WASHINGTON, D.C. | May 31, 2012
With 160 million Americans acquiring health insurance through an employer-sponsored plan, job creators clearly play a critical role in the nation’s health care system. As a result, employers know all too well the difficult challenge of expanding access to affordable health care.
To help control the cost of offering insurance, employers have traditionally maintained a great deal of flexibility over the design of the health care benefits they provide. This has led to some tough decisions, especially during times when a business is struggling to make ends meet. However, preserving an employer’s ability to navigate a complex health care market, even during an uncertain economic environment, has served us well for decades.
Many employers have found consumer-directed health care as one way to better manage costs on behalf of workers. One particularly popular choice is to pair a high deductible health plan with a health savings account. This allows individuals to guard against the cost of catastrophic medical treatment while also setting aside a portion of their pretax income to pay for future medical expenses.
Demand for consumer-directed health plans is on the rise. For example, America’s Health Insurance Plans reports an estimated 13.5 million individuals had a health savings account last January, compared to just 3.2 million in 2006. The popularity of health reimbursement accounts and flexible spending accounts among workers is also growing, and employers have shown their support as well. According to the Kaiser Family Foundation, nearly 70 percent of employees with a workplace-sponsored health savings account received employer contributions.
Consumer-directed health plans offer commonsense options to help millions of individuals secure a benefit plan that meets their health care needs at an affordable price. Unfortunately, recent policy changes threaten the success of these important plans.
President Obama’s 2010 health care law placed an arbitrary cap on contributions to flexible spending accounts, severely limiting the annual amount workers are allowed to save. The law also prohibited the use of flexible spending accounts and health savings accounts when purchasing over-the-counter medications, forcing individuals to spend more time and money visiting their doctor to obtain prescriptions.
Additionally, a bulletin released by the administration suggests government bureaucrats are crafting an unusual accounting scheme that will severely undervalue the contribution workers and employers make to a health savings account, which may actually discourage employers from offering this benefit in the future.
I am pleased the Ways and Means Committee is considering legislation today that will help roll back a number of these harmful policies, reflecting a commitment by this Congress to dismantle the job-destroying health care law. However, even though more than 12,000 pages of rules and regulations have been written, there are still many unanswered questions surrounding the law that make it virtually impossible for any employer – large or small – to plan for the future.
We still don’t know how the administration will ultimately define an "essential health benefit." Up to now, the administration has operated in the regulatory shadows and outside the formal rulemaking process, delivering uncertainty instead of the facts on its regulatory proposal.
We still don’t know why the administration chose not to fulfill the intent of the law’s grandfather provision, choosing instead to raise regulatory roadblocks that will significantly alter the health care of millions of Americans.
And we don’t know what small businesses will do now that a highly touted tax credit has proven to be a failure. A Government Accountability Office study reveals the small business tax credit has helped few employers, thanks in part to its costly administrative burden. As the Associated Press reports, the tax credit “has turned out to be a disappointment.”
Forcing the nation into a costly, government-run health care scheme is perhaps the greatest obstacle to more affordable care. The American people deserve every opportunity to pursue new initiatives that will lower health care costs. We should empower individuals and employers to create a health care plan that best fits the needs of their families and workplaces. Unfortunately, the 2010 health care law stands in their way.
As members of Congress, we have a responsibility to examine federal policies and hear directly from those who live with the consequences. I am pleased we have a number of employers who will share their thoughts on health care costs, as well as various experts to help inform the subcommittee of the technical aspects of the policies we will address today. I look forward to our discussion.
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