WASHINGTON, D.C. | July 30, 2009 -
On July 17, 2009, after forcing an all-night legislative session, Democrats on the House Education and Labor Committee approved partisan legislation calling for a government takeover of our nation’s health care system. Democrats secured passage of the bill over bipartisan objections, with three Democratic members joining all Republicans in voting no.
The Education and Labor Committee oversees employer-provided health care coverage, which includes plans governed by the Employee Retirement Income Security Act (ERISA). ERISA provides both uniformity and flexibility for employers by exempting these plans from many complex, contradictory, and costly state insurance coverage mandates. H.R. 3200 undermines the ERISA framework, making businesses both large and small conform to new federally dictated coverage mandates or risk significant new taxes and financial penalties.
- Punitive “Pay or Play” Scheme. Under the Democrats’ legislation, all employers – even the smallest businesses – will be required to “play” by offering federally approved health benefits or “pay” a new tax – essentially, a tax on jobs – equal to eight percent of payroll. Businesses would have to “pay or play” regardless of whether they earn a profit. Although Democrats phase down this jobs tax for certain micro-businesses, countless small employers will be caught in its web of government control and costly penalties.
- Government, Government, and More Government. H.R. 3200 is a government takeover of our nation’s health care system through and through. From the creation of an Orwellian-sounding Health Choices Administration (to be headed by a new, czar-like Health Choices Commissioner) to the establishment of a government plan that would underpay physicians and force costs to be passed along to consumers and private plan sponsors, this legislation is designed to empower bureaucrats and engineer federal dominance over health care decisions.
- Bureaucrats Coming Between Patients and Doctors. The Democrats’ legislation opens the door to comparative effectiveness research, a tool used in other countries to ration care and deny critical medicines and treatments to sick and elderly patients. It also empowers government bureaucrats – headed by the all-powerful Health Choices Commissioner – to dictate “acceptable coverage” levels, which are likely to become de facto coverage maximums that will limit benefits and services for all Americans.
Consequences for Workers & Small Businesses
Numerous analyses have projected dire economic and personal consequences if the Democrats’ proposal were ever to become law. From lost jobs to lost health care coverage, Americans could face irreparable harm under the government-controlled scheme envisioned by H.R. 3200.
- Increases Taxes While Reducing Benefits. Democrats attempt to “pay for” their proposal with a massive tax on small businesses, mandated taxes on individuals and employers, and cuts to existing programs like Medicare. The Democrats’ tax on the wealthiest Americans (translation: many small business owners barely scraping by) would generate approximately half a trillion dollars over 10 years.
- Drives Up the Cost of Health Care. Individuals and employers who retain private health care coverage will face huge cost increases as the new government-run insurance plan underpays physicians and forces costs to be passed along to the private market – exactly what happens today in existing government programs like Medicare and Medicaid. This will make private health coverage even more expensive for workers and their families.
- Destroys Jobs. A national mandate on small businesses to provide health care would eliminate 1.6 million jobs over a five-year period, according to a study by the National Federation of Independent Business Research Foundation. Two out of three of those jobs would be shed from small businesses. Other studies have painted an even more troubling picture; using a model developed by Council of Economic Advisors Chair Christina Romer, it is estimated that some 4.7 million jobs could be lost as a result of taxes on businesses that cannot afford to provide health insurance coverage.
- Increases the Federal Deficit. Recent estimates from the Congressional Budget Office indicate that the Democrat bill will increase the federal deficit by $239 billion by 2019. Even more troubling is the impact after 2019; CBO states: “Relative to current law, the proposal would probably generate substantial increases in federal budget deficits during the decade beyond the 10-year budget window.” Using CBO projections, the Democrats’ bill could add an additional $1.2 trillion to the federal deficit between 2020 and 2029, since costs will grow more rapidly than revenues.
- Forces Americans Out of Current Coverage – Even Coverage They Like. A study of the House Democrat plan by the independent Lewin Group predicts that 88 million Americans would be forced out of their current private health coverage. Simply put, the existence of a government-run insurance plan will draw millions of people away from private insurance coverage. That’s why Democrats create the government plan; otherwise, it has no reason to exist.
The American People Deserve Better
Republicans are committed to health care reform. Health care costs too much, and too many Americans don’t have access to the coverage or care they need. Republicans believe we need a health care reform plan that will make health care more affordable, reduce the number of uninsured Americans, and increase quality at a price our country can afford.
- Earlier this year, the GOP Health Care Solutions Group unveiled a plan that aims to:
- Make quality health care coverage affordable and accessible for every American, regardless of pre-existing health conditions.
- Protect Americans from being forced into a new government-run health care plan that would eliminate the health care coverage that more than 100 million Americans currently receive through their job.
- Let Americans who like their health care coverage keep it, and give all Americans the freedom to choose the health plan that best meets their needs.
- Ensure that medical decisions are made by patients and their doctors, not government bureaucrats.
- Improve Americans’ lives through effective prevention, wellness, and disease management programs, while developing new treatments and cures for life-threatening diseases.
- Republicans believe that Americans who like their current coverage should be able to keep it – and unlike Democrats, Republicans are fighting to make sure that happens. We also believe bureaucrats should never come between patients and their doctors.
Republicans are committed to commonsense, bipartisan solutions that will bring down health care costs by fixing what’s broken in our health care system while preserving what works. For more information on Republican concerns about H.R. 3200 and specific GOP proposals to make health care more affordable and accessible, visit http://healthcare.gopleader.gov/.
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