Will Small Business Have To "Pay Or Play"?

Some Say Requiring Companies To Provide Health Care Could Do More Harm Than Good

(CBS)  This story was written by CBSNews.com political reporter Stephanie Condon.

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In his strongest appeal yet for comprehensive health care reform, President Obama on Monday spoke of the burden rising costs have placed on small businesses.

Over one third of small businesses have reduced benefits in recent years, and one third have dropped their workers' coverage altogether since the early '90s, the president said.

Still, Mr. Obama said, "every American bears responsibility for owning health insurance, so long as we provide a hardship waiver for those who still can’t afford it. The same is true for employers."

Most Americans with health insurance obtain it through their employers, and as Washington attempts to expand health care availability to all Americans, one looming unanswered question is how government reforms will impact small businesses. One particular proposal -- a mandate for employers to either provide "meaningful" coverage for their workers or contribute to a public fund to cover the uninsured -- could have a significant impact on the costs businesses must bear and the way people acquire insurance.

Some argue the mandate - also referred to as "pay or play" - could also help reduce costs the government will take on to ensure universal access to health care. Others argue it is simply politics masquerading as economics.

The employer mandate is part of Democrats' plan to establish "shared responsibility" for health care -- in other words, to distribute the cost of health care among government, individuals and business in order to make the cost less burdensome for everyone involved.

"The idea is everybody pays in a little bit more to make it work better for everybody else," explained Peter Harbage, a senior fellow at the Center for American Progress, a liberal think tank.

Harbage added, though, that employers are putting in a lot of money into the system today already. "That's who the system really needs to be fixed for," he said.

Len Nichols, the director of health policy at the nonpartisan New America Foundation, said an employer mandate would be a rather ineffective and generally unwise way to create "shared responsibility."

"Shared responsibility is really about people," he said. "Real people own small firms, and we should tax them. But to make it hard for them to pay workers doesn't seem like smart way to extract their responsibility."

Many in the business community contend the proposal would make it harder for employers to maintain a payroll with decent wages as well as the required benefits. Moreover, said James Gelfand, senior manager of health policy for the U.S. Chamber of Commerce, the free market offers the best mechanism for sustaining employer-based insurance.

"Market forces say if you want the best employees, you offer the best insurance you can," he said.

A Look At The Numbers

It is clear, however, that employee benefits are not as secure as they once were. Nichols said the employer mandate in large part simply represents a resistance to this fact.

"The world is changing," he said. "It's harder and harder to maintain that level of benefits in a global economy. Part of the impulse behind pay or play is to try to lock down historical benefit levels because they can't be sustained in the marketplace."

"This is a classic case of weighing economics against politics," Nichols added.

A 2008 National Small Business Association survey showed a only 38 percent of small businesses were able to afford insurance for their employees last year - down from 67 percent in 1995. Since 1989, small businesses have created 93.5 percent of all net new jobs, according to the association.

While the Senate bill may rely on employers to take on more of the burden of keeping people insured, it is likely Congress would give significant breaks to small businesses. Businesses with fewer workers and lower wages would be exempt from the mandate and offered a new tax credit to purchase health insurance for their employees, according to a description of policy options written by the Senate Finance Committee, one of the two Senate groups responsible for health care legislation.

Given that a significant number of the firms that do not currently offer health care may end up exempt from the program or eligible for tax credits, "the amount of potential revenue here is not that great," Nichols said.

Not all businesses are against the employer mandate. A report from the Small Business Majority, a national nonprofit advocacy organization founded by executives of small companies, suggests that benefits would thrive under an employer mandate - so long as other reforms were implemented as well.

The group's study considered three scenarios with a sliding scale of tax credits to be provided to employers who offer insurance and a sliding scale of payments from employers who do not. The report concluded that depending on the variables, health care reform could save up to 128,000 jobs that would have been lost because of high health care costs. It also estimated small businesses could save as much as $855 billion under the changes it considered.

Opposing reports make it clear that the success or failure of an employer mandate will depend on both how the mandate would be set up and how the rest of the reform package is structured.

A recent study by the National Federation of Independent Business Research Foundation concludes that an employer mandate could eliminate 1.6 million jobs over the course of five years and reduce GDP by around $200 billion. The study assumed the mandate would require all employers (including small businesses) to offer private health insurance, and that employers would have to finance at least 50 percent of their employees' health insurance premiums.

Economics Vs. Politics

Gelfand said it is "simple economics" that the mandate would result in lost jobs and decreased U.S. productivity.

"It'll be a stimulus for India, and Brazil and Mexico," he said. "Administrative costs are such that it's not even worth it for many employers."

Ultimately, the employer mandate may not make it in the final legislation.

Chuck Grassley (R-Iowa), the ranking Republican on the Senate Finance Committee, has said he will not support a bill that includes pay or play. Meanwhile, Democrats will be negotiating to preserve more important provisions like insurance market reforms, commitments to subsidies and changing the incentive structure for doctors and hospitals. No proposal will cost Democrats more political capital than their fight to create a government-sponsored health plan.

In the meantime, businesses will be watching the debate closely.

"There are businesses out there who want to see change, who know they can't live under the current system, and they see health reform in a very positive way," Harbage said.

Gelfand concurred reform is needed - but with more skepticism about how that change will be delivered.

"We are hurting," he said. "If Congress can't manage to find a bill we can support, then something is very wrong on Capitol Hill.

[sjc_1]

Optional National Health Insurance will provide better coverage for lower prices to businesses and individuals. Do NOT make health insurance mandatory for anyone, that is the WRONG way to go.

[arcopeland]

the person writing this is a doctor. I think that the president is correct. we need change. the US is 39th in healthcare not number 1 in healthcare around the world. to pay for the change,I propose a national sales tax of 3-10 % of the US GDP. then put all doctors in the United States Public health sercvice (USPHS) right after graduation from med school. if they do this for 20 years, then med school costs are handled by government. if they put in 20 years then they also could get college tuition for their children,. liability issues are handled by US Federal tort claims act. there would be universal access to USPHS hospitals for all US citizens and green card holders for lifei.e. cradle to grave. private hospitals and private insurance can co -exist. if a person wants to buy that , they can do so,but it is not required.. for most people the USPHS is the bottom line or safety net for those who can not afford anything else. for business this should help improve their bottom line. it is one less thing to buy and takes it out of disputes with unions. for doctors it means that for the bulk of their professional life, school debts are paid and liablity issues are handled . they can after 20 years do private work on the side if they wish. going to medical school never meant becoming Donald Trump or Warren Buffet. this system handles care for all citizens and is affordable by a national sales tax. private HMO or hosptials, insurances can coexist. by analogy this USPHS care would be like a Sears or a JC Penneys store and for most people that is adequate. if they want a Neiman Marcus or a Lord and Taylors store ( e.g. private hospital or an HMO) then they can buy that if they wish. however the bottom line is a basic health care would be accessible for all over a lifetime.business would not have to pay for it, it is paid by a national sales tax and their bottom line is improved by it. this is what happens in most other countries. they should then be more competitive with foreign companies. at least consider this idea. is anyone listening?

[rednomo]

FierceHealthcare reports the following top 10 CEO salaries for 2008.

* Ron Williams - Aetna - Total Compensation: $24,300,112.
* H. Edward Hanway - CIGNA - Total Compensation: $12,236,740.
* Angela Braly - WellPoint - Total Compensation: $9,844,212.
* Dale Wolf - Coventry Health Care - Total Compensation: $9,047,469.
* Michael Neidorff - Centene - Total Compensation: $8,774,483.
* James Carlson - AMERIGROUP - Total Compensation: $5,292,546.
* Michael McCallister - Humana - Total Compensation: $4,764,309.
* Jay Gellert - Health Net - Total Compensation: $4,425,355.
* Richard Barasch - Universal American - Total Compensation: $3,503,702.
* Stephen Hemsley - UnitedHealth Group - Total Compensation: $3,241,042.

When American patients trust their health to a for-profit insurance company, they?re doing nothing less than gambling with their lives in a game where the odds are stacked in favor of the insurance company.

These are salaries reminiscent of the AIGs, the Goldman Sachs, the Merrill Lynch?s, and other Wall Street CEOs who also pillaged from the American taxpayer and turned around and gave themselves and their executives multi-million dollars bonuses.

The Single payer, health care option initially proposed by President Obama on his campaign trail is merely health coverage, like Medicare, but it is for anyone who wants it. Single payer eliminates insurance companies as pricey middlemen. The government pays care providers directly. It?s a system that polls consistently have shown the American people favoring by as much as two-to-one. Of course, it is this option that these CEOs and Congress are fighting against because it means less profit for health care companies who favor their bottom line over quality, more affordable health care coverage.

The existing health care option proposed by Congress, the GOP and Sen. John McCain falls short, (and they know it) because:

* Many Americans, especially American families, cannot afford the insurance premiums offered by employers. As cost of housing, fuel, education, food, insurance continues to rise; salaries across the board have been stagnant or declined.

* Health insurance continues to increase, and rise without question and Americans who lose a job, or self-employed, work part-time, retire or divorce are cut off by employer health care coverage, if they even had it.

* No American can actually afford COBRA insurance, the premiums are cost prohibitive and employers know it.

* The Republican, GOP plan to force Americans to buy health coverage and giving them a small tax break means these same families who cannot afford to buy health insurance now, certainly cannot afford to buy the more expensive insurance under their plan.

[rednomo]

76% of Americans want a public plan, why?

Insurers Tell Congress: Hell Yes! If You're Sick, We're Pulling Your Insurance Coverage

By Susie Madrak Wednesday Jun 17, 2009

This is what happens when you don't allow real competition into the picture. It's also what happens when you have a for-profit healthcare system:

Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive.

The hearing on the controversial action known as rescission, which has left thousands of Americans burdened with costly medical bills despite paying insurance premiums, began a day after President Obama outlined his proposals for revamping the nation's healthcare system.

An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period.

It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.

[woeisme1]

by TheMasses0003 June 17, 2009 1:41 PM PDT
"The idea is everybody pays in a little bit more to make it work better for everybody else,"
----------------------------
Forget it!
I'm not paying for that bum, TheMasses0003's healthcare because he doesn't want to work.
&*%$ numbskulls!

[TheMasses0003]

"The idea is everybody pays in a little bit more to make it work better for everybody else,"
----------------------------
Forget it!
I'm not paying for some bum's healthcare because he doesn't want to work.
&*%$ numbskulls!

[IThoughtItWasFunnyAgin]

Obama yammers constantly about people not having health insurance...

The problem is the high cost of health care and he's not doing anything about that.

All he wants to do is throw out a cheap government policy that puts insurance companies out of business.

He either doesn't understand or he doesn't care that if that happens there's a few million MORE people out of work AND without insurance plans.

AND he keeps fooling you with the figure 46 million don't have health plans when 12 million of those people are illegal aliens which he uses to stack his statistics and lie to you.

What needs to happen is that hospitals should not be run on profit, they need to be run at cost.

What needs to happen is sliding scale medical costs according to the ability to pay and a mandate that EVERYBODY has to pay accordingly.

The only medical care that the government needs to be picking up the tab for is those that are incapacitated either physically or mentally, and every able bodied person in the US pays SOMETHING for their medical care.

They should design insurance coverage on sliding scale basis as well and return this country's free market to FAIR profit margin. Nobody objects to somebody working hard and making a fair profit and accruing wealth they worked to get. But price gouging, especially for health care should not be allowed to be subject to greed.

And otherwise the federal government should butt out of it and let the people solve this problem. They don't need to be offering ANY kind of medical care plan. They're corrupt and they've robbed every medical and social plan promulgated TO DATE!

Stay out of my medical care, period!

[rednomo]

Here's a rundown of all the money that the people in Congress who are blocking real reform in health care have received from the health care industry.

Arlen Specter (R-D- PA- $4,026,933)
Max Baucus (DLC- MT- $2,833,731)
*Mitch McConnell (R-KY- $2,758,468)

And when you just go right to Big Insurance, the non-presidential candidates who got the biggest legalized bribes were the 7 senators who have been tasked with the job of killing single-payer:

Ben Nelson (DLC-NE- $1,196,799)
Max Baucus (DLC- MT- $1,184,113)
Joe Lieberman (DLC- CT- $1,036,302)
Arlen Specter (R-D- PA- $1,035,530)
Chuck Schumer (D-NY- $981,400)
*Mitch McConnell (R-KY- $929,207)
Chuck Grassley (R-IA- $884,724)

Number of Americans without health insurance:

2000 = 42.6 million

2009 = 82 million

The Impact of Rising Health Care Costs

* A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study found that 50 percent of all bankruptcy filings were partly the result of medical expenses. Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

* A new survey shows that more than 25 percent said that housing problems resulted from medical debt, including the inability to make rent or mortgage payments and the development of bad credit ratings.

* About 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs.

* A survey of consumers found that in order to cope with rising health insurance costs, 86 percent said they had cut back on how much they could save, and 44 percent said that they have cut back on food and heating expenses.

* Retiring elderly couples will need $250,000 in savings just to pay for the most basic medical coverage. Many experts believe that this figure is conservative and that $300,000 may be a more realistic number.

* According to a recent report, the United States has $480 billion in excess spending each year in comparison to Western European nations that have universal health insurance coverage. The costs are mainly associated with excess administrative costs and poorer quality of care.

* The United States spends six times more per capita on the administration of the health care system than its peer Western European nations.

Source: The National Coalition on Health Care

www.nchc.org/facts/cost.shtml


For all those that parrot the far right, insurance companies and big pharm talking point that we don't need universal health care...

As Bill Maher so gracefully put it, 'With the system we have now the doctors are not making the calls, the patients cannot make the calls because the insurance companies make all the calls. It's called 'hospital gown coverage' whatever condition you currently have, chances are your @ss ain't covered.'

[billpl-2009]

the system is broken

fix the system first, BEFORE you make everyone have to pay for it.

....that simple

[ABM_21]

You know, some people have tried to compare Obama's plan with 'socialism' or 'copmmunism', and other mundane, pathetic arguments. Nothing could be further fromt he truth. What of the 43 million Americans that are without health insurance? Would you like to know what they do? When they have a medical situation, no matter how slight, they often times go to the emergencey rooms across this nation. These health care providers cannot turn away a person in need, regardless of his or her ability to pay. This keeps these health care professionals from dealing with real emergencies, not t6o mention the fact that many of them cannot pay. This drives up costs at the hospitals. These costs are passed on to the consumers who do have health care insurance. Across this nation, many emergency room doctors have to take ont he roll of primary care physicians because many people simply cannot afford health insurance. Something has to be done.If someone cannot afford something, they usually don't get it...or resort to stealing it. Unless you want to see doctors getting kidnapped and forced to work in less than sterile conditions on patients that may not even require emergency medical attention, something has to be done. What are the other options? I challenge any conservative come up with a viable alternative---emphasis on the word 'viable'.

[mjvwsr]

go to the health page and read about the VA's current problem; spreading aids. that's the future of gov health care

[incog-nito]

Universal health care will make businesses, especially small businesses, MORE competive, not less. It will make it easier for people to change careers or start a new business. It will make small businesses easier to grow without health care costs hampering them.

I know a number of people including married couples who want to strike out on their own and become self-employed or start a business, but health insurance is always an obstacle to overcome. Typically one spouse has to stay employed in order to keep the insurance. If a person is single, that makes it harder because individual plans are very expensive. I know people who have been laid off and get by by selling stuff they make as hobbies. They would like to continue doing so, but are forced to look for jobs that offer health insurance because they don't make enough to buy it themselves.

In short, the current employer-based system hampers competitiveness for businesses and mobility for individuals. It needs to be done away with as soon as possible.