Kennedy Introduces Plan To Require Some Employers To Offer Health Coverage

As expected, Sen. Edward Kennedy (D-Mass.) on Thursday unveiled legislation that in part would require some employers to offer health insurance to employees, CongressDaily reports. The legislation, announced at a speech at Families USA in Washington, D.C., is titled the Health Security and Affordability Act (Rovner, CongressDaily, 1/22). Under the plan, employers with 50 or more employees would be required to provide health coverage to employees, with the federal government paying costs that exceed 12% of their payrolls. Employers with between five and 50 workers could either offer health coverage or contribute to the national program, while employees in firms with fewer than five employees could rely on the national program. The plan would require most large employers and profitable smaller employers to pay 75% of the cost of employees' health plans. The national health program would be modeled after the Federal Employees Health Benefits Program, and enrollees could choose from several different plans and pay premiums based on their income, with the federal government paying the remainder. The plan would cost the federal government an estimated $100 billion annually (California Healthline, 1/22). Aides for Kennedy said that the proposal, if implemented, could lower overall health spending by as much as $130 billion because of higher productivity and increased access to preventive care for uninsured individuals (CongressDaily, 1/22). The bill also includes provisions to expand disease prevention programs; make administration in health plans and hospitals more efficient; allow prescription drugs to be imported from Canada and European Union nations; and authorize Medicare to negotiate prices directly with drug companies. According to the Census Bureau, 61% of U.S. residents in 2002 had employer-sponsored health coverage; almost all businesses with more than 200 employees and 65% of small employers offer coverage (California Healthline, 1/22).

Kennedy also criticized health proposals put forth by President Bush in his State of the Union address (CongressDaily, 1/22). In his speech Tuesday, Bush said Congress should pass legislation that would permit the formation of association health plans, give tax credits to help people purchase private health insurance, cap awards in medical malpractice lawsuits to help decrease insurance premiums and encourage people to purchase health savings accounts (California Healthline, 1/22). Kennedy said that the tax credits would be insufficient to pay for health insurance and would "cause millions more to lose the good employer coverage they now enjoy" (Baldor, AP/Daytona Beach News-Journal, 1/22).