Dems give insurers tax break in final bill

UPDATED:

Senate Democratic leaders say last-minute changes to the health care bill include giving nonprofit health insurance companies an exemption from the excise tax on insurers, a revision pushed by Sen. Carl Levin, who is a major recipient of campaign contributions form mega nonprofit Blue Cross Blue Shield.

The excise tax or fee on health insurance companies was expected to bring in $6.7 billion to help pay for the nearly $1 trillion bill, but the complete exemption for nonprofits sought by Mr. Levin, Michigan Democrat, would cut the revenue in half.

“The health insurance fee proposal in the pending Senate bill does not distinguish between the true nonprofit insurance companies and most profitable insurance companies in the country, and I’ve been working to fix that because I think that distinction is important,” Mr. Levin said in written statement to The Washington Times.

Nonprofit health insurers — which insure about 45 percent of Americans and include multistate companies such as CareFirst Inc. and Health Care Service Corp.— are virtually indistinguishable from their for-profit competitors.

The insurance premiums paid to nonprofits are often as high as those paid to for-profit insurance companies.

The top executives at nonprofits also take home pay checks just as huge as that of their for-profit counterparts.

For example, nonprofit Blue Cross Blue Shield of Massachusetts CEO Cleve Killingsworth’s total compensation in 2008 was just over $1 million compared to for-profit WellPoint Inc. CEO Angela Braly’s $1.13 pay package that year, according to health industry data service Atlantic Information Services, Inc.

Blue Cross Blue Shield of Michigan CEO Daniel Loepp made $910,269 in 2008.

Federal Elections Commission data shows he also gave Mr. Levin’s campaign committee $3,000 in the course of the 2007 and 2008 election cycles.

Mr. Levin’s top campaign contributor from the 2005 into the 2010 election cycles was Blue Cross Blue Shield, with total contributions of $48,000, according to campaign finance data OpenSecrets.org.

Mr. Levin originally drafted the exemption language as an amendment to the bill. But the language was added as Senate leaders wrote the final package behind closed doors.

Levin spokesman Bryan Thomas said the exemption language inserted into the bill is “significantly different” than what his boss proposed.

Still, Senate Majority Whip Richard J. Durbin, Illinois Democrat, said “some version” of the exemption will be in the final package unveiled Saturday morning. It was unclear early Saturday if nonprofits would get a pass on all or just some of the fee, or how the exemption would impact the bill’s price tag.

The bill is intended to expand coverage to millions of uninsured Americans, guarantee coverage by prohibiting denial of insurance forpre-existing medical conditions and hold down skyrocketing health care costs.

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