By Susan Heavey
WASHINGTON, Dec 19 (Reuters) - Proposed changes to the Senate's pending healthcare reform bill include a number of revisions targeting industry profits and taxes, including a move to ensure health insurers spent a certain amount of money on medical care, according to a document released on Saturday.
The changes, proposed as a group of amendments, must still be approved by the Senate before they can be added onto the already massive legislation, which lawmakers are struggling to finish before Christmas despite delay tactics by Republicans and a severe snowstorm in the nation's capital.
Under the proposal from Senate Democratic leader Harry Reid, health insurance plans for large groups would have to spend at least 85 cents out of every dollar on medical costs. That means just 15 cents could go toward overhead and executive salaries, among other things. Small groups or individual plans would have to spend at least 80 cents on the dollar for care.
That proportion of spending, known as a 'medical loss ratio,' has a major impact on how much profit companies can make and is closely eyed by Wall Street. Consumer groups and other critics have long argued that insurers aim to trim medical spending and raise customer costs to boost profits and please shareholders, a charge the industry has denied, saying premium increases mirror rising healthcare costs overall.
Taxes on for-profit health insurance companies such as Aetna Inc, Humana Inc and UnitedHealth Group Inc also could see significant changes.
The original Senate bill taxed the health insurance industry $6.7 billion a year. But under Saturday's proposal the industry would face a $2 billion tax in 2011 that increases over time to $10 billion in 2017.
Additionally, the bill's revisions delayed a $2 billion-a-year tax on medical device manufacturers until 2011 but raising it to $3 billion after 2017. The total tax on the industry would be unchanged at $20 billion over 10 years, a spokesman for Democratic Senator Evan Bayh said. Device makers are seeking to delay the tax until 2013.
Reid's changes also removed a provision that would have raised $5 billion through taxes on cosmetic surgery, wrinkle-filling injections and other similar procedures, replacing it with a tax on indoor tanning salons.
The so-called 'Botax' could have lowered demand for wrinkle-fillers, breast implants and other similar products made by companies such as Botox-maker Allergan Inc, Medicis Pharmaceutical Corp and Johnson & Johnson .
The first of two votes on the group of amendments is expected early Monday before the Senate later votes on the full legislation possibly as late as Christmas Eve. Changes to the bill could still come as lawmakers then work to combine the Senate's measure with one passed by the House of Representatives Nov. 7.
(Reporting by Susan Heavey; Editing by Eric Beech)
(For more on U.S. healthcare reform, click) Keywords: USA HEALTHCARE/INDUSTRY (sheavey@thomsonreuters.com; +1 202-354-5848; Reuters Messaging: susan.heavey.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, Dec 19 (Reuters) - Proposed changes to the Senate's pending healthcare reform bill include a number of revisions targeting industry profits and taxes, including a move to ensure health insurers spent a certain amount of money on medical care, according to a document released on Saturday.
The changes, proposed as a group of amendments, must still be approved by the Senate before they can be added onto the already massive legislation, which lawmakers are struggling to finish before Christmas despite delay tactics by Republicans and a severe snowstorm in the nation's capital.
Under the proposal from Senate Democratic leader Harry Reid, health insurance plans for large groups would have to spend at least 85 cents out of every dollar on medical costs. That means just 15 cents could go toward overhead and executive salaries, among other things. Small groups or individual plans would have to spend at least 80 cents on the dollar for care.
That proportion of spending, known as a 'medical loss ratio,' has a major impact on how much profit companies can make and is closely eyed by Wall Street. Consumer groups and other critics have long argued that insurers aim to trim medical spending and raise customer costs to boost profits and please shareholders, a charge the industry has denied, saying premium increases mirror rising healthcare costs overall.
Taxes on for-profit health insurance companies such as Aetna Inc, Humana Inc and UnitedHealth Group Inc also could see significant changes.
The original Senate bill taxed the health insurance industry $6.7 billion a year. But under Saturday's proposal the industry would face a $2 billion tax in 2011 that increases over time to $10 billion in 2017.
Additionally, the bill's revisions delayed a $2 billion-a-year tax on medical device manufacturers until 2011 but raising it to $3 billion after 2017. The total tax on the industry would be unchanged at $20 billion over 10 years, a spokesman for Democratic Senator Evan Bayh said. Device makers are seeking to delay the tax until 2013.
Reid's changes also removed a provision that would have raised $5 billion through taxes on cosmetic surgery, wrinkle-filling injections and other similar procedures, replacing it with a tax on indoor tanning salons.
The so-called 'Botax' could have lowered demand for wrinkle-fillers, breast implants and other similar products made by companies such as Botox-maker Allergan Inc, Medicis Pharmaceutical Corp and Johnson & Johnson .
The first of two votes on the group of amendments is expected early Monday before the Senate later votes on the full legislation possibly as late as Christmas Eve. Changes to the bill could still come as lawmakers then work to combine the Senate's measure with one passed by the House of Representatives Nov. 7.
(Reporting by Susan Heavey; Editing by Eric Beech)
(For more on U.S. healthcare reform, click) Keywords: USA HEALTHCARE/INDUSTRY (sheavey@thomsonreuters.com; +1 202-354-5848; Reuters Messaging: susan.heavey.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.