The Senate Health, Education, Labor, and Pensions Committee, chaired by Senator Kennedy and currently presided over when he is absent by Senator Dodd, released its full package late last week.
Yesterday, I had a piece at The New Republic’s The Treatment about the employer requirement. Here’s a partial clip:
As part of a plan financed through “shared responsibility” including individuals, government, and savings from providers, what’s a fair share for employers? The experience of myself and others with multiple health reform efforts in California suggests that the HELP bill’s assessment of $750 per uninsured worker per year is too low.
In comparison, an average employer-based plan for an average worker costs over $4,000 per year, and over $12,000 for a family. In 2003-4, the California legislature, and nearly half its voters, supported a requirement on larger employers to pay 80 percent of premium. You don’t have to support that threshold to think that $750 is low, either to secure or to expand on-the-job benefits.
Health policy experts, like Paul Fronstin at the Employee Benefit Research Institute, and others that I have consulted, seem surprised at the low bar of the HELP Committee bill. The employer assessment is crucial–of similar import to the establishment of the minimum wage a century ago–but the amount is like setting the minimum wage at $2/hour. The proposal to pay 60 percent of premium for a worker, or pay $750–which is around 36 cents an hour, or only 4 percent of payroll a worker making $19,000 a year, and much less for those with higher wages.
California Governor Arnold Schwarzenegger started his health reform in 2007 push with an employer requirement 4 percent of overall payroll. At the announcement, I had agreement from a panelist sitting next to me–Steve Burd, the CEO of Safeway, that the 4 percent was too low. Regardless of the Chamber of Commerce’s threats to “launch nukes” over any requirement on employers, the business community is hardly unified over this position. After all, many of them already provide such benefits. Many others want to, and would make the investment if it could be provided as a set percentage of their payroll, rather than the very high costs that would be entailed now.
Governor Schwarzenegger, a Republican with a near-perfect Chamber of Commerce record, eventually agreed to a sliding scale up to 6.5 percent of payroll. And he brought some of the business community with him in support. An employer requirement at an appropriate level certainly wasn’t his first choice for financing his health reform, but he saw that health reform doesn’t work without it…
As the Senate looks to put together the financing for their bill and paying for the crucially important subsidies that will be needed to ensure affordability and coverage for all Americans, it should look toward the House proposal, which has a minimum employer requirement of 8 percent of payroll.
Ezra Klein makes a broader point, that you can’t do health reform without an employer requirement–despite what Senator Grassley says.