Employment-Based Health Insurance Supporters Should Get Out Of The Way Of Health Care Reform
By all accounts, and there are many, employers are committed to providing workplace health insurance for the foreseeable future. For them, offering coverage is purely an issue of competitiveness. The primary purpose of providing coverage is to attract and retain workers. Period. End of Story... Having a happy and healthy workforce was never a stated goal. However, it appears their selfishness is catching up with them and they know it. Even their traditional allies are questioning the benefits of continuing the health insurance access status quo.
Republicans Challenge Tax Status of Employment-based Health Insurance
Republicans in Congress and the Senate are rethinking the favorable tax treatment workplace health insurance plans currently enjoy. With the urging and free counsel of several conservative intellectuals, Republicans are adding language to their many Obamacare alternatives that would reduce, cap or eliminate these tax advantages. A proposal, Empowering Patients First Act, from U.S. Representative Tom Price would provide tax credits to everyone purchasing individual coverage and cap the tax benefit of employer-provided coverage. An earlier republican proposal, the Patient C.A.R.E. Act, also calls for “reform” of the tax treatment of employer sponsored health insurance coverage to pay for tax credits provided to individuals who purchase coverage. And the latest proposal from the Republican Study Committee, American Health Care Reform Act, would eliminate the tax-favored status of employer-based health plans. The plan would instead provide a tax deduction to individuals and families to pay for health insurance.
If it looks like Republicans are looking to shake up the world of employer-sponsored health insurance, it is because they are. But let’s not give them too much credit because Obamacare already has a provision to limit or cap the tax benefits of workplace health insurance—the Cadillac tax. Ironically, many republicans want to repeal this tax. Even Representative Tom Price has called for repeal of the Cadillac tax before he put forth his proposal to offer something similar. Go figure.
Groups Defend Health Insurance Access Status Quo
Still, don’t expect businesses and the lobbying groups to take this sitting down. Trade groups, professional associations, insurers, brokers, human resources and benefit professionals will more than likely resist any changes to the workplace health insurance status quo. They will boldly claim the current system works and it is what workers prefer. Oh, yeah, they already claimed that. They will also claim that they support efforts to increase access to affordable health insurance to the unlucky millions who do not have workplace health insurance, and they’ll leave it at that.
These groups that work so hard to maintain the current system of workplace health insurance with no changes, are the real barriers to health care reform. For them, a system where healthcare costs continues to rise and approaches true unaffordability is preferable to changing an employer based tax scheme with an individual one.
Yes, equalizing the tax treatment of employment-based and individually purchased health insurance takes way the long-held advantage some employers had when attracting talent. Now they have to compete for workers by other means. What does that have to do with health insurance? Don’t supporters of workplace health insurance realize that they contribute to the problem of out of control healthcare costs by holding on to this expensive model and standing in the way of reform?
Well, even if they don’t realize the harm their position brings, at least now they know that holding on will not be as easy as it used to be.