Senators Fear Health Reform Could Endanger Employer-Sponsored Insurance

email to a friend

printer friendly

view / write opinions

rate article

Current Article Ratings:

Patient / Public:
Health Professional:
Article Opinions:	0 posts

Some Senators "struggled" Wednesday with the possibility that the health reform overhaul could derail America's tradition of employer insurance plans, The New York Times reports.

"Senator Max Baucus, Democrat of Montana, who is leading efforts to write health legislation, said 'much of the discussion' focused on this issue at meetings of senators on Wednesday."

"As part of an ambitious plan to overhaul the health care system, Democrats in both houses of Congress want to require people to carry insurance. They would offer subsidies to low- and moderate-income people who buy coverage through a new regulated market known as a health insurance exchange. Employers who do not provide coverage might have to pay penalties or contribute to a government fund."

"Higher penalties are more effective in preventing the erosion of employer-sponsored coverage, the bedrock of insurance for more than 150 million Americans, the Congressional Budget Office told lawmakers. Small businesses are less likely to provide health insurance than larger businesses. So any penalty for not providing insurance could affect them more than other employers."

"The United States Chamber of Commerce and the National Federation of Independent Business, which represents small employers, said the proposed requirement amounted to a new tax and would frustrate the creation of jobs" (Pear and Zeleny, 6/24).

The director of the Congressional Budget Office, Douglas Elmendorf, told Senators Wednesday that an employer mandate is needed to keep costs down, CongressDaily reports:

"'We just had the director of CBO on the phone talking about how you structure this -- even with an individual mandate, if there's not some requirement for employers, you'll see a drifting of people to the exchange and the government subsidies and that will increase the cost,' Senate Budget Chairman Kent Conrad, D-N.D., said. Conrad called a 'free rider' alternative to the employer mandate a 'live option.' The free rider alternative does not require employers to provide healthcare coverage for their employees but would force businesses to contribute the cost of tax credits for eligible workers in an exchange."

"The free rider option raises $300 billion, but that number is already worked into the latest $1.2 trillion CBO estimate on the Senate Finance Committee's proposal" (Edney, 6/25).

Senate Democrats have asked the CBO to score three employer mandate proposals, CQ Politics reports: "According to the document [distributed by the staff of the HELP committee], CBO has been asked to estimate the budget effects of two competing proposals that would require businesses to help pay for their workers' private insurance, plus a third that would require businesses with many employees on Medicaid to pay extra taxes to the government" (6/24).

As Senators discuss the mandate, the Senate Finance Committee works toward compromise, Roll Call reports: "Optimism about a bipartisan outcome appears high among key Democrats and Republicans who serve on Finance, even as the GOP Members of the HELP Committee complain that their markup has devolved into a partisan exercise. The process for approving health care reform in the Senate calls for merging the Finance and HELP bills into a single measure. Finance is set to begin its markup after the July Fourth recess" (Drucker, 6/24).

Taxes outside of health care are also being considered to help pay for reform, Dow Jones Newswires reports: "For example, a proposal from President Obama to limit the value of itemized deductions - like the mortgage interest or state and local tax deduction - for upper-income taxpayers is getting another look in the Senate, according to people with knowledge of discussions" (Vaughan and Yoest, 6/24).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.