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Education & Labor Committee Republicans

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ObamaCare Standing in the Way of Lower Health Care Costs and Job Creation

The Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), today held a hearing entitled, “Barriers to Lower Health Care Costs for Workers and Employers.” The hearing examined changes enacted under the 2010 health care law that are undermining policies designed to make health insurance more affordable.

“Many employers have found consumer-directed health care as one way to better manage costs on behalf of workers,” said Rep. Roe. “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. 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.”

Despite the growing demand for consumer-directed health care, changes adopted under the 2010 health care law have made it more difficult for employers and workers to participate in these plans. According to Roy Ramthun, president of HSA Consulting Services, “There is no disputing the fact that the number of employers offering group health plan coverage to their employees has declined as the cost of providing coverage has increased. It is my opinion that account-based health plans have helped arrest this decline… As employers wrestle with the decisions whether or not to continue sponsoring health insurance benefits, I am uncertain that even account-based health plans can overcome the new employer responsibilities and costs of complying with the Patient Protection and Affordable Care Act.”

Because employers have fewer options to control health care costs, many will be forced to make difficult decisions. Red Robin restaurants employ 24,000 workers across 460 locations. William Streitberger, head of human resources for Red Robin, described the choices the popular restaurant chain and job creator faces, stating, “Increasing health care costs through mandates that can negatively impact the ability of companies to offer attractive benefits to employees forces companies like Red Robin to decide either to reduce benefits and maintain affordable coverage or accept the burden of increased company contributions – limiting our ability to grow the business, attract talented people to our organization and add to our payrolls.”

Edward Fensholt, senior vice president of Lockton Companies health care consulting firm, echoed those concerns. Speaking of the thousands of employers Lockton represents, Fensholt said, “A full 80 percent of our clients said… that they were ‘concerned’ or ‘very concerned’ about the additional administrative complexity created by the [health care law]. They tell us the additional costs, complexity and uncertainty wrought by the [law] affect their ability to hire additional workers, or to retain full-time employees.”

Not only is the health care law making it more difficult for employers to manage costs and create jobs, it is actually forcing the cost of care to rise. As Fensholt noted, “There’s no question the [health care law] has, to this date, bent the health insurance cost curve north, not south. As additional taxes, fees and mandates on employer-based health coverage come on line, we fear the health insurance affordability forecast will continue to deteriorate.”

“Forcing the nation into a costly, government-run health care scheme is perhaps the greatest obstacle to more affordable care,” concluded Rep. Roe. “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.”

To learn more about this hearing, read witness testimony, or watch an archived webcast, visit www.edworkforce.house.gov/hearings.

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