Business Cool Toward McCain’s Health Coverage Plan
By Kevin Sack
The New York Times
October 6, 2008
American business, typically a reliable Republican cheerleader, is decidedly lukewarm about Senator John McCain’s proposal to overhaul the health care system by revamping the tax treatment of health benefits, officials with leading trade groups say.
The officials, with organizations like the U.S. Chamber of Commerce, the Business Roundtable and the National Federation of Independent Business, predicted in recent interviews that the McCain plan, which eliminates the exclusion of health benefits from income taxes, would accelerate the erosion of employer-sponsored health insurance and do little to reduce the number of uninsured from 45 million.
Officials with eight business trade groups contacted by The New York Times predicted the McCain plan would raise costs and force some employers to stop providing health benefits.
A recent survey of 187 corporate executives by the American Benefits Council and Miller & Chevalier, a consulting firm, found that three-fourths felt the repeal of the tax exclusion would have a “strong negative impact” on their workers. Only 4 percent said they would provide additional pay to fill any gaps.
http://www.nytimes.com/2008/10/07/us/politics/07health.html?pagewanted=all
Where does American business really stand on health care reform?
Employers remain very concerned about rising health care costs. Because of our failure to reform our health care financing system, employers have been responding by shifting more responsibility to their employees. There has been an increase in the use of high-deductible health plans, which slow the rate of premium increases for the employer, but makes health care less affordable for the employees by requiring greater out-of-pocket payments when health care is accessed. Many employers now have decided not to offer health plans; the rate of coverage through employer-sponsored plans has continued to decline, especially amongst small businesses.
The McCain proposal is designed to relieve employers of the responsibility of providing employer-sponsored plans, both by eliminating the tax benefit for the employees and by offering individuals tax credits for purchasing plans in the individual market. It is not only the Obama camp that recognizes the erosion of health coverage that this would cause, the business community recognizes it as well. Most American businessmen are concerned about the welfare of their employees. They really don’t want a solution that would have a “strong negative impact” on their employees.
So would business be more supportive of the Obama proposal? The most important component of his proposal is to offer a market of quality plans similar to those used by federal employees. But isn’t that what they have now? Isn’t that precisely why the business community is seeking relief? Even Barack Obama understands that these plans are too expensive, and many would still have to go without coverage.
The American business leadership certainly understands the single payer model. One of the most important principles for a successful business is to reduce waste, and that is precisely what the single payer model does, by design. Adopting a single payer system would allow us to cover everyone, and would allow us to finance it equitably through a single universal risk pool.
When we desperately need sound business principles to drive health care financing, it really seems silly to digress into a not-very-intellectual debate over free markets and the government, as if they were two distinct entities between which a choice had to be made. Nebulous debates lead to nebulous results (and is probably the reason why conservatives keep drawing us into that debate).
Some leaders in the business community must be ready to support sound business principles in revamping our highly flawed health care financing system. An intellectual debate over ideology might make for an interesting pastime, but first we have to get our dollars in order. Every businessman understands that.