Study: Health Care Reform Mandate Will Punish Employers, Kill Jobs

A provision in President Obama's health care reform plan that requires businesses to offer health insurance to their workers or face a federal tax would cost employers at least $49 billion dollars a year, putting 5.2 million employees at risk of unemployment or underemployment, according to a new study.

"Health care reform is not going to be free," said economist Mark Wilson, who authored the study, which was commissioned by the conservative Heritage Foundation.

Under the provision, known as the play-or-pay mandate, another 10.2 million employees will face stunted wages and the loss of their benefits as employers try to find ways to fund the mandates.

"Those will be a difficult decision for them to make and they're also going to have to decide to the extent they can raise prices and pass the cost onto consumers," Wilson said.

But supporters of Obama's health reform plan say under the current system, thousands already are losing their health coverage or jobs because of the enormous costs employers are bearing.

"What we need to think about in health reform is how to make the system more efficient, how to make sure the system is protecting jobs, and that's exactly what health reform will do," said Peter Harbage, a health policy analyst with the liberal Center for American Progress.

White House spokesman Bill Burton said Thursday that without health reform the entire U.S. economy faces ruin.

"If we don't do something, not only is health care going to be in crisis, but the deficit will -- we just will not be on a fiscally sustainable path as it relates to the deficit," he said.

And as the financial realities of health reform are coming together there are questions about why tort reform isn't part of the package.

At a town hall hosted by Democratic Rep. Jim Moran this week, one person demanded to know why the threat of medical lawsuits couldn't be reduced.

"There's $200 million dollars in savings over 10 years if we had tort reform and nobody loses but the lawyers," the person said before shouting, "Why have we not even considered that?"

Former Democratic National Committee Chairman Howard Dean, a proponent of health reform, responded that tort reform would create more enemies for lawmakers as they try to pass a reform bill.

"Plain and simple truth," he said.

The president of the American Medical Association says without more protections for doctors in the courtroom they will continue to order tests that may be unnecessary and drive up health care costs simply to protect themselves.

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Canned Response from Cleaver II on Health Care Reform

Dear Susan:

Thank you for contacting me regarding health care reform. I appreciate hearing your concerns on this important and complex issue.

I assure you I have taken your concerns into consideration when forming my position in this debate. I regret that the debate on health care reform thus far has not produced a result to your liking. Unfortunately, this issue has been polarized and politicized so much that it is hardly recognizable. Misinformation abounds, and these misleading facts have been used to spread outright fabrications and scare people. I appreciate you taking the time to read this letter and giving me the opportunity to respond to your concerns.


1. This plan does not impose socialized medicine on the United States. Nowhere in the legislation does it call for a single-payer system. Some have argued that while the bill does not explicitly call for a single-payer system, that every single private insurance company will go out of business when forced to compete with a public option. This is false for several reasons. First, most businesses are going to keep the insurance plans they are already offering to their employees, and those plans are all provided by private insurance. Second, not everyone who must acquire their insurance individually is going to want to enroll in the public plan. While the public plan will have in common with other plans a certain set of benefits, the private options may offer more benefits or consumers may be attracted to their established reputations. Third, insurance companies routinely price their premiums much higher than necessary just because there is no competition in that area to keep them within reasonable boundaries. Thus, while the public plan may reduce their profit margins from their current rates, driving down these costs will not drive them out of business, but will simply keep them competitive. Introducing a public plan into the health insurance market is not socialism, in fact, it is the essence of capitalism. It is introducing consumer choice and competition to drive the market.


2. The proposed bill will not cover illegal immigrants. It explicitly states this at several points in the bill. One example occurs on page 143 of the proposed bill, in Section 246, entitled "No Federal Payment for Undocumented Aliens", the bill specifically states that "Nothing in this subtitle shall allow Federal payments for affordability credits on behalf of individuals who are not lawfully present in the United States." Thus, individuals who are in this country illegally are not covered by this proposed bill. Furthermore, those who do not file taxes in the United States are not eligible to enroll in the proposed public health insurance option.


3. A public health insurance option will increase, not decrease choice for all Americans. As I stated above, a public option will serve to bring down health care costs, and give everyone in every community more choices of health insurance providers and more information for making that choice.


4. Medicare benefits will not be cut. It is true that Congress is trying to find savings in the Medicare system, and a big avenue for paying for this reform will be through Medicare savings, but these savings are not from benefits. The bill simply lays out many ways in which we can increase oversight to decrease fraud and waste. It would implement higher penalties for noncompliance and ensure that seniors are not being put through more procedures than necessary, just so that physicians can collect the reimbursements. Certainly, not all physicians engage in wasteful practices, but some do, and there are a lot of savings that can be found simply by eliminating these practices.


5. The proposed bill does not include any support for death panels or euthanizing senior citizens. If you look at the provision in question, you will see that it is amending a previous bill: the Social Security Act. Specifically, it is amending section 1861, which is a list of definitions for terms and phrases in the bill. Thus, it is simply broadening the definition of what qualifies as "medical and other health services". This way, advance care planning can be covered under Medicare. The government is not making any choices for you, it is simply ensuring that you have all the information you need to make the right decisions for you.


6. We do not have the best health care in the world. We spend twice as much money as other developed nations, but see far worse outcomes in most areas than they do. Furthermore, millions of US citizens do not have health insurance. This is unacceptable, and that is why my colleagues in Congress and I are working so hard to reform our system now.


7. The proposed bill does not fund any abortion services that are not already able to be federally funded (e.g. for pregnancies that result from rape or incest).


The proposed bill certainly needs some polishing. There are details to be ironed out, and provisions that need clarification, but in general the proposed bill would institute many positive changes for our health care system and for our nation as a whole. This is one of the most important pieces of legislation in decades, and I assure you I will keep all of your comments in mind as I consider this bill.


Again, thank you for sharing your views with me. Please do not hesitate to contact me in the future if I may be of further assistance. Also, I encourage you to visit my website at http://www.house.gov/cleaver, where you can sign up for my electronic newsletter and receive updates on my latest activities as your Representative.

Sincerely

Emanuel Cleaver, II

Member of Congress