Letter opposing H.R. 4872, "Health Care & Education Affordability Reconciliation Act of 2010"

TO THE MEMBERS OF THE UNITED STATES SENATE:

The U.S. Chamber of Commerce, the world's largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, strongly opposes H.R. 4872, "Health Care & Education Affordability Reconciliation Act of 2010," which would make even worse the "Patient Protection and Affordable Care Act," the deeply flawed health care legislation signed into law by President Obama yesterday. Moreover, the Chamber strongly opposes the process by which this legislation is being considered. Congressional leadership rejected the traditional conference committee process to address differences between the Senate- and House-passed health care bills in order to exploit parliamentary procedures that short circuit Senate consideration of legislation. The result of this process is a cobbled-together bill that either fails to address or makes worse the problems of the
new law:

• Employer Mandate: The bill would worsen the job-killing mandate by increasing the penalty on employers from $750 to $2,000 per employee. According to the Congressional Budget Office and Joint Tax Committee, this requirement would have the effect of raising taxes on employers by $25 billion more than the new law. Worse, these penalties would now include part-time workers. If an employee is offered quality health benefits, but has a low income and obtains an Exchange subsidy, an employer would be fined $3,000 for each such employee.
• New Taxes: H.R. 4872 would expand upon the significant new tax increases and mandates in the new law. It would impose a new 3.8 percent tax on investment income, establish new fees on selected industries, codify the economic substance doctrine, and make black liquor ineligible for the cellulosic biofuel producer credit. The bill also includes a long term hidden tax by deferring the "Cadillac tax" on certain high cost health plans until 2018. The number of Americans that will ultimately suffer from this hidden tax will mushroom each year because the tax is indexed to inflation—the growth in the Consumer Price Index—rather than the much higher growth rate of healthcare costs. In the end, this new tax will ensnare a growing number of Americans, much like the growing problem of the Alternative Minimum Tax.
• Dangerous Entitlements and Medicare Cuts: The bill would further eviscerate the Medicare Advantage program, which could cause many more Americans to be forced out of private insurance, leaving them with fewer options from which to choose. Worse, the Medicaid federal-state partnership program is essentially federalized, with the federal government covering 100 percent of the program's expansion at the outset, but scaling down only to 90 percent in all future years.
• Special Deals: This bill would greatly expand the scope and number of special deals, like the "Cornhusker Kickback," included in the new health care law that President Obama signed yesterday. Moreover, H.R. 4872 does not eliminate provisions related to Louisiana, Connecticut, plains states, and other regions. Worse yet, the legislation appears to create a new preferential treatment for Tennessee in the form of special disproportionate share hospital funds.
• Onerous Plan Requirements: The bill would force many requirements on all "grandfathered" plans, which were supposed to be insulated from the jarring changes the bill will impose on the rest of the market, including limits on waiting periods, regulating lifetime limits, and forcing plans to cover individuals up to age 26 as children. These requirements would increase premiums for those with employer-sponsored health insurance, and worse yet, are effective almost immediately – a burden that employers cannot easily meet.
• Dangerous Amendments: The business community is concerned by a number of possible amendments that could be added to make the reconciliation bill even worse, including efforts to create a government-run public option, allowing states to ignore ERISA and implement single-payer plans, and gradually expanding current government programs like Medicare and Medicaid in order to pave the way toward a single-payer system.

The Chamber urges you to oppose H.R. 4872. The substance of this legislation makes the new health care law even worse. Healthcare—which comprises one sixth of the American economy—is too important an issue to be addressed with parliamentary tricks that stifle consideration and debate.

Sincerely,

R. Bruce Josten