June 05 2009 0comment

Business Working Behind Scenes To Shape Health Care Reform

Business First of Louisville
by Kent Hoover Washington Bureau Chief

June will be a critical month for health care reform as two Senate committees begin writing legislation that aims to extend insurance coverage to every American.

President Obama has mobilized the grass-roots supporters that helped elect him to lobby for his vision of health care reform, which includes offering Americans a government-run health plan as an alternative to private insurance.

A coalition of labor unions and progressive organizations plans to spend $82 million on organizing efforts, advertising, research and lobbying to support the Obama plan.

Business groups, meanwhile, mostly are working behind the scenes to shape the legislation.

Although they have serious concerns about some of the proposals — including the public plan option and a mandate for employers to provide insurance — few are trying to block health care reform at this point. The cost of health insurance has become so burdensome that something needs to be done, they agree.

“Nobody supports the status quo,” said James Gelfand, the U.S. Chamber of Commerce’s senior manager of health policy. “We absolutely have to have reform.”

For most business groups, that means reining in health care costs and reforming insurance markets so that employers have more choices in the types of plans available. To achieve those goals, however, businesses might have to swallow some bitter medicine.

Employer mandate top concern
An employer mandate tops the list of concerns for many business groups, just as it did when Bill Clinton pushed his health care reform plan in the 1990s.

The Senate bill might include a provision that would require employers to either provide health insurance to their employees or pay a fee to the federal government.

Some small-business owners don’t have a problem with that, including members of the Main Street Alliance, which is part of the coalition lobbying for the Obama plan.

“The way our system works now, where responsible employers offer coverage and others don’t, leaves us in a situation with an unlevel playing field,” 11 alliance members said in a statement submitted to the Senate Finance Committee.

“If we’re contributing but other employers aren’t, that gives them a financial advantage over us,” the statement said. “We need to level the playing field through a system where everyone pitches in a reasonable amount.”

But most business lobbyists contend that employers who can afford to provide health insurance do so already because it helps them attract and keep good employees.

Businesses that don’t provide health insurance tend to be “marginally profitable,” said Denny Dennis, senior research fellow at the NFIB Research Foundation.

Imposing a “play-or-pay” insurance requirement on these businesses would cost the economy more than 1.6 million jobs, according to a National Federation of Independent Business study.

Tax credits could offset some of the costs for providing this coverage, but Gelfand said the credits that are under discussion are “extremely limited.”

Congress also could exempt some small businesses — such as firms with less than $500,000 in annual payroll — from the employer mandate. But many business groups see this proposal as an attempt to split the business community, not as meaningful relief.

“We oppose small-business carve-outs because they make it easier for Congress to apply mandates against larger employers,” said Neil Trautwein, vice president and employee benefits policy counsel of the National Retail Federation. “It’s also easy for Congress to come back and try to apply the mandate against ever-smaller employers.

“No matter how good the surrounding health care reform, a bill containing an employer mandate would be too high a price to pay for reform,” Trautwein said.

Public plan or market reforms?