Employer Groups Push for Health Care Reform, Reject Mandatory Employer-Provided Insurance

Employer groups are pushing for health care reform to be part of the massive stimulus package being crafted by the incoming Barack Obama administration and Congress.

In addition to helping laid-off workers pay to continue receiving their employers’ group health insurance, the federal government should make health care reform a centerpiece of any comprehensive stimulus plan, said the American Benefits Council in a 44-point health reform proposal released Monday, January 12.

“Health care system reform is not an obstacle to economic recovery; it’s a fundamental component of it,” said James Klein, president of the American Benefits Council, which represents private-employer benefits plans.

The council stated that the $2.1 trillion health care system needed to be changed to improve the quality and cost of medical care by building on the employer-based health care system, which provides insurance to 150 million Americans.

“All Americans should have coverage, partly because it will reduce cost shifting for unfunded care and because it’s the right thing to do,” said Wilma Schopp, head of human resources for Monsanto Co. and chairwoman of the council’s Health Reform Task Force. “We want to build on the strengths of the employer-based system, not undermine it. It’s the best foundation we have for reform, and we need to make sure it remains solid.”

The council said it supported a law enacted in Massachusetts that requires individuals to purchase health insurance. The group said the best mechanism to ensure that individuals obtain coverage was to automatically enroll uninsured people into plans, offer subsidies to make coverage more affordable, and provide at least one plan per state that would guarantee coverage to people with pre-existing conditions.

The group flatly rejected, however, calls to require employers to provide coverage. In Massachusetts, employers with more than 10 employees that do not provide coverage are required to pay $295 per employee annually into a health care fund. The benefits council said its combination of reforms would make it easier for people to purchase insurance on their own, eliminating the requirement that employers do so on behalf of their employees.

“We are firm believers in the importance and value of employers providing coverage, but to take it one step further and require every other employer did not seem like the appropriate course to take,” Klein said. “When you look at comprehensive health reform, not just coverage alone, you do not need to say that an employer mandate is the way you are going to get there.”

The benefits council, which did not say how much it thought health care reform would cost the federal government, said current law allowing employers to provide health care tax-free has worked and should be extended to individuals. The federal government should use the stimulus package to redouble its efforts to create a nationwide health information network, employer groups said Monday.

The National Business Group on Health endorsed the incoming Obama administration’s plans to spend $50 billion over five years to expand health information technology, including digitizing all health records by 2014. That date was also set by the George W. Bush administration.

The group also supported spending part of the $775 billion proposed stimulus bill to help laid-off workers maintain their company health insurance.

Helen Darling, president of the National Business Group on Health, whose members include 63 of the Fortune 100 companies, said the legislation in the stimulus bill should provide funding for doctors in small practices to set up health IT that works across various computer systems.

Darling acknowledged that federal aid to help the jobless maintain their company health plan, known as COBRA, would add substantially to the stimulus price tag.

With all the emphasis on “shovel-ready” infrastructure and other capital projects, Darling urged Congress not to lose sight of the benefits of spending on medical research that could result in better treatment and lower costs.

“It could get lost in the shuffle,” she said. Health IT and research spending “increases the productivity of the economy.”

—Jeremy Smerd and Mark Schoeff Jr.

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