Corporations Relying on Government Health Programs
The New York Times on Sunday examined how many U.S. corporations increasingly are relying on government to provide health care benefits for employees, despite a traditional stance that public assistance programs were bad for business. For instance, in the 1960s, when Medicare and Medicaid were being considered, many businesses "warn[ed] of the doomsday of socialized medicine," the Times reports.
But as costs have risen, large companies "have become more willing to pare away workers' health care and pensions" and have "tried to turn the responsibility for some of these benefits over to the government" in order to avoid "stirring the ire of the rank and file," according to the Times. As a sign of the change, the Times notes that the Employers' Coalition on Medicare -- which includes Caterpillar, Goodyear and the National Association of Manufacturers -- was a "major supporter" of the new Medicare prescription drug benefit, the Times reports.
At the time of the drug plan's approval in 2003, the companies "were promised billions of dollars in subsidies" if they continued to provide drug benefits to retirees, according to the Times.
Theda Skocpol, a Harvard University dean who informally advised the Clinton administration on social policy, said, "The big irony in the health care area is that actually American business would be better off if there were a national health insurance system like Canada. Costs would be easier to keep down, and there would be more flexibility."
Donald Moran, a health care consultant and former senior budget official in the Reagan administration, said that the Medicare drug benefit "was the last hurrah" for new entitlements, "and that from here on in, we are going to try to hold on to what we have got." Moran added, "In part, that is because the fiscal dynamics of [the Medicare drug benefit] really stink" (Levy, New York Times, 1/29).