Health-Care Reform: Act Now or Pay Later
Caudron, Shari, Personnel Journal
For most Americans, a trip to the doctor is a fairly uncomplicated proposition. You get sick, call for an appointment, the doctor sees you, the insurance company is billed, your employer pays the insurance company. We understand the system, and those of us with employer-paid health plans are quite accustomed to getting quality medical care on demand. The system isn't perfect, many people are uninsured and costs are on an upward spiral, but 80% of Americans are satisfied with the medical care they receive. All this may change in the near future, however, as Congress grapples with national health-care reform.
Allowing government to overhaul the nation's health-care system is frightening. Either of these institutions, taken by itself, is tough to figure out. Put them together, and you have a process that is mind-numbing in its complexity. What do the glad-handers in Washington know about the delivery of medicine? How can they balance our perceived right to the very best care with the economic imperative of controlling costs? The answer, of course, is that they can't. Not without a lot of input from those who understand the system, including employers who have paid most of this country's health tab for years.
At this point, no one knows what health reform will look like. President Clinton's Health Security Act, introduced with great pomp and circumstance last September, has gotten the majority of ink on the subject. But there are, in fact, more than 60 bills working their way through Congress that deal with health-care reform in one way or another. With so much sorting out to do on Capitol Hill, how concerned should human resources executives be at this point? In a word, very.
Among the various reform proposals are suggestions for a payroll tax that would be used to underwrite the entire health-care system. There are proposals to eliminate or limit the tax deductibility of employer health benefits. And there are calls for companies to increase the number of health benefits they provide. Clearly, the potential cost to employers is too great for HR professionals not to be involved in the debate raging in Congress.
Granted, some companies may financially benefit from health reform. A unionized auto maker that currently pays close to 20% of payroll on health benefits might think a 7.9% payroll tax--such as the one proposed by Clinton--sounds pretty good. Companies that offer generous spousal benefits, employee assistance programs, on-site wellness activities and retiree health care might also breathe a sigh of relief to not have to administer and pay for such complex benefits.
But the majority of employers are understandably nervous about what reform will look like. HR managers are rightly concerned about the reform's potential impact on their companies' profits as well as on how their departments' work loads and responsibilities will change. Regardless of what side of the debate you're on, it behooves you to have a say in the process. It's what makes this country a democracy.
Of 535 members of Congress, fewer than 50 of them really understand the health-care issue, says Robert Laszewski, a principal with Health Policy and Strategy Associates in Washington, D.C. "Most members are only a little less lost than John Q. Public when it comes to such things as health alliances, risk-adjustment methodology, premium-cap formulas and the difference between workers' compensation integration and coordination," he says. HR executives who understand these and other aspects of the health-care system must make their voices heard for health-care reform to have any promise of being something that business can live with.
By now, it's no surprise that health reform is on the front burner. There are 37 million uninsured and 22 million underinsured Americans, health costs are rising faster than the gross national product, and companies are paying a larger and larger percentage of profits to cover their employees' medical needs. …