NSBA’s Health Care Reform Scorecard

June 24, 2009

The momentum for health care reform hit a barrier last week with the release of the Congressional Budget’s Office’s (CBO) cost analysis; however, a recent proposal introduced by the Chairmen of the House Committee on Ways and Means, House Committee on Energy and Commerce, and the House Committee on Education and Labor (Tri-Committee) has provided a recent spark to the debate.

With Independence Day recess coming at the end of the week, each House committee with jurisdiction is exploring and debating the Tri-Committee proposal. House leaders have indicated they plan for hearings to proceed this week and for each committee to mark-up the bill the week after recess. NSBA has generally urged the committee in comments to take a more pragmatic approach. A bill that has taken a year to write deserves longer than a week to ascertain its impact on small business.

The House Tri-Committee proposal, and any other for that matter, can best be evaluated by using NSBA’s proposal, Small Business Health Care Reform—A Long-Term Solution for All, as a basis. However, to simplify the process of comparison between NSBA’s proposal and any other, four criteria can be examined: cost-containment; shared responsibility; insurance market reforms and health insurance exchanges; and, the public health insurance option. This health care reform scorecard allows for greater assessment as to whether what is being offered in Congress meets the principles set forth in NSBA’s proposal, which would provide for quality, affordable health care for all Americans.

Cost Containment
There has largely been unanimity on the inclusion of cost-containment provisions in all health care packages put forth. The Tri-Committee proposal offers several provisions to reign in health care cost, but perhaps the most glaring set back on cost-containment in the Tri-Committee proposal is that several of the provisions are not enacted until future years; thus, there is not an immediate reduction in health costs that can be realized by small businesses today. NSBA strongly supports cost reduction and containment as the central goal to any health care reform. Furthermore, small businesses need relief today from health care costs; thus, any approach must pursue an expedited path to reduce health care costs.

Shared Responsibility
The concept of ‘shared responsibility’ has been popular among House and Senate Democrats in recent health care reform deliberations. The notion suggests that there is a significant involvement or shared responsibility, primarily financially, between individuals, employers and the government. The Tri-Committee proposal provides a roll for all three, including an individual mandate, government subsidies for low-income individuals; and, a pay-or-play mandate on employers. If individuals do not have credible insurance, they will be assessed a tax. If employers do not offer credible coverage to their employees and their families, then they would have to pay an amount equal to eight percent of employee wages into a health insurance exchange. The proposal suggests certain small employers will be given exemptions while those with less than 25 low-wage employees will be eligible for tax credits. NSBA strongly supports a focus on individual responsibility to have health insurance, along with a role for government to support those low-income individuals that need assistance. However, NSBA is opposed to pay-or-play mandates on employers as a means to finance health care reform.

Market Reforms and Exchanges
Appropriate health insurance market reforms are critical to successful health care reform. All proposals to date have included the needed reforms to ensure guarantee issue, elimination of the use of pre-existing conditions, and limited rating variations. In addition, the Tri-Committee proposal establishes a National Health Insurance Exchange initially for individuals and employees of the smallest businesses. NSBA has advocated for an exchange that would service the entire small-group market, and which would not have exclusivity over the private market with respect to the ability of individuals to use government subsidies to purchase health insurance at their place of choice.

Public Plan
NSBA has expressed skepticism at the notion of introducing a public health insurance option into the private health insurance market, something that the Tri-Committee proposal includes. NSBA has urged the committee to consider variations of a public health insurance option that would allow for the private market to produce the competition and honesty sought by the bill’s sponsors.

Outlook
With the continued mark-up of the Senate HELP Committee’s bill, which lacks important provisions they expect to introduce later, and the introduction of the House Tri-Committee proposal, the Senate Finance Committee is the only committee that has yet to introduce legislation. Last week’s CBO scores caused Chairman Max Baucus (D-MT) to delay the introduction of his committee’s bill until after the Independence Day recess. Continue to watch the NSBA Web site for more details and calls-to-action as appropriate.