General Motors, Ford, Chrysler, Westinghouse, Xerox, Sara Lee, Caterpillar, United Airlines.
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The titans of American industry are doing their best to influence Congress now that debate over health-care reform heads to the floor of the House and Senate.
Trouble is, big business can’t seem to get its message across. The leaders of one political party, in particular, have turned a deaf ear.
Got to be those infernal Democrats, right?
Well, no. Not this time.
This time it’s Senate Minority Leader Robert Dole and the Republicans-ordinarily the party of business-who are telling a big chunk of the Fortune 500 to get lost.
At issue is whether employers should be required to pay a portion of the cost of employees’ health insurance.
It’s the dreaded “employer mandate,” the biggest bone of contention in the debate about to unfold on Capitol Hill.
The Clinton administration wants all Americans to have insurance, which is to say “universal coverage.” To get there, President Clinton proposes that employers be required to pick up 80 percent and workers 20 percent of the cost, with the government providing a partial subsidy to small, low-wage companies that can’t afford it.
The proposed insurance mandate has divided America’s business community as few issues have.
Companies that provide insurance, especially the big industrial outfits with unionized work forces, figure they have little to lose and much to gain if all companies are made to shoulder the load.
These companies have been hit hard by the soaring cost of health care, up twice the rate of inflation through much of the 1970s and ’80s. They’ve been able to slow the increase by pioneering some of the “managed care” techniques contemplated by Clinton and others. Benefits managers are shopping among, and driving hard bargains with, insurance companies and HMOs, which are, in turn, putting the squeeze on hospitals and doctors.
One recent survey found that group health premiums have remained essentially flat since the beginning of 1994 after rising only 3.5 percent in 1993.
That’s progress. But the insurance-buying companies know their troubles won’t be over as long as they have to pay, indirectly, for much of the health care received by the uninsured.
This is “cost-shifting,” the wedge that has driven corporate America into opposing camps.
Shifting occurs when hospitals and doctors pad the bills of patients who have insurance to make up for patients who don’t. Some of the shift is caused by government programs-notably Medicare and Medicaid-whose reimbursement levels are less than what services actually cost. But much of it is caused by care provided to the working uninsured, many of whom get treated in the most expensive place-the emergency room.
In many ways it comes down to this: Those who buy insurance subsidize those who don’t.
That’s why GM, Caterpillar and the rest have formed something called the National Leadership Council for Health Care Reform. The council has a proposal similar to-though less bureaucratic than-the Clinton plan. It would require employers to offer insurance or pay a 7 percent payroll tax into a government-run insurance fund-the so-called “play or pay” concept.
There is, of course, another side to all this.
Corporations that employ large numbers of low-wage, low-skill employees, especially in the fast-food and discount-store sectors, want no part of employer mandates. And there are thousands of small businesses whose owners say they’d be out of business if they had to buy health insurance.
No question a mandate would break the backs of some small firms and cause others to shave payrolls to cut exposure.
And McDonald’s Corp. executives recently told a congressional committee that employment and profits would be affected, though some Democratic senators quickly pointed out that Big Mac does provide insurance in Germany and Japan, where it’s the law.
My take on this is that every employer should pay something, whether it’s Clinton’s 80/20, or 50/50, or some form of “play or pay.” It’s simply not fair to force companies or individuals who pay for insurance to subsidize those who do not.
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Reasonable people can disagree, but everyone should understand that when Bob Dole says he has the votes to kill employer mandates, not all employers are sighing with relief.
Just the ones we’ve been subsidizing all these years.