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Health Care Reform:

Health Insurance & Affordable Care Act

Rising Costs Threaten the Future of This Traditional Employee Benefit

Is Workplace Health Coverage Dying?

Individual Solution?

A law enacted recently in Massachusetts treats health coverage more or less like car insurance. That is, all individuals are required to have it.

The plan is a complicated mix of employer subsidies and individual tax breaks for spreading insurance costs that may not work in every state. But Todd McCracken, president of the National Small Business Association, likes the idea.

He says requiring individuals to carry a basic level of insurance would give businesses the flexibility to offer more complete coverage as a way to attract workers. Businesses could woo younger and healthier workers who don't need as much coverage by offering more cash instead.

"I think the small business community has really had it with the health care system," he says.

Basic Coverage Only?

But some big businesses are not ready to give up yet on health insurance. John Matthews, chief of benefits for Costco, says companies can save by shifting their coverage to basic health care, where it's really needed.

Rising costs recently led the company to shrink the amount it contributes to workers' coverage. Costco employees now pay 10% of their total health costs, while the company picks up the rest. But 87% of all employees are covered, and the company focuses on prevention, says Matthews.

"We think it's sustainable, and we think it can be a force."

Matthews thinks the erosion of workplace insurance could be stopped if employers focused more on lower-cost, basic coverage.

"Mandate that every employer provide primary care for every employee and all of their kids," he says.

The so-called employer mandate was tried once before -- in 1993, by President Bill Clinton and Sen. Hillary Rodham Clinton, D-N.Y., then the first lady. Politicians of both parties rebelled and nothing got done. Sen. Clinton has since disavowed the attempted overhaul as naïve.

The analysts who spoke Friday agreed that the 2008 presidential election will be a critical time for candidates to focus the country on the struggling health system, and what to do about it.

"Let's just stop studying the problem and think about the politics," says Stern.

Latest Health Reform News

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