RSS icon

Top Stories

Michigan Sen. Stabenow Opposes Employer Mandate in Federal Health Reform Package

November 17, 2009
Recommend (0) Comments (0)
Related Topics: Medical Benefits Law, Benefit Design and Communication, Latest News
Reprints

U.S. Sen. Debbie Stabenow, D-Michigan, said Monday, November 16, at a Detroit Economic Club breakfast meeting that she opposes an employer mandate that could be a key component in a final health care reform bill.

Instead of an employer mandate that the U.S. House recently approved as part of its package, Stabenow told an audience of about 200 at the Southfield Westin that the Senate bill would require companies with 50 or more employees to pay a “fee” to help subsidize their workers’ mandated health insurance coverage.

The “fee” could range from $400 to $750 per employee who would be eligible for federal tax subsidies to help pay for their health insurance coverage.

“Our goal is to make health insurance affordable for small businesses,” Stabenow said. “Tax credits would be used to offset 50 percent of their costs.”

The House bill, approved November 7, mandates that companies with more than 25 employees provide employee health insurance. The Senate is expected to begin debate on its bill this week.

Under both the House and Senate bills, individuals would be required to purchase health insurance. Medicaid would be expanded for certain low-income people, and tax credits and subsidies would be given to help others pay for health insurance premium costs.

“We want to make sure the tax credits are enough [for businesses and individuals],” said Stabenow, a member of the Senate Finance Committee. “Costs are capped at 12 percent of gross income [for individuals]. I want to lower that to 10 percent.”

She said businesses and individuals are already paying for a “hidden tax” that is slowly reducing real wages and making companies less competitive in the global marketplace.

“If we do nothing, over the next 10 years business will see health insurance rates double and it will cost us 3.5 million jobs [nationally],” said Stabenow, noting that health insurance a decade from now would cost businesses $28,000 for a family of four.

Health insurance premiums in Michigan have risen 78 percent over the past eight years while wages have grown just 5 percent, she said.

Responding to a question about why the Senate is taking so long to vote on a bill, Stabenow said politics and policy differences have come into play.

“I think some people don’t want the president to succeed,” she said. “We need all of you to hold our feet to the fire [and stick to the policy issues].”

Stabenow cited one recently approved bill—the Worker, Homeownership and Business Act—that could have been voted on in one day, but took more than a month to get through the Senate because of Republican parliamentary delay tactics.

Besides extending the $8,000 first-time homebuyer tax credits through April 30, the bill expands the business-friendly “net operating loss carry-back provision,” which was initially approved earlier this year in the American Recovery and Reinvestment Act.

The provision allows any business with a loss in either 2008 or 2009 to claim refunds of taxes paid within the prior five years.

“The biggest problem for businesses is access to capital,” Stabenow said. “This will put $32 billion back into the economy and allow businesses to reinvest.”

The Senate also proposes a 40 percent excise tax on so-called Cadillac health insurance plans that are valued at more than $8,000 for individuals and $21,000 for families of four. The proposed tax on the plans would raise $202 billion, which is more than half the new funds needed to help pay for extending insurance coverage to about 30 million of the 47 million uninsured.

While the tax is aimed at health insurers, Stabenow said she is concerned the tax could hit middle-class, especially union workers who have negotiated rich benefit plans.

“We want to make sure these taxes on insurance companies will not be passed on to consumers in higher premiums,” she said.

One of the keys to driving down costs is the creation of a health insurance exchange that would allow private insurers to create four levels of insurance products, including a basic benefit plan, and compete for business in the individual or small-business market.

“This will not be available to people with employer-based health insurance,” Stabenow said. “About 17 percent to 18 percent of people will have access to the exchange.”

Stabenow also supports creation of a nonprofit public health insurance option to compete against private plans. A decision on including the public option in the Senate bill is expected to be made this week.

“This will have a tremendous impact on improving quality and lowering costs,” Stabenow said.

Stabenow was also asked why the federal government thinks it can create an affordable and sustainable public insurance option when Medicare is projected to become insolvent in 2017.

“The public option is not a single-payer, Medicare-type system,” she said. “It will be designed to be self-sufficient through a combination of government subsidies and [contributions from those insured].”

Stabenow said health reform legislation is also intended to lower Medicare costs by reducing overpayments, enhancing fraud and abuse controls and reimbursing providers based on quality instead of quantity.


Filed by Jay Greene of Crain’s Detroit Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Comments

Hr Jobs

Loading
View All Job Listings