Healthcare bill of rights stalled in Congress

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Aug 01, 2002

Washington-Employer groups contend that a human healthcare "bill of rights" may be very costly to small business owners, including veterinarians.

But by all accounts, a "healthcare bill of rights" won't make it through this session of Congress, but it will likely resurface. And the employer liability cap could likely bankrupt most veterinary practices.

Paul Dennett, vice president of health policy for the American Benefits Council, a group that represents Fortune 500 companies, tells DVM Newsmagazine, that even though S. 1052 passed the Senate and a version passed the House of Representatives there is currently a logjam on the language of the two bills, which have to be consolidated into one before the full House and Senate vote on it.

Dr. Dean Goldner, assistant director for AVMA's Governmental Relations Division, says there's no need to panic just yet. He says the legislation has a long way to go to before it becomes law, but it's an issue AVMA is keeping an eye on. AVMA has not actively lobbied for or against this legislation.

Just dormant

Make no mistake the legislation is certainly not dead, officials say, just dormant.

Look for a comeback after the November elections.

If passed, S. 1052 would allow people to sue health plans and employers in state courts for damages over disputes involving medically reviewable claims and sets no limits at all on the amounts of state court awards. The House bill has set a limit of $1.5 million, which still would likely bankrupt many veterinary practices. President Bush reportedly favors the milder House version of the legislation.

Dennett says both bills call for additional employer liability, one is just worse than the other.

The impact? The increased liability would likely cause small businesses to forego employee healthcare coverage altogether, Dennett says.

"For smaller businesses it would increase the regulatory burdens. I'm sure it will very likely result in smaller companies dropping healthcare coverage altogether, because they are already experiencing healthcare costs increasing 20-25 percent annually."

He says, "The impact on small businesses tends to be much more absolute. You get to the breaking point much more quickly. Fundamentally, it results in an issue of whether they can afford to provide health benefits to employees anymore."

No employer organizations "are actively encouraging that these bills are passed into law," he adds.

According to Dr. Marsha Heinke with OEM Inc., an accounting firm based in North Olmsted, Ohio, the rising costs of human healthcare insurance premiums and the uncertainty in Washington regarding a healthcare bill of rights would make it tough on veterinarians to remain competitive.

When you factor in wage inflation due to the competitive job market, rising pharmaceutical costs and evolving standard of care and technology-all have increased the costs of providing veterinary care.

"Now you are looking at the costs in terms of wages, salaries and benefit programs as well. Small businesses have always struggled in balancing what it offers to keep an employee base that satisfies client need."

Heinke adds that veterinary practices have been fortunate that people have wanted to work in veterinary hospitals because of their love of animals and willingness to work for less because of the contribution to helping care for animals.

So, the question begs: how do you maintain competition with other small businesses in the community and with other veterinary practices when you are faced with these escalating costs?

Heinke says there are no easy answers.

"The tendency has been to beef up the wage structure as much as possible to keep people, and, unfortunately, that takes away from benefit programs," she explains.

If veterinary practice owners are subjected to additional liabilities in offering this coverage, it makes it even tougher.

Industry estimates have been that about one-third of veterinary practices don't provide healthcare coverage to rank and file employees. Heinke adds that in recent years more and more practices seem to be adding some kind of healthcare coverage for employees.

Another issue

While veterinarians are using many different plans for employees, the cost structure is also an issue.

Typically, practices are paying between 50-80 percent of coverage, but some practices are even picking up 100 percent of healthcare coverage.

Heinke adds, "Now you have the patients bill of rights, and if you aren't providing for employees now, should you do it? Based on this pending legislation, it's almost scary to add health insurance coverage to the mix. It certainly looks like what Congress may have intended from the start has turned into a monster. And if this thing gets through, it is going to have a horrible, horrible impact on small businesses because of the risks of liability if an insurance provider disallows a claim made by an employee."