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FOR IMMEDIATE RELEASE: CONTACT: Health Care Reform As the 2008 election entered its final weeks, the issue of health care reform played out on television screens across the country. President-elect Obama spent over $100 million in health care television ads alone. He will undoubtedly push the next Congress to pass his ideas on health care reform. The object is to make health care available to everyone – a laudable goal. However, I am concerned that some proposals will make your health insurance more expensive, not less, and do nothing to protect your current coverage. Rising health care costs are consuming an increasing share of our paychecks. From 2000 to 2008, the cost of the average family health care plan doubled from $6,348 to $12,680. While we tackle the problem of ensuring that every American has access to insurance, we must be careful that Washington does not make it harder for working families to afford their current coverage. For example, Obama wants to establish a government-run “public” plan – for the millions of Americans who lack affordable insurance options. People with private insurance already pay a “hidden tax” to help subsidize government-run programs such as Medicare and Medicaid. One well-respected actuary estimates that the hidden tax is $88.8 billion per year. This means that a family of four pays $1,512 (or 10.6 percent) more in health insurance premiums annually to cover the hidden tax. A new government-run plan would increase the hidden tax paid by working families, making the average cost of Arizonans’ health coverage more expensive. Rising health care costs strain not just family budgets, but businesses as well. Today, the majority of Americans -- 158 million people -- receive health care benefits through their job or a family member’s job. As health insurance premiums rise, employers are forced to lower wages or reduce employment. For example, a 20 percent increase in health insurance premiums would cost 3.5 million workers their jobs, force a similar number of workers from full-time jobs to part-time jobs, and cut workers’ annual income by $1,700, according to research by Harvard economists Katherine Baicker and Amitabh Chandra. The link between health care costs and employment is important because nearly every health care “reform” proposal mandates that employers pay a penalty if they do not offer their employees meaningful health coverage. While this may sound fair, it is the workers who ultimately shoulder the costs – that is, if their employer can still afford to hire them. If an employer mandate increases the cost of employing workers, then employers will be forced to make difficult decisions either to lower wages, forgo the hiring of additional workers, or let workers go altogether at a time when the unemployment rate is projected to reach 8.5 percent by the end of 2009. I believe one hidden agenda of the “reformers” is to encourage employers to dump their employees into the government-run plan -- and there is nothing in the current reform proposals to prevent that from happening. In part, this is why the Lewin Group estimates that 22.5 million workers and dependents would lose their employer-sponsored health coverage under President-elect Obama’s plan. The debate in Congress will allow us to evaluate these health care proposals and judge whether the details match the promises made on the campaign trail. A government-run plan and an employer mandate, I believe, would exacerbate, not fix, the problem of growing health care costs and would erode employer-sponsored health coverage. In finding ways to enable all Americans to obtain affordable health care coverage, I believe Congress must build upon, not completely dismantle, our current health care system and support targeted solutions that lower health care costs and improve health care quality. I look forward to hearing what you think. ### |