Health reform draws fire
As Congress last week continued to wrangle over provisions of health care reform legislation pushed by President Obama, business and physician advocates in Westchester County opposed key elements of Democratic proposals as too costly to employers and governments and potentially crippling financially for hospitals and physicians already struggling with low reimbursement rates.
The Business Council of Westchester, in concert with the U.S. Chamber of Commerce, called on members to urge their representatives in Congress to oppose a public health insurance plan, “pay-or-play” employer coverage and a minimum benefit package for employees that would be required of employers.
A version of America”™s Affordable Health Choices Act approved by the House Ways and Means Committee and a Senate version passed by the Health, Education, Labor and Pensions Committee would create a public health insurance option competing with private insurers in an open health insurance marketplace. Its proponents said it will be self-sustaining, financed only by its premiums.
The Congressional Budget Office estimated the House plan will cost approximately $1.04 trillion over the next 10 years and add $239 billion to the federal budget deficit over the same period.
The Business Council said the government-run plan would be “an unfair competitor, with the government acting as both the team owner and the referee.” Citing research by The Lewis Group, a national health care consulting firm, business opponents of the public plan said its lower premiums ”“ estimated by The Lewin Group at 20 percent to 25 percent less than comparable private coverage under the House bill ”“ would prompt an estimated 130 million Americans to shift from private to public insurance. That would be “a disaster” and a short step from a single-payer system, the Business Council and other business groups nationwide warned.
The House bill would require employers with payrolls more than $250,000 to provide health insurance coverage for their workers that meets minimum government standards for benefits and contributions or contribute funds in the form of a penalty payment on workers”™ behalf. The penalty would be phased in at 2 percent of a company”™s annual payroll for those more than $250,000 and top out at 8 percent for businesses with annual payrolls higher than $400,000.
The Business Council said employer mandates such as the proposed pay-or-play plan “by their nature limit flexibility and innovation, the cornerstones of American health care.”
The National Federation of Independent Business (NFIB), an advocacy group for small businesses, also opposes the pay-or-play health coverage provision. Susan Eckerly, NFIB senior vice president for public policy, told Congress the employer mandate could cost 1.6 million jobs, with 1 million of those lost in the small business sector.
Paul Vitale, Business Council vice president for government and community relations, last week said the pay-or-play plan “really puts a squeeze” on employers, who likely will lower workers”™ salaries to offset increased health benefit costs. “Employers will really have to look at their payroll and they will be more reluctant to hire people,” he said.
Vitale said an income surtax included in the House bill to help pay for health care reform ”“ proposed to apply to individuals with adjusted gross incomes of more than $280,000 and couples with incomes over $350,000- “is going to impact many small businesses.” NFIB officials agreed, pointing out that 75 percent of small businesses are structured as pass-through entities and pay their taxes at the individual level. More than one-third of small businesses employing 20 to 250 employees would face the tax; they employ 33.5 million workers, more than one-fourth of the American workforce, the NFIB said.
For critics of the health care proposals, “First and foremost, it”™s a cost issue and a job issue,” Vitale said. “The price tag is rising as we speak.”
In light of the Federal Reserve”™s forecast of no job growth nationally for another five years, “Economic development and job creation should be the most primary concerns of government,” he said. “This plan will really be a detriment” to achieving those.
Vitale also said the county does not have enough physicians to treat the surge of newly insured patients if, as the Congressional Budget Office has estimated for the House plan, the number of uninsured citizens and illegal immigrants is reduced from 51 million in 2010 to 17 million in 2019. “The only way around it is to ration health care,” he said.
Dr. Thomas Lee, a neurosurgeon who heads the Westchester County Medical Society”™s legislative committee, said he and other physicians practicing in an urban area with a large undocumented immigrant population and many uninsured patients, worry that the proposed public health care plan could flood the Medicaid system and “make the physicians and the hospitals here basically insolvent,” unable to operate at arbitrarily low government-imposed reimbursement rates.
“Many physicians will have to stop taking Medicaid patients and many hospitals will have to go bankrupt,” he said. Those hospitals are some of Westchester”™s largest employers and the health care sector is “the last bastion or stronghold in this downturn,” he said.
Lee said a federal revenue plan to support mandated health care reforms has not been clearly defined. Among medical society members, “We do not believe an unfunded mandate is something this state or this county can afford.”
“I think it”™s going to make a bad problem worse,” he said of the public insurance plan.
Lee also said Congress has failed to address “in any way, shape or form” critical cost containment issues for the health care industry. The cost savings pledged to Obama by pharmaceutical companies ”“ $80 billion over 10 years ”“ “is a drop in the bucket” compared with a $1 trillion to $1.5 trillion health care plan price tag for government.
“I do not believe it is a sustainable new system that has been described, at least in the House bill,” the neurosurgeon said. “The Senate will come out with drastically different bills.”