Lawmakers Told Not to Disturb Employer Health System

April 23, 2009 ( - U.S. House lawmakers were urged not to pull apart the existing employer-based health system in the ongoing Congressional health care reform effort.

Those pleas came during a Thursday hearing before the Health, Employment, Labor and Pensions Subcommittee of the House Education and Labor Committee, which called the session to explore how the current U.S. health-care delivery system can be improved.

Towers Perrin   PrincipalMichael Langan, appearing for theAmerican Benefits Council employer trade group, told lawmakers they should focus on making it easier for employers to offer employee insurance.   

“For us, the best reform options are those that preserve and strengthen the voluntary role employers play as the largest source of health coverage for most Americans,” Langan said. “By keeping employers engaged as sponsors of health coverage, we also keep the innovation and expertise employers bring to the table in the collective effort to achieve broad-based, practical health system reform.”

Langan opposed the approach underlying efforts by some government agencies around the country to force employers to either provide health coverage directly or else contribute to an insurance pool (see  Kennedy Turns Down Stay Request on SF Health Initiative Challenge ).

“Indeed, one reason we believe that a ‘pay or play’ approach would be an inappropriate coverage solution is that the myriad requirements that would inevitably be imposed on those who might prefer to sponsor health coverage would ultimately, if unintentionally, result in a net reduction in employer-sponsored coverage by leading some companies to simply ‘pay’ rather than ‘play,'” Langan testified. “This would lower the level of active employer engagement and their important role as innovative and demanding purchasers of health care services.”

Employer System ‘of Great Importance’

Meanwhile, FamiliesUSA Executive Director Ron Pollack said the health care advocacy group also backs moves to build on the current employer-based program rather than replacing it.

“We believe that the most effective and efficient way to achieve both of those goals is to build upon the existing system,” Pollack testified. “The employer-based health insurance sector is of great importance, covering well over half of all non-elderly insured Americans.”

Pollack said lawmakers should:

  • Strengthen employer-based health coverage by improving regulation of the market;
  • Subsidize coverage for those workers with low and moderate incomes to enable them to obtain and keep health coverage; and
  • Expand the Medicaid program to fill in the gaps for low-income people whose needs are not met by the employer-based system.

Langan also urged lawmakers to approach the reform effort from the perspective of keeping a national uniform regulatory setup.

"We believe that a vitally important component of maintaining a strong employer-based health system starts with protecting the federal regulatory framework established by the Employee Retirement Income Security Act (ERISA) that allows employers to offer valuable benefits to their employees under a single set of rules, rather than being subjected to conflicting and costly state or local regulations," Langan said.

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