In an effort to regain control of the healthcare reform debate, President Barack Obama plans to take his message to Congress Wednesday.
The debate followed lawmakers home, where they came face to face with constituents’ questions, concerns, and sometimes even anger. Some of what they were hearing may very well influence how they view the proposals up for consideration as they return to Washington.
One of the most contentious debates is whether the final bill should include a public plan–a government-funded, government-run healthcare option–similar to Medicare. Some critics say it would give the federal government control over what should be personal decisions and would put private insurers out of business. Others say some employers will use it as a way to avoid providing coverage for their workers.
Many liberal lawmakers, including several Congressional Black Caucus members, have vowed not to vote for any bill that doesn’t include a public option. And to their dismay, the president seems to be wavering on a previous commitment to it.
Christina Romer, chair of the president’s Council of Economic Advisors, says Obama still believes a public option is the best way to ensure that everyone has the same level of access to affordable care and provider options. That doesn’t mean he’s ruling out the notion of healthcare cooperatives–nonprofit groups that create networks of providers and negotiate payment rates with them–which may attract bipartisan support.
“Some members have mentioned co-ops, and it’s something that we and Congress will be thinking about and studying as we go into the fall,†Romer said.
Here’s a look at how provisions in legislation agreed to by the House Tri-Committee (Ways and Means; Education and Labor; and Energy and Commerce charged with healthcare oversight) and a bill from the Senate Health, Education, Labor and Pensions committee would impact small business. (Eventually, a third proposal from the Senate Finance Committee will be added to the mix and any final bill passed will be based on components of each committee”s proposals.)
House Tri-Committee’s America’s Affordable
Health Choices Act of 2009
Employer Mandate
Businesses with annual payrolls of $250,000 or less will be exempt from the requirement to provide health insurance coverage.
Businesses that provide coverage must pay at least 72.6% of the premium cost for single coverage and 65% for family coverage.
Businesses whose annual payrolls exceeding $250,000 must provide health insurance to workers or pay a sliding scale penalty that will range from 2% of payrolls of $250,000 to $300,000 up to 6% for payrolls of $350,001 to $400,000. The penalty fees will go into a Health Insurance Exchange Trust Fund to help finance affordability credits.
An Energy and Commerce Committee amendment would allow employees of companies with payrolls of $500,000 or less to enter the exchange and receive affordability credits. It also calls for a phase-in of the pay-or-play requirement for small businesses with payrolls between $500,000 to $750,000.
Businesses may choose to provide coverage to part-time employees by paying a share of the premium or contributing to the insurance exchange where employees can then seek coverage.
Pros: An employer mandate would level the playing field for businesses that have had problems attracting or retaining talented employees. Small businesses may become more appealing to talented workers who’ve stayed with larger employers because of benefits such as insurance coverage.
Employees of the smallest businesses will be able to buy insurance through the exchange.
Cons: It may become more expensive for some employers to provide coverage if they currently pay a smaller percentage of the premium cost than lawmakers are proposing or don’t provide coverage at all. Some fear, however, that employers will have to reduce wages or jobs and raise prices.
Health Insurance Exchange
It’s currently open to employers with 10 or fewer employees in year one and 20 or fewer in year two. An amendment would make the exchange open to firms with 15 or fewer employees in year one and 25 or fewer in year two.
Pros: Employers will be able to purchase private or public option coverage and receive the benefits of large-group rates.
Would provide stabilized premium rates and protections against rate hikes if an employee becomes sick or injured
Cons:
Some employers may be tempted to not provide insurance coverage and send employees to the exchange.Some organizations believe it’s unfair to deny access to the exchange to companies with 21 or more employees.
Small Business Tax Credits
Small businesses with fewer than 25 employees earning an average wage of less than $40,000 will receive a tax credit for the cost of providing health insurance coverage. The credit cannot be applied to the cost of coverage for employees earning more than $80,000 per year.
Small businesses with 10 or fewer employees who on average earn $20,000 or less are eligible for a tax credit of up to 50%.
The credit rate would phase out as the number of employees and average wages increase and would fully phase out for firms that grow to 25 employees or average wages of $40,000.
Pros: Businesses with fewer than 25 employees will be exempt from the pay-or-play requirement.
Cons: The NFIB says that the average annual wage at most companies with 10 or fewer employees exceeds $30,000, thereby limiting the value of the tax credit. It also says that owners may stagnate wages to reap the benefits of the tax credit.
Senate Health, Education, Labor and Pensions Committee’s Affordable Health Choices Act
Employer Mandate
Businesses that employ 25 employees or fewer will be exempt from the pay-or-play requirement to provide health insurance coverage.
Employers must pay at least 60% of the monthly premium of qualifying coverage or a penalty of $750 for each uninsured full-time worker and $37 per uninsured part-time employee.
Small Business Tax Credits
Businesses with 50 or fewer full-time employees who earn an average wage of less than $50,000 will be eligible for a program credit of up to $1,000 for each employee with single coverage and $2,000 for each employee with family coverage, depending on the size of the employer, with the potential for bonus payments of the employer contributes more than 60% of the premium.
Senate Finance Committee’s Proposal
Members of this committee are working to draft a bipartisan proposal. Currently, no decisions have been made, but according to a staff member, they are considering a tax credit to help small businesses purchase insurance coverage. The panel also is considering making employers that decide not to provide coverage because the exchange is available be responsible for paying the cost of the tax credit for each employee. Certain small businesses would be exempt.
White House Wish List for Small Business:
–Reform that will increase entrepreneurship and expand the pool of workers available to small businesses
–Expanded coverage to improve workplace productivity and reduce absenteeism
–Lower premiums and higher quality health insurance coverage through the exchange
–Tax credits for small businesses that provide insurance coverage
–Exemptions from providing coverage for the smallest firms