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Business Coalition Expresses Concern About Wyden Health Care Bill

By Mary Agnes Carey, CQ HealthBeat Associate Editor

July 8, 2008 -- Bipartisan legislation that would make sweeping changes to the current system of employer-sponsored health insurance would cause major disruptions for millions of Americans and make it more difficult to provide health insurance to the 47 million Americans who currently are without it, according to a coalition of insurers, manufacturers, and other business groups.

In a letter sent Monday to Sen. Ron Wyden, D-Ore., and Sen. Robert F. Bennett, R-Utah, the coalition said the senators' "Healthy Americans Act" (S 334) "would cause large-scale disruption in the source, financing, and regulation of the employer-sponsored health coverage that now serves most Americans." The measure also would undermine the ability of employers to offer uniform benefits plans across state and local lines under the Employee Retirement Income Security Act (ERISA), the groups wrote.

Members of the National Coalition on Benefits, which sent the letter, include America's Health Insurance Plans, Blue Cross and Blue Shield Association, Business Roundtable, General Electric Company, and the U.S. Chamber of Commerce. The coalition of more than 150 employers and trade associations said it provides health, retirement, and other benefits to more than 130 million Americans who are covered by employer-sponsored health plans.

Wyden said Tuesday he had not seen the letter. "I'll have to take a look at it," he said. Bennett spokeswoman Tara Hendershott said the senator was in North Carolina Tuesday attending the funeral service of former North Carolina Sen. Jesse Helms and had not had a chance to review the letter.

Wyden's bill, which is cosponsored by Bennett and a bipartisan group of 14 other senators, aims to achieve universal coverage by shifting away from the employer-based system of health care coverage. Instead of companies helping to buy insurance for their workers, Wyden proposes that private insurers offer coverage directly to consumers. Employers would transfer money they now spend on employee health insurance to workers' wages. State-based "Health Help Agencies" would offer information and guidance, and the proposal would encourage plans with low-cost preventive care and chronic disease management—all with an eye toward reducing future health care costs. In April, Wyden amended his measure to clarify that employers can continue to offer employees health care coverage.

Wyden has steadily built bipartisan support for the measure in hopes that it will play a major role in congressional debate over how to fix the nation's ailing health care system. "Providing a sensible and affordable market-driven health care plan for every American is no longer just an idea; it is a goal within our reach," Wyden said in a statement Monday announcing the bill's most recent co-sponsor, Sen. Maria Cantwell, D-Wash. Separately, Rep. Debbie Wasserman Schultz, D-Fla., has scheduled on Wednesday a news conference to reintroduce the amended version of the Wyden bill in the House.

In their letter, the coalition members said while the bill would continue to allow employers to offer health coverage to workers, "we expect that the source for most health coverage would soon be under the new system of state-sponsored health insurance choices, not through employers" and that employers that chose to continue to offer health coverage would not be able to offer uniform benefit plans or administer them "under a consistent regulatory framework" because the legislation would allow states to obtain waivers of any federal laws or regulations related to health coverage. "This would lead to state-by-state, or even county or city, regulation of employer-sponsored plans. This is unworkable for employers with a nationwide or multi-sate workforce," the groups wrote.

The coalition also noted that the bill's changes in tax treatment of health benefits would penalize employer-sponsored coverage and cause most employers to cease sponsoring health plans. In May, a joint analysis from the Congressional Budget Office and Joint Tax Committee said that the plan would be "budget-neutral" when it was fully implemented and would begin to produce surpluses in future years, thanks to changes the plan would make in the tax code.

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