At the heart of the House health care bill that passed Sunday is not cost control but subsidized coverage, says Renee Baker, Louisiana state director for the National Federation of Independent Business. And what could have satisfied more stakeholders would have been addressing runaway premium increases rather than creating insurance mandates, says Butch Passman, president and CEO of the Louisiana Business Group on Health.
Baker says her group, which represents about 5,500 state businesses averaging five to eight employees, is mostly upset with two major provisions in the bill that will add costs to smaller companies, on top of various new taxes. The two sticking points are a paperwork requirement that means companies must report any purchase over $600 to the IRS; and a mandate that requires construction firms with five or more employees, or $250,000 in payroll, to provide coverage, even though the bill provides a health insurance exemption to firms with fewer than 50 employees. Baker says the mandate came out of labor unions’ support for health care reform on the condition that the plan require smaller, non-union contractors to shoulder the extra overhead of health insurance.
Passman says his group, which represents about 185 employers averaging 200 or more workers, fears that insurance companies facing a “double-barrel shotgun” in 2014 to take all comers regardless of preexisting conditions or previous investment in the health insurance system will pass costs onto consumers. “You’ve got to have an effective way of making sure everybody pays,” Passman says. “The penalties that drive the individual mandate are really too anemic to actually drive a lot of people toward enrollment.” Passman says a recent summit of LBGH members revealed a consensus on focusing health insurance reform on the consumer, who “does more to drive costs and can fix the problem more than anything else” if he is empowered and educated about costs, and not on government mandates that kick in at arbitrary employer sizes. Although he says a provision to enable the U.S. Health and Human Services Department to restrict how much insurers can raise rates annually was nixed from the bill that passed, the HHS will be able to ban “restrictive annual limits on coverage” to ensure “access to needed care,” according to an official Democratic statement.
“They’ve got to pay for it somehow,” Baker says of the sweeping plan to insure 30 million more Americans. “Our members have said for 20 or 30 years that their problem is cost, access to affordable health care. There is the Medicare cost savings through fraud, waste and abuse—we don’t understand why you can’t do that now. We’re probably a little skeptical of those real cost savings” in the bill, pegged at $940 billion but set to reduce the deficit $138 billion over 10 years. “This bill is not going to cut costs,” she says. “It’s really about coverage.” In 2014, however, small businesses will be able to buy health insurance through cooperative exchanges intended to lower costs for employee coverage.
