path." He said, "I believe that free-market principles will solve our health care problems." According to the Post, Scott's campaign has "alarmed many Democrats and liberal health care advocates, who are pushing back with attacks highlighting Scott's ouster as head of the Columbia/HCA health care company amid a fraud investigation in the 1990s" (Eggen, Washington Post, 5/11).