The House and Senate have rolled out two parallel plans to overhaul the country’s health system. But the promise of universal coverage stirs up tense questions about the role of employers and insurers as gatekeepers to care.
While both plans would offer a “public option” and an employer mandate, the House proposal mandates that employers either sponsor insurance or kick in up to 8 percent of their payroll to cover other insurance for workers (with discounts and exemptions for smaller businesses).
The Senate Health, Education, Labor, and Pensions Committee proposal would generally impose on companies a $750 penalty per full-time worker (potentially a cheaper mandate, according to the Wall Street Journal‘s estimates).
Both plans would build on a system of employer-sponsored insurance that has steadily eroded in the face of soaring medical costs. And neither plan spells out whether employers will hold up their end of the bargain or just keep shunting low-income people into the ranks of the underinsured.
In an interview with Kaiser Health News, James P. Gelfand, senior manager of health policy for the U.S. Chamber of Commerce, didn’t even try to disguise his disdain for the idea of mandatory coverage:
You [have to] pare this down to the simplest form — what does this employer mandate do? It makes people who don’t make a lot of money worth less to their employers. Say to yourself, I want to hire someone. I want them to do a simple task. It’s probably worth about $7 an hour. And then you realize, oh wait, because of a new law, I’m going to have to provide gold-plated health insurance. So instead of $7 an hour, it’s going to be more like $20 an hour. Let me tell you something, that person is not getting a job. So we’re just trying to make Congress understand this is a bad, bad policy. It’s gonna hurt the people they want to help.
Yet the Chamber’s most powerful member, Wal-Mart, has partnered with the Center for American Progress and SEIU to voice support for “shared responsibility,” including an employer mandate.
The cryptic political machinations that could be motivating the mega-retailer should generate at least as much skepticism as hope.
The danger of relying on a dysfunctional employer-based insurance structure may be one reason the AFL-CIO emphasizes the House proposal’s key feature: a tax on the rich. According to the union’s blog:
instead of taxing working families’ healthcare benefits, as some senators proposed, the House bill lands on the side of fairness. It calls for a small surtax on the nation’s wealthiest 1 percent to help provide health care for all Americans.
From a worker’s perspective, the concept of redistributive justice definitely sweetens the deal. But without tight cost controls to ensure affordability and access, critics fear that reform would continue to make people pay more for less care.
Elise Gould, director of health policy research with the Economic Policy Institute, recently testified at a House hearing:
Cost-containment is a crucial part of reform because high and rising health costs either crush workers’ wages or raise prices for those firms that provide health insurance. Reducing overall costs and sharing the burden of providing coverage across industries would particularly help firms that disproportionately cover their workers already and benefit those firms that are exposed to international competition (manufacturing, most prominently) to remain competitive while also paying decent wages to all workers.
Single-payer advocates cite the shortcomings of Massachusetts’s universal health plan to illustrate how unsustainable costs — fueled by a bloated, profiteering insurance industry — could clash fatally with obligatory coverage.
Some warn that eligibility restrictions in the public insurance program could shut out lower-income workers from affordable coverage.
And healthcare analyst E.J. Eskow speculates that employers would duck behind the small-business fee exemptions by trying to “re-incorporate as mutiple businesses with common ownership in order to avoid this penalty.”
Dr. Don McCanne of Physicians for a National Health Program, a strong advocate for single-payer, says that even a sensible tax wouldn’t heal a sick system.
Under this [House] legislation, no subsidies are provided for individuals or families over 400 percent of the federal poverty level. For a family of four, that threshold is an income of $88,200. Thus average costs would be 19 percent of family income, and more for those with greater needs. By no stretch could that be considered affordable.
It’s great that the concept of income transfer has been accepted by the policymakers in Congress, but they need to go back to the drawing board to craft a plan that would actually work. (Hint: Provide all necessary services for everyone, and pay for those services through a single universal risk pool that is funded equitably using progressive tax policies.)
Nonetheless, the most influential labor groups continue to ignore or tip-toe around single-payer, despite wide support among members. Maybe they’ve calculated that their only hope for reform is a watered-down, Wal-Mart-endorsed compromise bill, since a more principled plan would be dead on arrival in Congress.
There’s still the possibility that individual states could develop pilot single-payer plans. But so far Senate Democrats seem unwilling to foster even small-scale experimentation with single payer.
Of course, all this risk aversion is absurdly rational. After lawmakers have spent so much political capital to fashion a designer Band-Aid, testing a superior alternative treatment would only expose the underlying malaise.
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Michelle Chen is a contributing writer at In These Times and The Nation, a contributing editor at Dissent and a co-producer of the “Belabored” podcast. She studies history at the CUNY Graduate Center. She tweets at @meeshellchen.
