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December 18, 2009
Open Letter to Members of the United States Senate:
Employers for Quality Health Care (EQHC) is a coalition of 21 state chambers of commerce and other statewide business organizations representing tens of thousands of job providers across the country, from small employers to Fortune 500 companies. Our members are anxiously awaiting the outcome of the federal health care reform debate. For too many years we have faced annual increases in health care premium costs that far exceed the rate of inflation or the growth of our economy. We recognize the need for reform and are highly supportive of efforts to improve affordability and expand access.
Unfortunately, HR 3590 does little to address these issues. In fact, if passed, it would create more problems than it solves.
True reform requires mechanisms to control the growth of health care costs. We applaud HR 3590’s efforts to remove artificial barriers to competition in the private health insurance market, but we see no other concrete strategies for containing costs within the legislation. Moreover, the proposed expansion of Medicare, Medicaid and the Federal Employees Health Benefits Program to cover more Americans would raise costs even higher.
Instead, we ask that you follow the successful example set by many of the states represented in our coalition. Eliminate mandates that drive up costs by requiring insurers to provide certain types of coverage. Empower consumers through new technologies that give them timely, useful information about the cost and quality of their care. Modernize the civil justice system to reduce the rapid growth of medical liability awards and insurance costs (the Congressional Budget Office estimated this alone could save $54 billion). Removing these costs from the system can have an immediate impact on premiums and dramatically slow their growth in the future.
Unlike these suggestions, the primary provisions of HR 3590 would not only increase health care costs but could devastate the broader U.S. economy. Our members are the engine driving that economy, and as such are gravely concerned with financial stability and the ability to sustain and grow our workforce. The employer mandate included in HR 3590 would impose significant new costs on employers that would jeopardize both current jobs and the creation of new ones, ensuring our nation's unemployment rate remains high for years to come.
Employers are willing to do their part -- employees are our greatest asset, and employee health and the health of their families is of tremendous concern. Currently, employers provide 72% of all coverage, with many more employers willing to offer coverage if they could afford it. But the CBO estimates 1.5 million jobs would be lost if an employer mandate is adopted. EQHC strongly opposes this provision and asks that the mandate and other new taxes on health care be removed from the proposal.
Further, while EQHC encourages greater competition among health plans as a means to reduce and stabilize premium costs, adopting a government or “public” option that unfairly competes with private insurers would decimate the private market. HR 3590 allows the government plan to pay lower provider reimbursement rates, exempt itself from state mandate requirements, and avoid state-levied health insurer taxes. Each of these elements would undermine a private insurer’s ability to control costs and drive Americans from private plans onto the government plan.
Thank you once again for your commitment to this issue. We welcome the opportunity to work with you on effective solutions to America's health care challenges.”
October 27, 2009
Where does Congress go from here?
With all five pieces of health care reform out of their respective committees, congressional leaders have a series of choices to make as they reconcile the five bills and move them to their respective floors for vote.
Employers for Quality Health Care greatly appreciates the work of congressional leaders committed to health care reform. We are highly supportive of efforts to build upon what is working within our system and fixing what does not, and we applaud the work of the committees thus far to bring many important issues forward for evaluation and debate.
While the work of the Congressional committees has concluded, several issues must still be addressed to ensure the final proposals enact the type of reform that expands access to coverage and lowers health care costs without destroying the positive aspects of our system.
For example, none of the bills include strategies to address meaningful medical malpractice reform which is crucial to containing health care costs and bending the cost-curve downward in the future. More than $100 million in excess costs are attributed to medical malpractice issues each year. Reform at the national level in this one area could have a tremendous impact for all.
Also absent are strategies to reduce the number of health insurance mandates that contribute to the cost of care regardless of individual need or desire for the mandated benefit. As both individuals and employers contemplate coverage in the future, more flexible benefit designs will provide greater choice and affordability for all purchasers.
Insurance reforms that prohibit an insurer from denying coverage to those that have a pre-existing condition could be a positive step toward expanding access to coverage. However, as is evidenced through the extraordinary increases in health care premiums in Massachusetts, just expanding the pool to “spread the cost” through purchasing mandates, does not reduce the cost of coverage. Attempting to force people to purchase a product they cannot afford will result in individuals purchasing and paying for coverage only when they need it and thereby entering and exiting the system, at will, even with the threat of a penalty. This will raise costs for all responsibly purchasing coverage.
Rather than imposing purchasing mandates, Congress should focus on developing incentives to purchase coverage, beginning with allowing for the development of lower cost coverage health plans and plans tailored to meet individual needs and desires rather than expensive standardized packages.
Job-providers are diligently doing their part to provide coverage to their employees. We are the backbone for health care coverage in the nation, but costs are forcing decisions between new employees and health care coverage. Congress must carefully consider any requirement to penalize job providers who are unable to provide coverage during these very fragile economic times. We need affordable coverage, not more tax obligations.
As meetings continue behind closed doors, rumors abound about the on-again-off-again inclusion of a public option aimed at forcing competition into the marketplace to lower costs. Many claim that without government competition insurers will not lower costs and will arbitrarily deny coverage to high-cost individuals. Unfortunately the type of “competition” contemplated will destroy the private market leaving only the government option for coverage.
Much of the heavy-lifting has already been done. Taking reform into the home stretch will require Congressional leaders to think carefully about the best course from here. Employers for Quality Health Care encourages employers in our states to continue contacting Congressional leaders asking for meaningful reform that protects the private market and addresses lowering the cost curve to expand access to coverage.
September 9, 2009
Response to President Obama’s Health Care Reform Address to Congress: Talking Points
• Last night the President stated that in reforming our nation’s health care system, we must “build on what works and fix what doesn’t.” We agree with that statement.
• We also agree that offering “the status quo as a solution” is not acceptable. That is why we have suggested a menu of meaningful market-based reforms that build on what works and fix what does not work.
• Employers for Quality Health Care applaud the President for his remarks emphasizing the importance of providing more incentives for preventive care; however, we must not lose sight of the fact that reform will not be successful unless consumers are empowered to make informed, responsible health care decisions and providers are rewarded for quality over quantity.
• The President briefly mentioned the need for medical malpractice reform in order to end this tendency towards “quantity,” or defensive medicine. We believe this is a crucial element to a successful reform. Without any concerted efforts to address our nation’s medical malpractice laws, our ability to decrease our health care costs is severely hampered. Many states, like those we represent, have already pushed for medical malpractice reforms. These efforts, however, must be matched by more aggressive action at the federal level in order to truly modernize our civil justice system.
• The President claims that without more competition in the health insurance market, the price of insurance goes up and quality goes down. Absent from the President’s remarks, however, is any recognition that an increasing number of health insurance mandates continues to translate into higher health insurance costs for employers and employees. For that reason, Employers for Quality Health Care support eliminating costly mandates and removing artificial barriers that restrict competition.
• Employers for Quality Health Care strongly oppose the continued push to force employers to purchase health care coverage. An employer mandate does not reduce health care costs, but rather limits employers’ ability to offer innovative and flexible health benefit options.
• Employer-sponsored coverage is an example of what works in the system. Employers offer health benefits because it makes solid business sense. It is a crucial tool for attracting and retaining a high quality workforce. The increasing cost of health care has become increasingly problematic for employers of all sizes. Financially penalizing these employers through new payroll taxes and the elimination of other tax incentives, however, is a backwards approach to the problem and will only slow economic recovery and growth.
• Our organization also continues to oppose any new government-run health plan, or a public option. We have tremendous concerns regarding the government’s willingness to reimburse doctors and hospitals for the actual cost of the treatments they provide. The proposals before Congress only offer to cover a small percentage of these costs. The President’s remarks last night did not promise any change to that approach.
• President Obama remarked that those who have health insurance pay a “hidden tax” of about $1,000 per year for uninsured individuals who access care through the emergency room. Individuals and employers with private health insurance also pay a “hidden tax” for the government’s inability to adequately reimburse providers under Medicare and Medicaid that studies have shown can amount to as much as $90 billion a year.
• The cost-shift problem is real, both in the case of the uninsured and those insured under existing government health plans. This must not continue to be ignored by the President and Members of Congress.
• The President’s goal of moving the debate beyond the poisonous and partisan rhetoric in the health care reform debate that has emerged over the past couple of months is a respectable goal and one that should be heeded by both the President and Members of Congress over the next two months.
• The path to secure and stable reform is not achieved along a political divide and it is not achieved overnight. In each of our member states, we have seen what works and what does not work in the path to health care reform. As we stated in our letter to you on September 1, we continue to offer our organization as a resource as we all move forward in this effort.
September 1, 2009
Dear President Obama and members of Congress:
We agree: Now is the time for health care reform. Let's make sure we do it right.
We are Employers for Quality Health Care, a coalition of 20 statewide chambers and employer organizations representing thousands of employers across America, from family-owned businesses to Fortune 500s. Our members are the financial bedrock of the nation's health care system, voluntarily providing coverage for millions of workers and their families.
We continue to offer these benefits in the face of record cost increases because we know that access to care is vital to the health of our employees and our communities. We share your goal of reducing costs, improving quality and extending coverage to more Americans -- and we support meaningful reforms that advance those objectives while preserving private-sector coverage, including:
• Innovative solutions that expand access to affordable, private coverage, such as consumer-driven health savings accounts, small-business pooling, and equal tax benefits for individual and employer-provided insurance plans.
• Eliminating mandates that drive up costs by requiring insurers to provide certain types of coverage; and removing artificial barriers that restrict competition.
• Empowering consumers through new technologies that give them timely, useful information about the cost and quality of their care, helping them make informed decisions that encourage competition and reduce costs.
• Incentives that emphasize health care outputs over inputs, rewarding providers based on outcomes and overall care and consumers based on prevention and wellness.
• Reforming existing government health plans like Medicare and Medicaid to eliminate fraud and waste; and allowing enrollees the choice of using the money spent on them to instead enroll in private plans.
• Modernizing the civil justice system through state-level reforms that reduce the rapid growth of medical liability awards and insurance costs.
Improvements in access and affordability can and must be made without stifling the innovations that have made the U.S. health care system the finest in the world. That is why we oppose drastic changes under consideration in Congress that would duplicate the failed systems of other nations -- where care is rationed, yet costs continue to rise -- including:
• Employer and insurance mandates, which would eliminate employers' ability to offer flexible, cost-effective options such as ERISA plans and health savings accounts (HSAs). Instead, government regulators would determine what benefits must be provided and how much employers must pay for them. This would drive costs even higher and force employers with tight margins to either reduce their workforce, cut benefits or compensation, or drop coverage altogether -- subjecting them to an onerous payroll tax penalty of up to 8%.
• A costly new government-run health plan , the so-called public “option,” featuring subsidized premium rates that would further undermine private coverage. If approved, at least 83 million Americans (63% of those covered through their employer) would move from private to public insurance in a major step toward a single-payer system. As with Medicare, such a plan would also pay doctors and hospitals only a percentage of what treatments actually cost, leading them to shift costs to patients with private insurance and their employers.
• Taxes on employers and employees to cover the cost of the new government plan and an expansion of existing public plans, estimated at $1.2 trillion to $2.4 trillion. This includes eliminating or reducing the tax deduction for benefits provided by employers, a new tax on private plans that offer better benefits than the government plan, an expansion of the Medicare payroll tax, or an income tax hike on individuals and small businesses.
We ask you to remember that Americans who lack insurance are uninsured for a variety of reasons, and no one solution will effectively cover them all. For example, many can afford private coverage yet choose not to purchase it; others are eligible for public coverage yet choose not to enroll. Each group requires a different approach. Please also keep in mind the majority of Americans who already have insurance and do not want it replaced with a new government plan.
We speak from long experience, having witnessed first-hand the disastrous effects of employer mandates, expanded government coverage and higher taxes in many of our states -- including soaring costs and inferior care. Yet we have also seen lower costs and fewer uninsured residents in states that have enacted the positive reforms we outline above -- and we are confident these results can be replicated at the federal level.
We offer our organization and our members as a resource in this great undertaking, and we look forward to sharing our experiences with you in the weeks ahead.
Arkansas State Chamber of Commerce
Associated Industries of Arkansas, Inc.
Georgia Chamber of Commerce
Illinois Chamber of Commerce
Iowa Association of Business and Industry
Kansas Chamber of Commerce
Kentucky Chamber of Commerce
Massachusetts Chamber of Business and Industry
Michigan Chamber of Commerce
Missouri Chamber of Commerce and Industry
Montana Chamber of Commerce
New Jersey Chamber of Commerce
North Dakota Chamber of Commerce
Ohio Chamber of Commerce
State Chamber of Oklahoma
Associated Oregon Industries
Pennsylvania Chamber of Business and Industry
Texas Association of Business
Association of Washington Business
West Virginia Chamber of Commerce
Wisconsin Manufacturers and Commerce
What will health care reform mean to me?
Under the “Affordable Health Choices Act” proposed in Congress:
• If you're an employer , you'll have to provide health insurance for your workers or pay a hefty penalty. You'll also pay more in taxes for a new government-run health plan. Your costs will go up, and your margins will go down.
• If you're an individual , you'll be forced to buy insurance whether or not it includes the benefits you want. You'll be told what treatments you can get and may lose choice over the doctors you see. You'll enjoy fewer options and could receive inferior care.
• If you're an insurer , you'll be required to cover everyone at essentially the same rate. And you'll do it while competing with the government plan, which will be heavily subsidized (unlike you). You may go out of business.
• If you're a provider , you'll be expected to treat a lot of patients on the government plan. Yet you'll be paid a fraction of what it costs to treat them. You'll work longer for less money, and there will be fewer of you around.
Under the Employers for Quality Health Care approach:
• If you're an employer, you'll be able to continue offering quality health benefits that attract valuable workers, with more options than ever before. You won't be taxed to pay for inferior government coverage that will leave your workers less productive. And health care will become a smaller percentage of your cost of doing business.
• If you're an individual, you'll be able to get affordable private coverage with benefits that fit your needs. You'll see what treatments really cost and choose from multiple competing providers. And, you'll get a discount for healthy living.
• If you're an insurer, you'll face fewer burdensome regulations, and you'll be able to offer a broad range of plans and benefits that consumers are eager to buy. You'll improve your bottom line.
• If you're a provider, you'll be able to practice medicine without fear of frivolous lawsuits, and you'll be properly compensated for your services.
