At the outset of the current health care reform process, the country was focused on addressing three things: expanding health insurance access, controlling health care costs and improving health care quality. Sadly, thus far Congress has focused almost exclusively on regulation and rulemaking, and not on addressing the underlying costs of medical care that are driving up premiums and pricing health insurance out of reach of too many businesses, families and individuals.
In fact, the reform bills crafted by both the House of Representatives and the Senate include provisions which do more to exacerbate, rather than correct, the country's health care shortcomings.
For those who have yet to sort through the details of the reform proposals, here are eight reasons why employees and employers alike should be concerned about the bills being debated in Congress:
- Employer requirements in the reform bills discourage employment. Both the House and Senate bills place additional requirements on employers that, in many cases, will increase employer costs for each person they employ. For example, the House's bill includes an 8 percent employer payroll tax that is applied to employers that do not satisfy all of the new requirements. With unemployment at 26-year high, requirements that increase employer costs will only exacerbate the employment challenges in the United States. In fact, a study by the National Federation of Independent Business concluded that a national employer health care mandate would generate a net loss of more than 1.6 million jobs.
- "Pay or play" mandate could encourage employers to drop coverage. Both bills give employers the option to either continue offering health insurance to employees or drop their existing coverage and pay a tax. Many employers will choose to pay this tax because it is cheaper than the cost of providing health insurance. The Senate tax for a failure to offer health insurance is $750 per year per employee; compare this to the cost of thousands dollars a year to provide health insurance. This means many employees will be forced to buy coverage on their own (which will likely be more expensive than employer-sponsored coverage) or face a tax penalty for not purchasing coverage.
- Coverage will be more expensive for employees. Both bills will increase costs and reduce benefit flexibility by dictating what kinds of coverage options health insurers can offer businesses. These changes in benefit levels will lead to increased costs for employees.
- New taxes in Senate bill will drive up the cost of coverage. A multi-billion tax on health insurers is not tax deductible and will result in higher premiums, driving up costs for employees. Additionally, a new tax on high-cost insurance is based on a formula which will result in more and more employees having to pay the tax each year, including many union members who have bargained for robust health benefits.
- Government-run plan in the House bill will likely under-pay doctors, hospitals and other medical care providers. Medicare already pays hospitals less than it costs to deliver care, resulting in unpaid expenses being passed on to individuals with private health insurance. A government-run health plan is likely to add to this cost shift, further increasing the cost of health insurance for those with private coverage.
- A weak individual mandate in both bills, combined with the new insurance rules that will allow individuals to wait until they need medical care to buy insurance, will result in a less healthy insurance pool and higher costs for employees. The proposed reforms only work if all Americans are required to carry some kind of health insurance to ensure risks and costs are fairly distributed. However, the current proposals would allow individuals to purchase coverage only when they are sick or wish to receive health services. Allowing this kind of after-the-fact health insurance purchasing is like allowing someone to buy auto insurance after a crash and have that insurance policy pay for their cost of their car repairs.
- Higher costs for states in all bills. Many state governments are already buckling under the financial pressure of public programs, and both the Senate and House bills place a partially-unfunded mandate on states to expand their Medicaid programs. Reform must provide cash-strapped states with the resources necessary for this expansion.
- Weak cost containment in all bills. The focus of reform should be improving quality and controlling costs, yet neither bill makes substantive changes to improve efficiencies within our health care delivery system.
While people will differ on the exact details of how health care reform should be structured, no one is debating the fact that we must address the skyrocketing cost of health care before it bankrupts the nation. Yet, a year into this process, Congress has proven time and time again that it would rather tinker around the edges than deliver effective reforms.
My company, Anthem Blue Cross and Blue Shield, supports efforts to provide universal access to health insurance coverage, but firmly believes health care reform must be done in a way that is both reasonable and sustainable. The bills in Congress fail on both these fronts and run counter to the basic concept of "bending the cost curve" to achieve affordable, sustainable care.
There is still time for Congress to correct the flaws in its health care reform proposals, but it will take the voices of all Americans - from the assembly line worker to the corporate executive - to convince our elected officials to correct course and deliver the kind of reform the country agreed to at the beginning of this process.
Larry Schreiber is the president of Anthem Blue Cross and Blue Shield in Wisconsin.