> But what do you make of the argument that Stern is angling not for
> national health insurance, but some national version of the dreadful
> Massachusetts plan?
Daily Labor Report June 19, 2006
Stern Says Employer-Based Coverage Dead; Others Call for System of Individual Coverage
Contending that the employer-based health care insurance system is "dead," Andrew Stern, president of the Service Employees International Union, June 16 called for creation of a new "uniquely" American health care system.
Addressing a forum sponsored by the Brookings Institution and the New America Foundation, Stern said business should join with labor in building such a system. While Stern was not specific about what kind of health-care system he envisions to replace the current one, he did say that the United States has to build its own system, not import a system from Canada or any other country.
Stern, who leads a union that represents 1.8 million members, including about 1 million health care workers, rejected calls for a single-payer, universal health insurance system built on Medicare, which have the support of many others in the labor movement.
He said that a new system should have multiple payers, not a single payer. "Single-payer is a stalking horse for I'm not sure what," he said.
A single-payer system would be financed by the federal government, presumably through taxes.
Stern said the easiest thing to do would be to expand the Federal Employees Health Benefits plan, which covers members of Congress and federal workers, to cover others. If that plan, which gives participants a choice of doctors and has lower premium costs, is good for Congress, "it is good for everyone," Stern quipped.
Stern said that under the current system, costs are rising and more employees are losing their benefits. Individual and families are being bankrupted by high costs, people are dying because they cannot afford to pay for care, and hospitals now are concerned about collecting fees from insured customers as well as those that are uninsured.
Employers Need to Speak Out
America is not just facing a "health care crisis," but is facing a "business crisis," Stern said, stating that health care costs are estimated to reach $17,522 per worker annually by 2010. He added that by 2008 employers will be spending more on health care than they make in profit. Employers should be speaking up for a new health system, he said. "You should be in the streets" yelling "we can't compete," he told the employer representatives attending the forum. He added that no changes in the health care system will occur until the employers make it an issue.
Todd McCraken, president of the National Small Business Association, agreed with Stern that the employer-based system is "broken, particularly for small businesses."
Instead of an employer-based system, McCraken called for a system of individual responsibility, where all individuals would be required to obtain coverage. He said that a "community rate" would need to be established and individuals would receive federal financial assistance for premiums, based on income.
Len Nichols, the director of the Health Policy Program at the New America Foundation, also advocated for a system of individual responsibility, but said for the time being some type of employer system will continue because "we have to continue pooling risks."
Nichols pointed out that the American Medical Association the week of June 12 endorsed individual responsibility as an additional approach to cover the more than 46 million uninsured Americans.
According to an AMA statement, under its proposal, individuals and families earning more than 500 percent of the federal poverty level--which currently would be $49,000 for an individual and $100,000 for a family of four--would be required to obtain a minimum of catastrophic health care and evidence-based preventive health care, using the tax structure to achieve compliance. Upon implementation of a system of refundable tax credits or other subsidies to obtain health care coverage, the AMA would support a similar requirement for those earning less than 500 percent of the federal poverty level.
Nichols contended that a single payer, Medicare for All system could work, but added that system is not feasible politically.
System Not Dead
Henry Aaron, a senior fellow at the Brookings Institution in the Economic Studies Program, disagreed with Stern's assessment that the employer-based system is dead. Most Americans still get health insurance where they work, he said, adding that 175 million workers and their families get insurance through work, or 60 percent of the population.
Aaron also contended that the employer-based system works because it pools risks, with workers with good and bad health as part of a group. Noting that other countries pool risks differently--some pool risks over the entire nation, Canada pools risks by provinces, and Germany pools over broad occupational categories--he said this is something the United States could consider.
Aaron dismissed the idea of making employees responsible for individual coverage. Employers would be encouraged to drop sponsorship and nothing would be done to make insurance affordable, he contended.
Citing efforts taking place in several states, Aaron contended that the best hope for health care reform is at the state level. He said the federal government should provide "financial carrots" to states that make measured progress in reducing the number of uninsured.
The forum also heard from John Matthews, senior vice president for human resources for Costco Wholesale, who said he doses not believe that employers should be taken out of the health care business. "We have a significant role to play, he said, adding that employers do a "far better job of managing health plans than government."
Costco, which has 90,000 employees in the United States, pays for 90 percent of its employees health care premiums. He said 86 percent of employees are covered and about 97 percent of eligible employees take the benefit.
Matthews said the company informs employees about what other employees are paying for health care and what the cost of services are so they can be effective consumers. Costco's philosophy is to help employees become more aware by talking to them about costs rather than making them pay a higher cost for health care.
Costco made a decision to "keep its eye on the long term and take care of its employees, he said. While the company took on a lot of heat for taking that stance, he said, he believes Costco has "created a model others can follow."
Noting that under many health plans there is no coverage for children's physicals or preventive checkups, Matthews advocated mandating employers to provide primary care coverage for employees and their dependents. He said this country has failed in this area, noting that providing primary care is the least expensive way to keep people healthy.
Copyright (c) 2006, The Bureau of National Affairs, Inc.