Time To Address Health Care Costs Is Now
As the national debate over health insurance reform moves forward, it’s important to focus on how the proposed changes would affect businesses in the United States.
Much of the focus has been, understandably, on how health insurance reform would affect individuals — workers, senior citizens and the uninsured.
But I hear all the time from employers about the exploding costs of providing health care to their employees. These employers want to do the right thing. They want to provide their workers with some peace of mind. But they are concerned that the costs will put them at a competitive disadvantage or even put them out of business altogether.
Proposed Solutions
The legislation currently under consideration in the House of Representatives attempts to address some of these issues. Providing insurance coverage for the uninsured will mean that the “penalty” that all employers pay in the form of higher premiums would be reduced.
Small businesses would be helped through exemptions for low-wage firms and a new small business tax credit that would help firms to provide coverage. Small businesses would have access to the new Health Insurance Exchange, giving them the benefits of large-group rates normally enjoyed by large employers.
Firms with annual payrolls that do not exceed $250,000 would be exempt from the requirement to provide health insurance to their workers. And workers at those exempt employers would still be eligible to get coverage through the exchange. The bill would reform rating rules so that small employers no longer pay higher premiums if they employ a sicker workforce, and includes measures to assure that the costs of plans for small businesses will be stabilized.
Insurance plans offered by larger employers would generally be unaffected, particularly for the first five years. After that, employers can no longer place annual or lifetime caps on coverage. Larger employers, however, would have to comply with the “Pay-or-Play” requirements (that is, they must offer insurance to their employees or pay a payroll tax of 8 percent). And over time, busi-nesses of all sizes would be able to participate in the Health Insur-ance Exchange.
Health ins-urance reform is essential for our economy. Cur-rently, health care expenses take up about 17 percent of our gross domestic product. In other words, of every dollar spent in the United States (on anything), 17 cents is spent on health care. That number is growing, and growing fast.
It is estimated that by 2080, around the time that my two kids are retired, health care will take up 50 percent — half — of our entire economy. That level of spending is simply unsustainable. If left unchecked, it will bankrupt us. If we want our economy to thrive in the 21st century, if we want to compete on an equal footing with other industrialized nations who spend far less than we do on health care, we simply must start to control the spiraling costs.
This is doable. It’s hard, but it’s doable. If we succeed, the American people, and American business, will be better off.
Rep. Jim McGovern represents the third district of Massachusetts and has offices in Worcester, Attleboro, Fall River and Marlborough.
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