[Congressional Record Volume 140, Number 27 (Friday, March 11, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: March 11, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
EMPLOYER-BASED INSURANCE
Mr. DASCHLE. Mr. President, this week we had what I consider to be a
very significant development. And frankly, I am a little disappointed
that it has not generated more attention in the media. I am referring
to a public endorsement of employer-based insurance by more than 100
organizations--in fact, 115 to be specific--that represent labor,
scores of businesses, consumers and providers companies. For example,
the National Leadership Coalition for Health Care Reform, which signed
the letter, includes ACME Steel; Bank South Corp.; the H.J. Heinz
Corporation; Keebler Co.; Lockheed; LTV Steel; Safeway; Scott Paper;
U.S. Bankcorp; and Xerox, among other companies.
All of those businesses and other national-known organizations have
come forward this week to say they think the best way to achieve
universal coverage is through an employer-based insurance system. I
would think that would generate a tremendous amount of news. Just a
couple of weeks ago the news of one or two business organizations
concluding that they would not now endorse the plan proposed by the
President made the front page of several national newspapers. And yet
this major endorsement of a concept that has generated so much
controversy has not received anything like that kind of attention.
There has been a tremendous amount of misinformation about this issue
of employer-based insurance, sometimes called an employer mandate. That
is why we ought to take a look at the reasons why these organizations
and so many others have determined that the best way to achieve
universal coverage is through shared employer-employee responsibility.
First, and perhaps most importantly, if we accept that universal
coverage is our goal, a goal shared almost universally in this body,
there really are not many ways to accomplish this objective.
In fact, there are only three ways. One way is to do what some of our
colleagues have suggested, to create a single-payer system run entirely
through Government, financed by payroll or other taxes. Someone has
also suggested using a value-added tax with this approach.
The second approach proposed by many is that we require families and
individuals to take on responsibility for paying for health insurance.
They propose that this not be the responsibility of business, but it be
completely the responsibility of families. In other words, they are
proposing a family or individual mandate.
There have been a number of different analyses of the effect of a
family mandate. Two that I think are most disconcerting indicated that
if we were to require a family mandate, the premium would consume 17
percent of family after-tax income.
In other words, 17 percent of a family's disposable income would have
to go to health care, if we were to have a family or an individual
mandate.
And it gets even worse, according to another study, for those who are
in the 100 to 200 percent of poverty category, 47 percent of disposable
income for families in that bracket would be required to pay for health
insurance if we had a family mandate.
So obviously, when one looks at the ramifications of either a tax-
based system or a family mandate, there are very disconcerting
financial implications that I do not believe have been considered. We
hear a lot about how difficult it would be for a small business to
absorb the costs associated with taking on this responsibility. But
what is missing in that analysis is that it would be equally difficult
for a family to take on the same responsibility. If it is hard for
business, why is it not equally as hard or more difficult for a family?
Under the current system 84 percent of the uninsured live in families
where the head of household is employed.
It seems to me, it is a small step to build upon the current system,
where two-thirds of employers have already readily accepted the
responsibility for obtaining health coverage for their workers and
where 84 percent of the uninsured live in a family where the head of
household is employed. What a small step it would be compared to the
radical departure it is to ask families to take on that entire
responsibility.
One of the misconceptions about this shared responsibility, or the
so-called employer mandate, is that the employer would take all of the
responsibility. I get a lot of my businessmen who come to me and say,
``I don't understand why I should shoulder the entire burden. Why can't
it be a shared responsibility between employers and employees?''
When I inform them that is exactly what we are suggesting, the lights
come on. An understanding of that shared responsibility is the first
step to supporting a concept that I think has been misconstrued and
maligned in the current debate.
That is my first point, Mr. President; that if we are going to
achieve universal coverage, there are only three ways to do it: through
taxes, by shifting the entire responsibility onto the family, or by
asking for a shared responsibility between employers and employees.
The second point is that shared responsibility builds on a system, in
place for generations. The most radical departure from tradition would
be to require families to shoulder the whole burden, to require
Government and the taxpayers to take on this responsibility all by
themselves.
The third point is that shared responsibility avoids lost-shifting, a
phenomenon that occurs all too frequently today. I think people
understand how consequential cost shifting is. They have had to deal
with this issue all the time. They have been able to calculate on
their balance sheets that they are paying a larger share of their
health costs than they ought to be. In fact, in 1991, employers with
insurance paid $10 billion for medical care for people who do not have
insurance. That amount came right out of business' pockets. People
without insurance go to the emergency room and to the doctor's office.
Although doctors and hospitals can absorb the costs temporarily, they
must ultimately shift them onto the business community. And that
burden, those payments for the uninsured, is carried more heavily by
business than by anybody else--$10 billion in 1991 just for
uncompensated care, and $26 billion covering spouses and dependents in
noninsuring firms. In other words, people who take advantage of the
fact that their spouses have insurance and then forgo insurance
themselves, putting the entire responsibility on the employer of the
insured. So, cost shifting, Mr. President, is a very serious problem
and one that I hope, regardless of what else we do, we will address as
we look at health reform this year.
The fourth reason why an employer-based insurance program makes sense
is because we would reduce system-wide costs and according to studies
done we could actually see increased employment. The Employee Benefits
Research Institute estimates that we could gain 600,000 jobs if we
could end cost shifting, if we could make everybody financially
responsible for the care that they receive. CBO has said the
President's plan would save the business community $90 billion a year
between now and the year 2004.
The fifth reason why I believe this makes such good sense is that, no
matter what we do, we cannot avoid a mandate. We can say that we do not
want an employer mandate; that we do not want a family mandate; that we
do not want any kind of mandate. And you hear that often: We should not
be imposing mandates.
But such statements ignore the mandate we have right now, one that is
more inequitable, more problematic, more inefficient than any of the
others that have been proposed so far. Today, we have what I prefer to
call a status quo mandate. Those who pay for health care are required
to pay for those who do not. That is a mandate.
I do not think I would get one vote if I were to come to the floor
and present a voluntary insurance proposal where anybody could sign up
for insurance anywhere in the country but those who chose not to pay
could simply shift their responsibilities on to those who do. But that
is what we have today. That is the status quo. I do not think that is
right. I hope that regardless of what we do, we all recognize that the
status quo mandate, those who pay pay for those who do not, is unfair
and it ought to be ended.
My last point is that the American people support shared
responsibility, in poll after poll. They may be confused about what the
Clinton plan does or does not do. They may have concerns about
alliances and other features of the plan. But when it comes to whether
or not the American people want an employer-based insurance system, it
is unequivocal.
The Washington Post just last week reported that 73 percent of
Americans polled support an employer-based system for full-time
workers--73 percent, almost 3 out of 4; 69 percent support providing
coverage for part-time workers. Just a couple of weeks ago the Wall
Street Journal reported that 65 percent support an employer-based
system, especially if it includes small firms. So for small business,
large business, full time or part time workers, an overwhelming
consensus among the American people is that we have to have an
employer-based system. Maybe they already understand that if you do not
have that, the only other option is to increase taxes or use a family-
based mandate.
They understand the consequences of devoting 17 percent of after-tax
income to health care. They know they cannot find the resources for
that.
So I hope as we examine our options we will look very carefully at
the ramifications of choosing some radical departure from the current
system. I do not think the American people want a radical departure. I
think they clearly have demonstrated their determination to see some
form of shared responsibility between employers and employees alike.
I hope that we recognize these facts as we debate health reform
options, and hope in the not-too-distant future we can conclude that
the best approach to achieving universal coverage is employer-shared
responsibility.
I yield the floor.
Mr. DOLE addressed the Chair.
The PRESIDING OFFICER. The Republican leader.
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