Government, Courts, and the World of Work

Everyone supports health care reform as a goal.  The costs of health care are growing faster than inflation, wages and the overall economy.  The United States pays more than twice on health care than any other country but 150 million Americans remain uninsured, many of them working full or part-time jobs.

Current reform measures envision near universal coverage with private insurance companies selling coverage to employers and individuals in competition with a government-sponsored plan. Insurance is expanded to millions of uninsured at a cost of roughly $1 trillion over the next decade – mostly for subsidies to low and middle income people and expansion of the Medicaid program for the poor.

Employers, particularly small business, and their employees are greatly concerned about costs.  Nearly 177 million Americans are covered by an employer-sponsored plan.

Health care economists see promise in steps like improved management of chronic diseases, increased focus on preventive care and advances in health information technology, but the Congressional Budget Office believes that savings from these measures will not mitigate the costs of expanding health care.

Fundamental changes such as permitting the government to demand discounts from drug companies and reduce payments to inefficient hospitals have been side tracked by the given and take of negotiation. So employers with payrolls exceeding $400,000 would have to provide coverage or pay an 8% payroll tax.  Employers with payrolls between $250,000 and $400,000 a year would pay a smaller tax, and those less than $250,000 would be exempt.

But for small employers it could be cheaper to pay the 8% payroll tax rather than provide health insurance. The employers who continue to provide coverage will pick up the tab for those who don’t, until they too are driven out of the game.   

In short, the current reform proposals will ultimately shift the costs of health care onto the same workers who can’t afford it now, consumers who are struggling to pay down debt, and onto the already burdened taxpayer. Without controlling costs, health care reform will actually harm the people that it is designed to help.

Attend EANJ’s Webinar,Thursday August 20th What Employers Need to Know.

This entry was posted on Monday, August 17th, 2009 at 2:13 pm and is filed under Legislation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.