Employer Mandate in Health Reform is Described
The Senate Health, Education, Labor & Pensions Committee (or, HELP) reported details of its proposed health care reform legislation this week. The details included specifics on the employer mandate included as a part of the plan. The Committee is continuing to debate the proposal in hearings today. The bill is called the Affordable Health Choices Act and weighs in at a hefty 615 pages.
The Committee Chairman and Ranking Member stated in a letter introducing the Bill for discussion by the Committee on July 2, 2009:
"Americans whose employer chooses not to provide adequate coverage will now have an opportunity to get the care they need through private insurance plans or the public option. But those employers should still share in the responsibility for ensuring that everyone is covered. So those employers (excluding small firms with fewer than 25 employees) that do not offer health insurance would be assessed a modest annual fee of $750 per full-time worker, or $375 per part-time workers, to help pay for their employees’ health insurance coverage."
Last week, Wal-Mart, the nation's largest retailer and largest employer, issued a letter supporting an employer mandate as part of health insurance reform. This support did not sit well with the National Retail Federation and its opposition is spelled out in its VP's blog.
Debate continues today. Public support for reform and an employer mandate is growing and Wal-Mart's support the week before the hearings leads me to the conclusion we have discussed before -- there will be an employer mandate in any health insurance reform legislation that emerges this year.
Comments
I believe that an Employer Mandate should be imposed. I am from Massachusetts where if you do not carry health insurance you are required to pay a fine on your income taxes. Businesses should not be exempt from paying for not insuring their employees.
I advise on several health insurance boards such as http://www.benefitsmanager.net and http://www.healthinsurancesource.net. I often quote the Switzerland health care system as an example of tough questions that we as a nation will have to answer someday, if we go down the path of nationalized government health care plan. We’ll have to at some point draw the line in the sand and refuse further care for patients receiving critical illness treatments, intensive care unit, trauma care, acute management services, disease management, neonatal intensive-care unit for newborns and seniors in extended care treatment nearing hospice stage . Did you know that premature babies are not resuscitated upon birth if they cannot draw breath in Switzerland? Did you also know that holds true with “senior care” experiencing system failure or multiple organ failures requiring support? Another example, they don’t extend the life of a senior via medical equipment such as intubation or respiration for multiple organ failures. Not to be morbid….they are unplugged and allowed to pass. Anyone in the business of paying claims knows that the single most expensive bill in what carriers call “shock loss” is within NICU for newborns and seniors in acute / intensive care / hospital in the last three months of life.
The Swiss apparently made decisions made based upon cost vs. quality outcome. Are we as a nation prepared to make that type of decision or to define when to incubate, resuscitate a newborn or a senior? Are we ready to define the conditions and rules of medical procedures with organ failure? With a litigious society I think not. This is why we need TORT REFORM. Without TORT REFORM medical provider costs will never drop. Liability costs with medical providers are nearly half of operating expenses. Humana health plans state that their costs of medical liability and defensive medicine accounts for nearly 10 cents out of every premium dollar collected. Compare that to Humana’s reported pharmaceutical claims of 15 cents out of every premium dollar collected. Or better yet, 21 cents out of every premium dollar collected is paid back to physicians for physician treatments. The cost of litigation is only obvious with Humana health plans. I sit on the board with several other health insurance carriers. Their books all show similar costs. They basically insure a shrinking populace that is mostly made up of people that only buy insurance because they need it. So is mandatory participation such a bad idea?
I don’t think we are hearing about TORT REFORM because most of the house and senate on the federal level are lawyers and have practicing law firm interest’s. In the healthcare system there is no total innocence. We hear about insurance executives with bonuses, doctors overbilling, hospitals overbilling because the street gang thug got dropped at their ER door with no insurance. The lawyers are there to stir the pot and promise lavish fortune at the end of the PERCEIVED misery chain. Am I saying we don’t need them? No, but I am saying there is clear and documented abuse of the legal system that awards outlandish claims in the millions for a questionable mistake. Are ambulance chasers not sociably recognized as being the most abusive? What about those that educate their clients on defraud and then use the legal system to pirate insurers?
I sure wouldn’t want to be on the receiving end of these serious decisions that we will have to make. My senator claims that the government would be held blameless but what about the medical provider that has to make the call? What about the insurance payer that has to deny continued care for an infant that will not survive? Without serious TORT REFORM we aren’t going to get costs down or have good people make headway.
You leave out what might be critical facts about the employer mandate:
1> Does it require and employer to cover dependents?
2> What if an employee is covered under a spouse’s or parents’ plan?
3> Will there be an incentive for employers to only hire persons who are already covered as a dependent (or to only hire the elderly, covered by Medicare).
Gary:
Great questions. I am waiting to see what comes out in the House and then explore some more of the details. Readers sometimes see details about either a House Res. or Senate Bill and assume the details are the final bill. I think your question number 3 is a very legitimate point – and, I don’t know the answer to it – but I will hunt around for some analysis.