By Renee Radcliff Sinclair , U.S. Chamber of Commerce

The term “Hot August Nights” took on new meaning this year as members of Congress returned to their home states to talk with citizens about proposed changes to America ’s health care system.  While this highly emotional issue has spawned some hyperbole, it’s important to note that businesses large and small have legitimate and very real concerns about the outcome of this debate. 

Congress is now debating legislation in which HR 3200 would impose an employer mandate on all companies to provide some level of insurance benefits or surrender a financial penalty to the federal government.  This could be a per-employee fine or as much as eight percent of a company’s total payroll.  The U.S. Chamber believes this provision will hit hardest those companies that can least afford to take another hit, especially while working toward recovery from one of the worst economic periods in our nation’s history.  The “qualified health plan” employers would be required to offer has yet to be determined and will likely result in a one-size-fits-all plan.

Also, the new government-run public option proposed in HR 3200 would be an unfair competitor to private plans for a couple of reasons.  First, it would be subsidized by our tax dollars and secondly, it could become big enough to drive down reimbursements to doctors and hospitals – much like Medicare does today – shifting costs to the private sector.  Conceivably, consumers would flock to the public plan because its premiums would appear to be cheaper (due to taxpayer subsidies), and ultimately there would be no incentive for private plans to remain in business.

Finally, the major question yet to be answered is how will we pay for these proposed reforms?  This will be the toughest challenge Congress faces.  A number of options are being discussed, including a “surtax” on the wealthiest which will directly impact small business owners who operate as an S corporation, and reducing some tax breaks such as those on charitable giving and mortgage interest deductions.  At the very center of this debate is whether to tax health benefits offered by employers.  This potential tax increase to employees would do even more to push employees into the public system.

Other options being considered by business leaders from across the country are:

Get costs under control.  Congress needs to look at the real drivers of health care and insurance costs.  Medical malpractice insurance premiums are at an all-time high and in an effort to avoid malpractice lawsuits physicians are now ordering multiple diagnostic procedures where in the past consumers would have been satisfied with one.  Greater progress needs to be made in the areas of wellness, disease prevention and management.  Individuals with chronic illnesses need to be kept out of the emergency room and that can be accomplished through appropriate wellness and disease management programs.  States need to rethink insurance coverage mandates and provide greater options for individuals to choose the kind of coverage they need.

Reform the insurance system.  Congress must eliminate the use of pre-existing conditions as a barrier to insurance coverage and guarantee that any individual or entity will be issued a policy and that this policy will not be revoked due to special needs.  Congress should also create an individual obligation to obtain coverage and then provide subsidies for those who are truly in need. 

Create a vibrant marketplace.  The U.S. has a highly fragmented insurance system with ranging coverage mandates from state to state.  Congress should develop a national, all-inclusive system that removes this fragmentation and allows individuals and businesses from anywhere in the country to enroll.  We must also improve pooling mechanisms, choice and competition.

It is felt that these three steps, at little or no cost to taxpayers, could make the insurance system work for everyone – increasing access for the uninsured, improving our health care delivery system, and making serious progress toward controlling costs. 

In closing, reforms that support the free enterprise system – getting costs under control, reforming the insurance industry and creating a vibrant market offer the best option for Americans.  For more information and to check out ways that you can help influence the debate, check out the U.S. Chamber’s health care toolkit. 

Renee Radcliff Sinclair is executive director of Congressional & Public Affairs for the Northwest Regional Office of the U.S. Chamber of Commerce.