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Employers agree on two things: Something has to be done about health care costs and the uninsured. And none of the presidential candidates has figured out what. The good news for companies is that no one is proposing a government run, single-payer health care system, which is anathema to the business community. The bad news is that what is being proposed would either undercut the existing system, which firms want to keep, or impose more costs on employers.
Employers have banded together in coalitions to work with the next Congress to tackle the key problems. All agree that something must be done to hold down insurance premiums, which rose 78% between 2001 and 2007. And all want to cover more of the uninsured, an estimated 47 million in 2006, up nearly 9 million from 2000.
Plans offered by Democratic and Republican candidates would expand health coverage through the private insurance market with a supporting role played by public insurance programs such as Medicaid. But employers do not like the way the candidates would go about doing it.
Firms object to John McCain's plan to change the tax code. McCain, the all-but-certain GOP presidential nominee, would provide a refundable tax credit that would replace the existing tax exclusion for employer-sponsored health plans. One leader from the business community called this idea a nonstarter. "Employers simply don't trust government to manage health care coverage as effectively as they can."
Health care policy experts, as well as many in the business community, say removing the tax benefit could cause employers to stop offering coverage to workers. "Removing employers from the equation is revolutionary and may cause small employers to opt out of the system," says Paul Fronstin of the Employee Benefit Research Institute.
"Pay or play" proposals by Democrats Hillary Clinton and Barack Obama are also unacceptable to business. Both candidates would require employers to offer health care coverage to their employees or pay into a fund to help subsidize coverage for those who can't afford insurance. "Mandating employers to offer coverage or requiring them to pay the government…will only force employers to eliminate jobs, move more jobs offshore, stunt future job growth or raise consumer prices," says Helen Darling, president of the National Business Group on Health.
Meanwhile, there are some portions of each plan that employers do like. McCain's plan, for example, would allow small firms and the self-employed to buy insurance coverage through associations. Clinton's plan to make everyone have health insurance is supported by many in the business community. The idea is that with a bigger insurance pool, premiums would be lower for individuals and businesses alike. "Requiring individual coverage will strengthen and stabilize health insurance risk pools by including more healthy people currently without coverage," says Darling.
Employers' biggest gripe: The plans don't do much to hold down spiraling costs. All of the candidates mention that health care cost growth is a critical problem, but none has developed a comprehensive strategy for tackling it. They have a laundry list of initiatives that they hope will hold down costs -- electronic health records, disease management, price transparency -- but all are untested when it comes to holding down expenses, says Fronstin.
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POSTED BY: Steaming Pile (February 25, 2008 03:32 PM)
And why would single-payer be a bad idea? I would think employers would just love to be able to get out from under this responsibility. It costs them big money, and I'm sure the required surtax will be less than what they're paying now, once the bureaucracy is sufficiently streamlined. No one can tell me the current system of customer non-service makes your typical government agency look like the model of efficiency by comparison.
POSTED BY: Common Sense (February 25, 2008 03:58 PM)
Mr. Pile; a single payer system is the worst of all possible outcomes. If you have any experience with the current Medicare operation as it applies to individuals; you will no doubt agree. I have never seen a more inefficient system. Example: Why buy a wheelchair for $150 when you can lease it for $60 a month in perpetuity. Insane. Yes. But, this is what happens when you have a single payer system. Let's all remember that you may not like the current situation but CHANGE is sometimes really really bad!!!
POSTED BY: By the numbers (February 25, 2008 04:58 PM)
I was surprised to find that the biggest drain on our current system wasn't poor uninsured but young healthy people who could afford insurance but choose not to buy it. This isn't our problem -- until they break a leg snowboarding or get in a car wreck and blow off their bill (which unlike insurance probably is unaffordable for them. The rest of us get to pay for their care in the form of higher medical costs and insurance premiums. The other problem with our current system is that the uninsured can't negotiate the rates with providers and so those who can least afford medical care are charged the most for it. And finally, the poor are more likely to defer medical care when it could be had cheaply (in the form of preventive measures) and end up getting the most expensive form of treatment, an ER stay. And once again, we all pay. So I have no problem with requiring everyone to buy insurance and offering assistance to the people who can't afford it. This will enlarge the risk pool, allow more efficient care because of the power of negotiation with providers for all users of health care, and keep people out of ER as much as possible.
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