WASHINGTON, D.C. | March 10, 2011
Good morning everyone. I want to thank our witnesses for being with us today and for sharing their thoughts and experience on this important subject.
The steady rise in cost is a critical challenge facing our nation’s health care system. For many patients, the price of health care is the determining factor when deciding whether to receive the care he or she needs. It also imposes a tremendous burden on taxpayers, as government health services become more and more expensive. As a parent, physician, and elected official, hardly a day goes by when I am not reminded of this difficult reality.
Employers, however, understand better than most the tough choices workers and their families face as health care costs go up year after year. In 1974, the Employee Retirement and Income Security Act, commonly referred to as ERISA, became law. It provides the rules of the road for benefit plans offered by employers, including employer-provided health care. Employer-provided health care is now as common to employee compensation as wages, paid vacation, and sick leave.
Roughly 170 million individuals receive health insurance through an employer-provided health care plan. It has become central to our nation’s health care system. While not perfect, it has served employers and employees well for nearly forty years. Any changes to the nation’s health care system will affect the lives of millions of employers, workers, and families.
That is why the challenge of rising costs is a pressing national concern. A3n aging workforce, more advanced therapies, higher utilization of services, and fewer providers are just some of the factors contributing to the increases. As policy makers, we have a responsibility to understand the underlying causes of these factors and to consider commonsense solutions that ultimately reduce expenses for workers and their families.
President Obama understood this responsibility when, as a candidate for the presidency, he outlined a plan he promised would “reduce costs for families and businesses.” Without providing specific details for businesses, then-Senator Obama promised his health care plan would “lower premiums by as much as $2,500 per family.” As President, Mr. Obama claimed that, under his plan, “if you like your current health care, you can keep it.”
Unfortunately, we now know these assertions to be untrue. Along the path to health care reform, the president and his Democrat allies abandoned any effort to reduce costs and instead focused on expanding access through the creation of a new government entitlement program; a program that will surely change how workers receive their health care, regardless of whether they like it or not. This has left this issue of rising costs unresolved as the need for meaningful reform grows more urgent.
There are a number of provisions in the recent health care law that not only fail to address rising costs, but actually exacerbate the problems facing employers and their workers. For the first time in our nation’s history, we have a mandate requiring certain employers provide government-approved insurance or pay a fine.
However, providing government-approved health care will grow more and more expensive as benefit plans begin to comply with a number of additional mandates and requirements controlled by Washington bureaucrats. Existing employer plans were supposed to be “grandfathered” from the new law’s requirements, but we’ve since learned this will not be the case for up to 69 percent of plans, including up to 80 percent of smaller plans.
We all want to see individuals with pre-existing conditions get the care they need and young adults receive extended help from their parents if they so desire. But a sea of government mandates will not lead to lower costs and better health care. A number of independent health care researchers have examined the issue and determined costs will continue to increase at a rapid pace due in part to ObamaCare.
That is why we are here today. We must examine these and other driving forces behind rising health care costs, their affects on employers and workers, and begin to consider responsible solutions that address the needs of the nation.
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