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National Reform Plans Don’t Call for Employer Mandate

California often is considered a bellwether state in health care matters, but President Obama and House and Senate leaders didn’t follow California’s lead in seeking to require employers to share the cost of expanding health insurance coverage.

When Gov. Arnold Schwarzenegger (R) laid out his plan to overhaul California’s health care system in 2007, an employer mandate was a central element of the proposal, providing an integral component of his “shared responsibility” approach to health care reform.

The plan would have required employers to pay a percentage of their payroll to help fund the coverage expansion, with firms with the smallest payrolls paying nothing and the largest firms paying 4% of payroll.

The Healthy San Francisco program goes a different route.  The effort requires employers with 20 or more workers to contribute to the cost of ensuring that workers have access to health care services by:

  • Contributing to employee health care spending accounts;
  • Paying into the city’s fund for Healthy San Francisco; or
  • Providing health insurance benefits.

Schwarzenegger’s approach might have been less persuasive to members of Congress and the Obama administration because it never cleared the Legislature, and Healthy San Francisco’s offerings don’t actually constitute health insurance.

For those reasons, it’s understandable that national health care reform efforts’ provisions dealing with employers generally go a different way, although the House bill would impose an 8% payroll tax on firms that do not offer health plans that meet certain minimum benefits.  The requirement would kick in for firms with annual payrolls of $500,000 to $750,000.

The Senate bill takes a more targeted approach and would impose fees on firms with more than 50 employees only if their workers are receiving tax credits to purchase coverage in a health insurance exchange.  Large firms would be charged $3,000 per full-time worker receiving tax credits for coverage if the firm’s health insurance options are unaffordable, but that fee would drop to $750 per worker getting tax credits if the employer doesn’t offer health insurance benefits at all.

Similarly, President Obama’s plan — which he unveiled on Feb. 22 — does not advocate an employer mandate and would impose fees on firms whose employees receive tax credits to buy coverage through the exchanges.  However, the president’s plan would set the fee at $2,000 per worker at firms that do not offer coverage and would waive the fee for the first 30 workers who get tax credits to buy coverage.

Despite the more measured approach to business, the U.S. Chamber of Commerce largely has been critical of Democrats’ health care reform plans.  Time will tell whether lawmakers will come up with a plan that is more appealing to the chamber, or even if health care reform proponents will be able to come up with the votes to move overhaul legislation forward at all.

Administration News

  • On Feb. 22, White House press secretary Robert Gibbs said the White House would be willing to post the Republicans’ alternative plan to Obama’s proposal on its main Web site before Thursday’s bipartisan summit, The Hill‘s “Hillicon Valley” reports. In a statement responding to Gibbs’ suggestion, Michael Steel — a spokesperson for House Minority Leader Boehner — said, “Our health care alternative — the full text of the legislation — has been available at for months, which President Obama knows, since he discussed it with us in Baltimore a few weeks ago” (Romm, “Hillicon Valley,” The Hill, 2/22).

Debate on Reconciliation

  • Democrats would face a series of tough parliamentarian hurdles if they use the budget reconciliation process to pass health care reform legislation, according to Robert Dove, a former chief Senate parliamentarian, The Hill‘s “Blog Briefing Room” reports. Dove, who held the post for 12 of his 36 years in the Senate, said that reconciliation would be particularly challenging for health reform (Young, “Blog Briefing Room,” The Hill, 2/16).
  • On Feb. 19, House Minority Whip Eric Cantor (R-Va.) urged President Obama to reject any plan that would use the budget reconciliation process to pass health care reform legislation, The Hill‘s “Blog Briefing Room” reports. In a statement, Cantor said, “By using the reconciliation process, the administration and Democrat leaders are sending a clear signal that they still refuse to listen to the American people and have no interest in bipartisanship” (O’Brien, “Blog Briefing Room,” The Hill, 2/19).
  • In a telephone call on Feb. 17 with President Obama and White House Chief of Staff Rahm Emanuel, both Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.) said they were unsure if they had secured enough votes to proceed with reconciliation, Politico reports. At least 10 Senate Democrats have said they are reticent to use the process (Frates, Politico, 2/19).

Republicans Gear Up for the Summit

  • Senate Budget Committee ranking member Judd Gregg (R-N.H.) said that he is confident that some type of bipartisan agreement to move forward with health care reform legislation would emerge from the Feb. 25 summit, the AP/Los Angeles Times reports. Gregg said, “There are a whole series of things that would improve the health care delivery system that both sides can agree on,” adding, “The opportunity is there” for a bipartisan agreement (Ramer, AP/Los Angeles Times, 2/18).
  • In a memo distributed to Republican leaders in mid-February, House Republican Conference Chair Mike Pence (Ind.) said that “House Republicans are ready to work with the president and Democrats in Congress, but the starting point cannot be the same job-killing bill Democrats promoted this past year” (House, CongressDaily, 2/17).
  • On Feb. 16, House Ways and Means Committee ranking member Dave Camp (R-Mich.) — an invitee to the summit — called for lawmakers to “scrap this bill and begin again,” adding, “Let’s begin again by focusing on lowering costs” (Werner, AP/San Francisco Chronicle, 2/17).

Renewing the Push for a Public Option

  • On Feb. 16, Democratic  Sens. Michael Bennet (Colo.), Sherrod Brown (Ohio), Kirsten Gillibrand (N.Y.) and Jeff Merkley (Ore.) sent a letter to Senate Majority Leader Harry Reid (D-Nev.) asking him to reconsider eliminating a public option from the chamber’s health reform bill (HR 3590), The Hill‘s “Blog Briefing Room” reports (O’Brien, “Blog Briefing Room,” The Hill, 2/16). The next day, Democratic Sens. Al Franken (Minn.), John Kerry (Mass.), Patrick Leahy (Vt.) and Sheldon Whitehouse (R.I.) signed on to the effort, as did independent Sen. Bernie Sanders (Vt.) (Drucker, Roll Call, 2/17).

What’s in the Bills?

  • On Feb. 15, House Democratic aides said a final health care reform bill likely will not include new regulations on medical malpractice insurers largely because of industry pressure, Politico reports. Such restrictions could have included the removal of malpractice insurers’ exemption from antitrust laws (O’Connor, Politico, 2/16).

Shaping the Debate

  • On Feb. 17, Health Care for America Now launched a week-long campaign to encourage Congress to pass sweeping health care reform legislation, Politico‘s “Live Pulse” reports. HCAN and its partners have scheduled 40 events in 32 states (O’Connor, “Live Pulse,” Politico, 2/16).
  • Despite the ailing economy, 15 health care political action committees increased their donations to $11.7 million in 2009, a 14% increase from 2007, USA Today reports (Schouten, USA Today, 2/17).


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