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Education & Labor Committee Republicans

Contact: Press Office (202) 226-9440
Kline Statement: “Ways to Reduce the Cost of Health Insurance for Employers, Employees and their Families”

Good morning, and welcome to our distinguished panel of witnesses. We look forward to hearing your perspectives and gaining the benefit of your expertise on issues of great national importance. 

This morning’s hearing is the second hearing on health care reform this year, and will try to address a very broad range of issues confronting our nation’s health care system. While I am hopeful that meaningful changes can be made to improve health care cost, access and delivery, I am concerned that some of the proposals being considered and talked about may have the exact opposite effect.  

We have learned from prior hearings that the employer-based health care system, though imperfect, has achieved a number of successes. Over 160 million Americans obtain insurance coverage from their employers, satisfaction levels are relatively high, and the number of people covered under this system has remained more or less constant through good and bad economic times.   The main reason for this success is the federal ERISA law, which lets American businesses provide uniform, high quality benefits to all their employees across state lines, free from costly state benefit mandates. 

Employers, employees, and their families are, justifiably, very concerned about rising health care costs. I continue to believe that as we try to address weaknesses in the current system, we must be careful not to undermine ERISA by pulling one string at a time. 

As we discuss ways to reduce the cost of health insurance for employers, we must be mindful of the fact that ERISA is the basis of our voluntary employer-based system, and we must build on what works within that structure. Policies to permit greater pooling of resources to purchase insurance and the development of innovative, cost-efficient benefit designs would expand access by encouraging more employers to provide coverage and reduce costs. 

Some of the ideas to reform insurance systems being discussed could have the effect of driving people out of the voluntary, private employer-based health care system, make them more reliant on government programs and subsidies, and could ultimately lead to the nationalization of health care in America. I believe this could increase costs, stifle medical innovation, and reduce health care quality. 

Mr. Chairman, we must be mindful that proposals which undermine ERISA should not be adopted. These include employer mandates, which would require employers to provide coverage or pay a tax. Similarly, adding benefit mandates increases the costs of coverage, and makes it more difficult to provide health insurance. Also, creating a “government plan”, modeled on Medicare or some other government structure, to “compete” with private coverage could result in unfair competition and eliminate a private health insurance market. 

Finally, Mr. Chairman, the cost of health reform and expanding access to health insurance coverage must be carefully considered before we vote to enact health care reform legislation. Merely passing legislation that expands access to benefits, without meaningful steps to control underlying health care costs, would not be wise, and will only lead to more unsustainable spending.     

That said, I remain hopeful we can continue to work together to reach consensus on legislation to provide more affordable and efficient ways of delivering health care benefits.      

With that, I’d like to welcome our seven distinguished witnesses today, and we should hear from them directly. I yield back my time.      

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