Grandfathering vote sparks renewed health reform debate

The Senate voted 59-40 Wednesday to reject a technical Republican motion that provided a chance for both parties to debate healthcare reform one last time before recessing ahead of midterm elections.

"This resolution is a political stunt," Senate Finance Chairman Max Baucus (D-Mont.) said. "It’s an election-season effort to take potshots at the new healthcare reform law."

The precipitating event was the federal regulation detailing the grandfathering provision of the law, which exempts existing health plans from certain requirements such as having to offer benefits without cost sharing. Sen. Mike Enzi (R-Wyo.) introduced a resolution of disapproval calling for a do-over on the regulation, which many businesses say is too onerous.

"At least 47 separate times, President Obama promised ‘If you like what you have you can keep it.’ Unfortunately, the Obama administration has already broken that promise," Enzi said on the floor before his motion came up for a vote.

"The final result of this new regulation will be that all Americans will eventually be forced to buy the kind of health insurance the federal government thinks you should have," he added. "Never mind that you can’t afford it. Never mind that employers will be less likely to hire new workers and will probably even have to lay off workers."

Democrats and the White House responded that repealing the provision would undo important consumer protections and cause chaos.

"By dismantling the (regulation) that set out the conditions under which health plans can qualify for 'grandfather' status, the resolution would limit individuals' and businesses' choice to keep the plan they had in place when the Affordable Care Act was enacted," says the White House statement of policy. "Adoption of the joint resolution would result in significant uncertainty as to what kind of changes may be made to coverage without a loss of grandfather status."

The U.S. Chamber of Commerce has made repeal of the provision a priority.

"Rather than allowing plans to continue operating in the manner they are accustomed to," executive vice-president R. Bruce Josten wrote in a letter to senators, "the regulation specifies numerous ways by which such plans would lose grandfathered status. Thus, many existing plans would be forced to change in order to comply with an array of new mandates. In our view, this regulation violates Congressional intent and does not live up to the promises of proponents of the new law."

According to HHS estimates:

  • 40 percent to 67 percent of individual policies will lose grandfathered status by 2011;
  • 34 percent to 64 percent of large employer group plans (100 or more employees) will lose their grandfathered status by 2013: and
  • 49 percent to 80 percent of small employer group plans (three to 99 employees) will lose their grandfathered status by 2013.

That doesn't mean those plans would no longer be offered, only that they would have to comply with new mandates of the health reform law.