U.S. Chamber Calls on Senator Reid to Produce Meaningful Health Care Reform | U.S. Chamber of Commerce

U.S. Chamber Calls on Senator Reid to Produce Meaningful Health Care Reform

Monday, October 12, 2009 - 8:00pm

Meaningful Health Care Reform

WASHINGTON, D.C.—U.S. Chamber of Commerce Executive Vice President of Government Affairs Bruce Josten issued the following statement following the Senate Finance Committee's vote on "America's Healthy Future Act":

"Although it was the best effort to date, the Senate Finance Committee missed an opportunity to create a truly bipartisan bill to reform our nation's health care system. As the Senate Majority Leader begins to reshape this bill behind closed doors, it is our sincere hope that he considers the impact this legislation could have on the business community.

One of the primary goals of health care reform is the overriding need to reduce ever-escalating costs for both consumers and employers. The Senate Finance bill increases premiums, raises taxes, and creates a new entitlement that will add to the nation's growing debt.

America's job creators and working families are counting on Majority Leader Reid and Congress to work toward meaningful health reform."

There are parts of this legislation that could be helpful to businesses small and large:

  • The bill takes strides toward administrative simplification, streamlines enrollment to help enroll current Medicaid and SCHIP eligibles, increases care coordination and value-based purchasing in public programs, new wellness initiatives, and includes broad new flexibility for the continuing improvement of public programs through the independent Medicare Commission and the Centers for Medicare and Medicaid Services (CMS) Innovation Center, which will help control the programs' costs.
  • Health insurance exchanges give individuals and small businesses a streamlined market place where they can make apples-to-apples comparisons of health plans and choose what best meets their needs.
  • New rating rules that allow one person or small business to pay at most 7.5 times as much in premiums as someone else for the same health insurance plan. Current state laws are either extremely limited (incenting the young and healthy to forego coverage) or extremely loose (burdening the older and sicker). Unfortunately, the current bill does not allow adequate differentiation based on age.
  • The bill creates national plans that could be purchased regardless of where one works, lives, or receives medical care. Although these plans would be heavily regulated and lack pooling options, they would not be burdened with many of the onerous state mandates that make health insurance unaffordable.

Other provisions in this legislation could be costly to our nation's job creators and represent steps in the wrong direction:

  • A vast array of new taxes on medical devices ($40 billion), clinical labs, pharmaceuticals ($23 billion), and insurance policies ($67 billion) will be passed on directly to the purchasers of health insurance, according to the CBO, making the costs of health insurance even more unaffordable.
  • Employers who do not offer health insurance coverage or whose insurance is deemed "unaffordable" will be required to subsidize the costs incurred by employees who receive tax credits through exchanges. Individuals who receive credits should not represent burdens on employers; this could have the unintended consequence of encouraging businesses not to hire low-wage workers. The bill also orders a study aimed at increasing these fines by lowering the affordability threshold. Employers are also required to auto-enroll employees into health plans, which could create liability and cost problems.
  • A new tax on benefits ($201 billion) assessed on insurers and self-insured employers if the value of the plan (including major medical, tax-free accounts, vision, dental, and other supplementary health coverage) exceeds $8,000 for an individual or $21,000 for a family policy. This excise tax would be linked to the Consumer Price Index (CPI) + 1, even though the costs of health care rise much faster than CPI, meaning that over time it will massively expand just as the Alternative Minimum Tax does every year.
  • A new entitlement in the form of health insurance credits ($461 billion in the first ten years) for those making up to 400 percent of the federal poverty level will plague the federal budget.
  • The bill contains no meaningful medical liability (tort) reform provisions, just a meek "sense of the Senate" urging states to consider reforms.
  • A new state government-run health plan will take those who make between 134 and 200 percent of the poverty level out of the private sector, and put them on the government dole.
  • The true costs of the bill are hidden, as it assumes Medicare will cut payments to providers by more than 20 percent. This will not happen, and Congress will surely spend more than $200 billion in addition to the bill's price tag to prevent the provider cuts.

The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

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