Anthony Wright is executive director of Health Access California, the statewide health care consumer advocacy coalition. He blogs daily at the Health Access Weblog and is a regular contributor to the Treatment.
When Senate Majority Leader Reid held a press conference announcing the inclusion of a version of a public health insurance option in the merged Senate health reform bill, he didn’t mention the outcome of another major difference between the two Senate committee proposals--what would be responsibility of employers with regard to on-the-job coverage. And not a single reporter asked.
It’s strange that on-the-job coverage gets relatively little attention in the debate, even though more than half of Americans have health coverage through their employers. That's more than the Americans in programs like Medicaid and Medicare (around a third of the population) and much more than the Americans who buy coverage as individuals (less than a tenth of the population).
For all its flaws, employer-based coverage generally provides good benefits to workers and their families. It pools together shared contributions by employer and employees, leveraging group purchasing power for better premiums and/or a better level of benefits. Among other things, employers use their purchasing power to prevent any of their workers from being denied for pre-existing conditions. The workplace provides an easy place to sign up for coverage--and sometimes a useful ombudsman to deal with the insurer. It is also efficient way for insurers to get multiple customers at once, rather than incurring the expense of marketing and selling policies one at a time. That helps keep premiums down.
But despite its dominance, employer-sponsored insurance doesn’t extend to all workers. More than 80 percent of the uninsured are workers, or family members of workers. And without reform, on-the-job benefits are eroding. The percentage of Americans who get coverage through employers shrank by over 5 percent in the past decade. And in some states, like California, it’s about to go under the half-way mark--which is why the state has been exploring setting some minimum standard for health benefits. With the overall cost of health care rising, employers are scaling back coverage or in some cases dropping it altogether.
So let’s be clear. Without reform, the coverage that most of us enjoy is endangered--if not in our current job, then in our next one. And health reform cannot succeed if the foundation of employer-based coverage collapses.
President Obama's reforms address this problem. They would reinforce employer-sponsored insurance by requiring that employers either provide coverage to their workers or pay a fee, which would help offset the cost of covering those people without insurance. As Obama explained in his speech to Congress, "If some businesses don't provide workers health care, it forces the rest of us to pick up the tab when their workers get sick, and gives those businesses an unfair advantage over their competitors."
The bills that have come out of the House and the Senate HELP Committee are consistent with that principle. While exempting at least 86 percent of small businesses--and in fact offering significant subsidies to many small businesses to help cover the costs of coverage for their workers--both the House and the Senate HELP versions of health reform would ask larger employers to continue to contribute to the health coverage of their workers, or to start doing so. H.R.3200 has a sliding scale of payroll that ranges from 2 to 8 percent. Senate HELP asks for relatively little, a flat $750 per uncovered worker per year, when actual health coverage for a worker is multiple times that figure. Ken Jacobs at the UC-Berkeley Center for Labor Research and Education recently released a quick and useful analysis of how the different bills deal with the subject.
Unfortunately, reports suggest that the final Senate bill may look more like the measure that came out of the Finance Committee. And it lacks a real mechanism for employer responsibility. The only requirement on employers is a complicated and inequitable "free rider" provision to only charge employers when their workers get subsidies in the exchange. Because the approach does so little and has so many loopholes, it does little to actually help stabilize employer-based health coverage. It also doesn’t raise very much money: only about $25 billion over 10 years, as opposed to over $50 billion for even the paltry requirements in the Senate HELP version.
Even in praising aspects of the Baucus bill, National Journal columnist Ron Brownstein got it right to point out the Senate Finance proposal’s flaws: "Most glaringly, Baucus devotes too little money to help uninsured middle-class families buy the health insurance they would be required to obtain under the individual mandates included in all major bills. He also asks too little of larger employers who don't provide insurance for their workers." By requiring little or nothing from employers, the Finance bill shifts the direct burden to individual families and taxpayers (although, in fairness, most economists would argue that, eventually, employer contributions to health insurance come out of wages anwyay).
The Finance bill's weak employer requirement reflects its political lineage. Of all the bills, it's the most conservative--the one designed most deliberately to win over moderate Democrats and, just maybe, a Republican or two. And while conservatives keep insisting they are the ones who will let people keep their present insurance arrangements, they are also the ones opposing the reform that would make that possible--the employer requirement.
Conservatives defend their position by arguing that such a requirement would pose an unconscionable and unsustainable burden on business, eventually forcing them to cut back on jobs. But that ignores the fact that the vast majority of larger employers provide coverage anyway, to attract and retain workers. In fact, according to a recent study, the Healthy San Francisco reform--which sets a higher standard for employers than any of the plans under consideration--had no negative economic impact, even in industries like restaurants and retail that have been least likely to provide coverage.
In a recent Los Angeles Times article, a San Francisco restaurant owner made the case for such a requirement. She couldn’t have provided health coverage by herself, since it would put her at a competitive disadvantage. "If I had done it alone, it probably would have hurt us." But it works, she said, when everybody is expected to contribute. The same thing can happen nationally.