Insurance Executive Pay Curbed in Health Bill

By GREG HITT and JANET ADAMY
WSJ

WASHINGTON – Democrats on the Senate Finance Committee voted Thursday to encourage limits on the compensation of insurance executives, responding to charges that expanding health insurance coverage would enrich insurance companies.

The action came as the influential panel brought debate to a close early Friday morning on sweeping legislation that would overhaul the nation's health system, setting the stage for a pivotal panel vote next week on President Barack Obama's top domestic priority.

Voting 14-8, the committee approved an amendment that would limit the tax deductibility of compensation for insurance executives to $500,000 a year. The limit would apply to executives at companies that get significant business generated by the bill's mandate that nearly all Americans must have insurance. Under current law, businesses can deduct up to $1 million a year in compensation for executives.

Sen. Blanche Lincoln (D., Ark.) said the limit is needed because insurance companies are going to reap a windfall of new customers under the legislation. "This is the right thing, and the right message to the American people," said Sen. Lincoln, who is up for reelection next year. The amendment was supported by all Democrats on the panel, plus Sen. Olympia Snowe (R., Maine).

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