WASHINGTON, D.C. | February 26, 2014
Rising health care costs remains a significant challenge for workers and job creators nationwide. According to a survey released by the National Small Business Association, 91 percent of employers reported higher costs at their most recent health insurance renewal; one in four experienced cost increases of 20 percent or more. In a report released last Friday, the nonpartisan actuaries at the Centers for Medicare and Medicaid Services estimate roughly two-thirds of small businesses will face higher insurance premiums as a result of the president’s health care law.
Promoting policies that will lead to affordable health coverage is more urgent than ever. Today we will examine how self-insured plans help provide quality health care to millions of Americans at a more reasonable cost, and discuss why we should reject any effort that undermines this important health insurance option.
Employers who manage a self-insured health plan bear the financial risk of providing health benefits to workers. Employers will often work with a third-party to process claims and benefit payments. Many self-insured employers also purchase a product known as stop loss insurance, a risk management tool that protects employers against catastrophic claims and high costs.
We have with us today a panel of witnesses who possess a wealth of knowledge, expertise, and experience in this area. They will explain in greater technical detail how the self-insured marketplace works. However, it is worth noting just how vitally important this health insurance option has become.
Approximately 60 percent of all individuals covered by employer-sponsored health insurance are in a self-insured plan. Even unions are embracing the benefits of this approach; a majority of Taft-Hartley health plans are self-insured. Support for self-insurance has grown because it can be tailored to the needs of the workforce and offers transparency to ensure the plan is managed in an efficient and effective way. Just as important, self-insurance helps control health care costs, which can lead to higher wages for workers and more resources for employers to invest in job creation.
Across the country, we’re witnessing what happens when the federal government tries to force millions of individuals into a one-size-fits-all health care plan: costs go up, wages go down, and workers lose the coverage they like and the full-time jobs they need. Self-insurance is a legitimate option for workers and employers who cannot afford this government-run health care scheme. Perhaps that explains why some want to clamp down on the use of self-insured health care plans.
In February 2013 the New York Times
reported Obama administration officials were “considering regulations to discourage small and midsize employers” from using stop-loss insurance, thereby undermining the ability to self-insure. This press report contradicted an earlier statement by Phyllis Borzi, Assistant Secretary for Employee Benefits Security at the Department of Labor, who vowed the administration was “not secretly writing a stop-loss regulation.”
For months the committee has sought clarification, but as usual the administration is being less than forthcoming. The administration must clarify its plans to potentially regulate in this area, and explain the legal basis it has to do so. No more Friday news dumps, midnight regulations, or holiday surprises. The employers, workers, unions, and families who rely on these health plans deserve the truth now. Like every American, they were told if they liked their current health care plan they could keep it; they have a right to know whether they too will be on the losing end of the president’s broken promise. Let’s work together to make health care more affordable, instead of raising costs with more heavy-handed rules and bureaucratic overreach.
Before I conclude, I would like to take a moment to acknowledge the resignation of our friend and former colleague Rob Andrews. Over the last few years, Rob and I sat side by side on this subcommittee, discussing important issues facing our nation’s families and workplaces, such as health care, labor relations, and retirement security. We had our disagreements, but we always shared a desire to advance the best interests of workers, employers, and retirees.
There are a number of challenges that merit our attention, and the issue before us today is no exception. We have to ensure federal labor policies are fair and protect the right of workers to join or not join a union. We also have to address the multiemployer pension crisis that grows more severe with each passing day. Rob and I spent many hours together examining the problems facing multiemployer pension plans and discussing possible solutions to protect workers, employers, retirees, and taxpayers. For the sake of those whose jobs and retirement security are at stake, I hope this committee can continue that spirit of bipartisan cooperation in the months ahead.
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