President Barack Obama spoke directly to insurance agents in his State of the Union address, as he specifically reiterated support for excising what he called a "flaw" in the legislation that insurance producers and other small business people consider onerous.
That provision, effective in 2012, requires all businesses, nonprofit entities and governments to file a 1099 form with the Internal Revenue Service reporting any purchases of goods or services of $600 or more in a tax year. Under current law, the 1099 requirement only applies to services when the vendor is an unincorporated person or business.Three Democratic senators recently announced their backing of a Republican bill to abolish the provision; it provides no offset for the approximately $219 million it is expected to raise over a 10-year period (BestWire, Jan. 24, 2011).
"Let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you," Obama said.
He defended the act as a deficit reducer, alluding to nonpartisan Congressional Budget Office estimates of savings of hundreds of millions of dollars over a decade or more. But he also allowed for common ground on tort reform and medical professional liability costs.
"Still, I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year -- medical malpractice reform to rein in frivolous lawsuits," Obama said.
Congress and the president must do more than look, said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies. "We urge the president to support meaningful medical liability tort reforms and actively work with Congress to pass legislation that will reduce the need for defensive medicine and encourage doctors to work in higher risk specialties vital to our nation's health," he said in a statement.
The president also extolled the virtues of reforms, including steps to lower prescription drug costs for seniors and allow young adults to remain on parents' insurance policies. "What I'm not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition ," he said.
Presenting the Republican response, House Budget Committee Chairman Paul Ryan, R-Wis., said, "The president mentioned the need for regulatory reform to ease the burden on American businesses. We agree -- and we think his health care law would be a great place to start."
Karen Ignagni, president and chief executive officer of America's Health Insurance Plans, said more needs to be done to lower the cost of care. "Reducing health care cost growth is essential if the nation is to achieve the urgent priorities outlined by the president, such as spurring small business hiring, reducing the deficit and enhancing our competitiveness in the global marketplace," she said in a statement.
(By Sean P. Carr, Washington Bureau Manager: sean.carr@ambest.com)
