Masonry Magazine December 1993 Page. 22
LEGISLATIVE UPDATE
The Impact of the Universal Health Care System Proposal
Health care reform will have a major impact on the construction industry-especially small businesses. Any reforms should consider the overall impact on businesses and the economy.
By MICHELLE PREZEKWAS
MCAA Legislative Assistant
President Clinton has recently proposed a new plan to overhaul the American health-care system. A plan which promises to provide affordable and permanent health insurance coverage for every American citizen. So much information is available through the media it becomes difficult to know the essentials of President Clinton's health-care proposal. MCAA wants to help you to familiarize yourself with the basic ideas of the health plan and how it may affect your business.
The essential players of President Clinton's new health-care system consist of payers, a middleman, health-care providers, and a system of checks and balances consisting of government and advisory boards.
The Payers-Business, Consumers and the Federal Government-All employers would be required to pay something toward their employees' health care-regardless of how much they earn and whether they work full time or part time. Large firms with 5,000 or more employees can bypass the health alliances and negotiate directly with health plans but will still be asked to pay 80 percent of premium costs. Small and medium-sized employers will pay a health alliance eighty percent of the cost of the average plan. The proportion of payroll that a small company has to pay would have an upper limit, depending on the company's size and average wage.
Consumers join an alliance for their region, paying their premiums to the alliance and selecting one of the offered plans. Premiums for the self-employed and those with low incomes would be a fixed portion of their income. The federal government will pay alliances for coverage for Medicare and Medicaid patients and the unemployed.
The Middleman-A Health Alliance-A health alliance will become the link between the patients and health-care providers. Employers, employees and others would pay their premiums to the alliance, which would pass the money to the health plans. The alliance would also review the health plans to make sure they meet federal requirements and offer low-cost, quality care.
Health-Care Providers-Health Plans-Health plans will offer at least the minimum benefits package as prescribed by the National Health Board. The plans could take the form of fee-for-services, health maintenance organizations or anything in between. Competition among health plans is meant to keep premium costs and health care cost down.
Checks and Balances-Government and Advisory Boards The federal government will create a new National Health Board consisting of seven board members as appointed by the President and confirmed by the Senate. The Board would regulate standard benefit packages and their costs. Several federal advisory boards would be established to deal with issues such as drug prices, doctors' concerns and quality care.
State governments will establish one alliance or several depending upon the size of the state. Each alliance would have its own territory within the state and the health plan would be tailored to the needs of its area.
How can all of these factors affect your business costs? Employers would be required to pay eighty percent of the average cost of a health plan in an alliance, with employees paying the other twenty percent. The employee also would pay extra if choosing a plan more expensive than the average.
The projected average annual cost of a plan for an individual would be about $1,800; thus the employer would pay about $1,440 and the employee, $360. Family premiums are estimated to annually cost about $4.200. Those employees who earn $10,455 or less a year would receive government subsidies to cover their share of the premium.
Employers with fewer than fifty workers would have their contributions capped at a percentage of their payroll the cap ranging from 3.5 percent to 7.9 percent, depending on average salaries. Regardless of size, no employer would be required to spend more than 7.9 percent of total payroll on health insurance.
Employers and employees would be able to deduct the premiums they pay for the standard benefit package, but both would be taxed for benefits that go beyond the national package. Health benefits that were in place by January 1993 would become tax exempt for 10 years. This is an important factor to unions that have negotiated contracts with generous health benefits in lieu of pay increases.
MCAA believes that any health care reform will have a major impact on the construction industry-especially small businesses. Any reforms should consider the overall impact on businesses and the economy, so that people aren't put out of work by businesses that are forced to close because of health care costs and policies which become a financial burden.