NEWS RELEASE

November 6, 2009
PR-09/37
For additional information:
Jason Hammersla
202-289-6700

Council letter to House: health care reform bill fails to control costs, weakens employer-sponsored coverage

“We believe the bill does not accomplish the bipartisan goal of controlling health care costs and will significantly add to the burdens and costs for employers who are the primary source of health coverage for more than 160 million Americans. As a result, we believe that the bill is likely to destabilize employer-sponsored health coverage which has driven much of the innovation and progress toward quality improvement in our health care system today,” the letter reads. “The legislation does not provide the needed solutions for controlling health care costs and, in fact, includes numerous provisions that would make it more difficult and costly for employers to continue to sponsor health benefits for their employees.” The key areas of concern include:

• Employer responsibilities: employers recognize that health care reform will also involve new shared responsibilities, but a “pay or play” employer mandate will impose myriad new requirements on plan sponsors and ultimately, if unintentionally, will lead many companies to “pay” rather than “play”.

• Retiree health: two provisions of the House bill are likely to have the unintended effect of discouraging employer-sponsored retiree health coverage, thereby placing the cost and burden of providing this vital coverage onto the federal government. Section 110 of the bill would significantly and indefinitely restrict the ability of employers to adjust their retiree health benefits programs, while Section 534 of the bill eliminates the current tax exclusion for the subsidy employers receive from the federal government when they provide post-65 retirees with prescription drug coverage.

• The public health plan: despite provisions that have been included in the House bill that would require the public plan to negotiate payment rates with health care providers, there is little evidence or confidence that such a policy would be sustained. Furthermore, it is neither practical nor advisable for government to both regulate and then compete directly with the private marketplace.

• Employee wellness programs: Employers have made tremendous strides in helping employees and their families engage in programs and activities promoting good health. Unfortunately, the bill lacks provisions to help employers encourage participation in wellness programs while upholding privacy and non-discrimination law.

• Liability reform: no version of health care reform, including the House bill, has yet met the test of achieving the kind of real reform that is urgently needed in our medical liability system. Not only does the House bill fail to seriously tackle liability reform, it includes a provision that will actually expand liability for coverage obtained in an insurance exchange, which will ultimately increase costs to private coverage.

“The president has repeatedly called for reform legislation that will reduce health care costs for individuals, employers, the government and the American economy. Employers have universally embraced that goal and agree that it is essential to make health care more affordable, especially if we are to make it more accessible,” the letter says.

The full letter is available on the Council Web site. For more information, or to arrange an interview with Council staff, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.