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  • Towards a Different Kind of Workplace Coverage

    New data out from the Centers for Disease Control and Prevention show that some 44.9 million Americans of all ages were uninsured in the quarter of January through March. Roughly 63.5 percent of unemployed adults aged 18 to 64 and 21.5 percent of employed adults in the same age group had been uninsured at some point in the past year. The new report highlights a trend in Census data that private coverage is declining while coverage in public health programs is on the rise.

    The numbers also underscore what Stuart Butler has called a “catastrophe of small-business health care coverage in America.” Since the majority of Americans get their health coverage through their workplace, increasing costs have pressured more companies to reduce or drop benefits, with most small businesses opting to not cover employees because of the skyrocketing costs. The result — as shown in the Kaiser Family Foundation’s recently released annual survey on employer-sponsored benefits — is a relentless drop in small business coverage. Moreover, employer-sponsored health insurance rose to an average annual rate of $13,375 for family coverage this year.

    However, Butler and other health policy experts argue Congress is going about the wrong way in trying to promote greater health insurance coverage. Measures like employer mandates to provide health care coverage to workers or pay a fine, requirements that all Americans buy insurance or pay a tax, expansions of nearly bankrupt public health programs and greater regulation of health insurance threaten to push premiums even higher and lop more taxes on American families. All of the provisions would exacerbate the decline of private employer coverage.

    In particular, the higher taxes that Sen. Max Baucus (D-MT) proposed in the framework of the Senate Finance Committee’s health bill (a full bill has not been released) would make the uninsured problem worse for low-income workers, Butler told a health care forum sponsored by the Alliance for Health Care Reform.

    The Congressional Budget Office noted this week that taxes levied on drug companies, medical device manufacturers, health insurers and clinical laboratories as proposed by Baucus’ chairman mark would be passed onto consumers through higher insurance rates.

    “This will further squeeze workers’ cash earnings,” Butler said. Instead of pushing through highly contentious health bills, Congress needs to hit the reset button and focus on reform that garners broad support, Butler said. He noted that tax experts across the ideological spectrum have called for changing the tax treatment of health care coverage to make it more equitable for consumers who buy it on their own in the individual insurance market.

    “Plus, let’s build up momentum in a different direction when it comes to businesses providing health care benefits. Let’s make it more like retirement savings, where employees often do their paperwork through their employer but own their 401(k) or pension,” Butler said, stressing that a basic reform of the tax treatment of health insurance is necessary to make that happen.

    Posted in Obamacare [slideshow_deploy]

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