House Subcommittee Focuses on Employer Costs in Health Reform Hearing

During a House Education and Labor Subcommittee on Health, Employment, Labor and Pensions on Tuesday, witnesses and lawmakers discussed how to address the issue of employers providing their workers health insurance and also paying in part for uncompensated care, CQ HealthBeat reports. Subcommittee Chair Robert Andrews (D-N.J.) asked witnesses to estimate how much such employers contribute to uncompensated care, but witnesses were unable to give such a figure, according to CQ HealthBeat.

Emory University health policy Professor Kenneth Thorpe said that uncompensated care costs in 2008 totaled $57.4 billion, which is covered by the federal government and private payers. James Winkler of Hewitt Associates said, "We believe it is reasonably conservative to assume that the additional cost incurred by private plans to offset provider costs for uncompensated care is about 2% to 3% of an employer's health care costs."

Neil Trautwein, vice president for the National Retail Federation, said that employers' share of uncompensated care costs could be reduced by mandating that individuals have health insurance and offering subsidies to those who cannot afford coverage on their own. Thorpe also said employers' current costs could be lessened by an individual mandate.

In his opening statement, Andrews said that an "all-employer participation component is an essential element to health care reform," adding that it would "increase the number of insured Americans by 83%," reduce overall costs of the system, prevent further losses of employees' health benefits and "protect [workers'] right to choose their own doctor and maintain their existing level of benefits."

Andrews said the subcommittee and full committee would be involved in writing and debating health reform legislation, focusing on lowering costs for employers and employees (Reichard, CQ HealthBeat, 3/10).

NFIB, AHIP Urge Consideration of Small Business in Reform Legislation
In related news, representatives of America's Health Insurance Plans and the National Federation of Independent Business on Tuesday in a joint press conference urged lawmakers to consider small businesses when crafting health reform legislation, specifically by including affordable health insurance options, CQ HealthBeat reports.

NFIB President and CEO Dan Danner said that while small-business employees account for more than half of all private sector workers, just half of the small firms provide health benefits because of cost. He said, "Generally, small businesses pay more for less when it comes to health care."

AHIP's board of directors on Monday approved a "Statement on Addressing the Needs of Small Businesses," which proposes the creation of "essential benefits plans" to provide affordable and comprehensive health coverage for small businesses nationwide. According to AHIP, the plans would not be expected to comply with state coverage mandates. The board recommended establishing tax code incentives that provide encouragement for small-business owners to offer the plans and for employees to enroll in them (Attias, CQ HealthBeat, 3/10).

The AHIP Board of Directors' statement is available online (.pdf).