Dx: Fear Rx: The Facts about Health Care Reform – Relief for Businesses

By Alta Price, M.D.

(cross posted at Quadsville.com in Dr Dx’s Blog)

Astronomical rises in health care costs are destroying our economy. How do the anti-reformers plan to help businesses deal with health insurance premiums increasing at many times the rate of inflation? One proposal from Republicans in Congress is to end employer-based insurance and require everyone to buy a private plan, with a government subsidy insufficient for the average worker to buy the family plan their employer had previously provided. True, that would help with business expenses, but millions of workers would be forced to give up insurance they generally like (except for the cost). Seems like a non-starter to me.

HR 3200 provides relief for businesses large and small. Every effort has been made to make sure there is no incentive for employers to stop providing insurance to their employees. Large businesses with large payrolls will pay a tax if they don’t provide health insurance.  And the small businesses that employ 80% of workers in this country will be able to purchase either a private plan or public plan from the Health Insurance Exchange, with subsidies for many small businesses with relatively low wages (under $40,000 average wage). Being able to offer insurance to their employees will increase the pool of applicants for small businesses, not to mention providing a healthier workforce.

A word on the public plan: if we pass a law mandating individuals buy insurance, penalizing large employers for not providing insurance, or subsidizing insurance premiums for small businesses and families making less than $80,000, we can’t just let insurance companies charge whatever they want. Through good old capitalistic competition, a public plan will force private insurance companies to keep premiums reasonable.

Dr Dx

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Here are some of the false claims about employer provisions in the House bill, HR 3200 (you can read the full text of the bill here). The Truth comes from Health Care for America Now, one of the lead coalition groups fighting for health care reform.

"Page 22: Mandates audits of all employers that self-insure!"

TRUTH: This is not an "audit," it's a study. Moreover, the bill states (pp.  22-23) that the report will "include any recommendations the Commissioner deems appropriate to ensure that the law does not provide incentives for small and mid-size employers to self-insure or create adverse selection in the risk pools of large group insurers and self-insured employers." This is almost directly the opposite of the email's claim.

"Page 145: An employer MUST auto-enroll employees into the government-run public plan. No alternatives."

TRUTH: This is simply not true. Employers with more than 20 employees aren't even eligible to participate in the exchange, let alone the public plan, until several years after the exchange launches in 2013. Moreover, no employer will be forced to participate in the public plan.

"Page 146: Employers MUST pay healthcare bills for part-time employees AND their families."

TRUTH: Employers are required to pay some benefits for part-time employees on a basis proportional to what they pay for full-time employees. No language on this page or the next stipulates coverage for the families of part-time employees.

"Page 149: Any employer with a payroll of $400K or more, who does not offer the public option, pays an 8% tax on payroll"

TRUTH: The payroll penalty applies to employers with payroll over $500,000 who do not provide insurance to their employees. The percentage for employers with payroll from $500,000 - $750,000 is 6%. Employers do not have to offer the public option to avoid this penalty, they can offer private insurance if they wish.

"Page 150: Any employer with a payroll of $250K-400K or more, who does not offer the public option, pays a 2 to 6% tax on payroll"