skip to navigation

Education & Labor Committee Republicans

Contact: Press Office (202) 226-9440
Roe Statement: Hearing on "Regulations, Costs, and Uncertainty in Employer Provided Health Care"
As prepared for delivery.

It was stated time and again: “If you like your current [health care] plan, you will be able to keep it. Let me repeat that. If you like your plan, you will be able to keep it.” Those remarks were delivered by President Obama and similar sentiments were expressed during the many months of Congress’ effort to reform health care. The promise was made to a public concerned about the changes a government takeover of health care would impose on their businesses and families.

And it turns out, there was reason for concern. Rules released from the Obama Administration contradict that statement.  The health care law allows Americans to keep their health care coverage – so long as their health care plan doesn’t make any significant changes.  The reality is, health care plans constantly change out of necessity, and now when they change, Americans will be at risk of losing their existing health care plan – like it or not. 

As I have learned through many years of practicing medicine, health care is an extremely personal matter. Though most people recognize the important role employer play in the delivery of health care, they prefer to keep the details between themselves and their doctors. The idea of the federal government intervening in the relationship between a patient and his or her health care provider is downright terrifying to many individuals.

Perhaps that is why the president promised so adamantly that reform would not disrupt the health care millions of Americans rely upon and wish to keep. The linchpin of this promise was an exemption or “grandfather” provision in the law. This was intended to provide relief from new rules and regulations for insurance plans in effect the day the president signed his bill into law.

Unfortunately, in just three months, the administration defined the terms of the grandfather provision so narrowly that it became meaningless. By the administration’s own estimates, up to 80 percent of small-employer plans and between 34 to 64 percent of large-employer plans will not retain their grandfathered status, meaning millions of workers face significant changes to their health care. Employers have confirmed this startling fact. In a May 2011 survey by Price Waterhouse Coopers, 51 percent of the employers surveyed did not expect their plans would keep their grandfathered status.

Each year, as employers grapple with the constraints brought on by unsustainable health care costs, they must choose from a range of difficult options, including reduced benefits and lower wages. The ability to adjust and manage the benefit plans of their workers has offered employers an opportunity to minimize disruption and modify care to best meet the needs of the workplace.

That flexibility is severely undermined by the new law and its flawed grandfather regulation. Today, even a modest change can trigger a loss of a benefit plan’s exempted status. Employers are faced with an impossible decision: pay more to keep their current coverage, buy higher-cost insurance that is subject to the law’s new mandates, or drop coverage entirely.

As is often the case, good intentions can lead to bad consequences. This is certainly true for much of the law’s complex scheme of rules, mandates, and price controls. Take, for example, the Medical Loss Ratio provision, which was designed to limit the corporate profits of insurance companies to ensure consumers received the most value for every dollar they spend. However, the regulation implementing this provision actually creates a disincentive for insurance providers to attack waste and abuse, leading to higher premiums and copayments for American consumers.

If these regulatory challenges weren’t creating enough uncertainty for our workforce, employers and workers continue to confront higher health insurance costs. Despite the president’s promise that his reform plan would lower premiums by up to $2,500 for the average family, the facts reflect a different reality. A recent study by the Kaiser Family Foundation reports that premiums increased by 9 percent this year. A separate study estimates employer health care costs will increase by 8.5 percent next year. Democrats in Washington got their government-run health care, and the American people are left with broken promises.

It is clear our system of employer-provided health care is experiencing dramatic changes due in large part to a deeply flawed health care law. Today’s hearing provides members of the subcommittee an important opportunity to examine these changes, their impact on workers and employers, and to discuss the solutions our nation needs to chart a better course.

# # #

  • starE-NEWS SIGN-UP

Sign up to receive the committee’s
e-newsletter, the Weekly Wrap-Up.

back on top