Obama made his comments during a town hall meeting that aired the night of Wednesday, June 24, on ABC.
“One of the things that we’ve said is that if you are eligible for your employer plan, then you can’t just go into the public plan,” he said. “You can’t decide that you’re already having a pretty good deal in insurance and you’re just going to dump that—what’s called a firewall.”
Doctors and hospitals already make up for money-losing reimbursement rates from government paid health programs by charging employers more for medical care. Enlarging the government’s scope would further drive up costs for employers.
Second, employers fear that healthy employees would be able to find cheaper premiums on the public plan, leaving employers to insure those with higher medical costs. Prohibiting employees from leaving job-based health coverage is a key component to strengthening the employment-based health system, employer lobbyists said, but should be articulated in the proposed legislation.
“Thanks, Mr. President,” said James Gelfand, senior manager for health policy at the U.S. Chamber of Commerce. “Now make it real, not just rhetoric.”
Also opposed by employers is current legislation in the House that allows employees to opt out of employer coverage. The legislation would also require businesses to give employees the money they would have spent on their coverage.
Obama’s comments did not address this detail.
“We don’t want people opting out of the employer plan willy-nilly,” said Neil Trautwein, vice president for employee benefits policy at the National Retail Federation.
Obama reiterated his support for a requirement that employers provide health coverage or pay a fine, a policy widely opposed by employers. He said this would help cover the cost of insuring more people.
“If you’re not providing health insurance to your employees and you’re a large employer, you’re going to have to kick in a certain amount of money because it’s not fair for taxpayers to have to cover your employees,” he said.
Paying for health care reform remains a hot-button issue. The president has said any reform should not increase the deficit.
Senate Finance Committee Chairman Max Baucus, D-Montana, said Thursday, June 25, that his health reform proposals have been estimated by the Congressional Budget Office to cost under $1 trillion and cover 97 percent of Americans.
Employers are bracing for legislation that would tax employee health benefits, which has been cited as the greatest source of health care-related funding.
The Joint Committee on Taxation, a nonpartisan federal group, has said the tax exclusion on employer benefits excludes $226 billion annually from taxes. A proposal to tax health benefits that cost more than those provided to federal employees would raise more than $418 billion, making it the largest revenue source for health care reform.
The government’s health benefits cost around $4,200 for individuals and $13,000 for families.
“If you are trying to come up with a trillion dollars that’s the target; that’s the biggest pot of money,” said Susan Relland, a lobbyist with Miller & Chevalier.