Press Releases

The House Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe, M.D. (R-TN), today held a hearing entitled, “Regulations, Costs, and Uncertainty in Employer Provided Health Care.” The hearing examined health care changes affecting workers and employers, including rising costs and regulations.

“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,” said Chairman Roe. “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.”

Countless employers must now confront the consequences of this restrictive regulation. Gracie-Marie Turner, president on the non-profit Galen Institute, described what’s at stake for the nation’s job-creators.

”Employers work very hard to find the balance in keeping the cost of health insurance as low as possible while offering the benefits that employees want and need,” testified Turner. “Part of the way they are able to do this is by seeking bids from competing insurers and amending and adjusting benefit structures. But under the grandfathering rules, employers are very limited in their ability to adjust current benefits without losing their grandfathered status. This also means they are limited in what they can do to help keep costs down.”

As a result of this regulatory action, millions of Americans now face significant changes to their health care plan. Robyn Piper, who counsels employers on employee benefits, explained, “All of our large employers have now made the difficult decision to lose grandfathered status in exchange for protecting the plan itself and making appropriate and necessary plan changes.” Piper continued, “Employees have been well-advised that loss of grandfathering means that the plan they are being offered either significantly reduces their benefits or increases their out-of-pocket spending above what it was when PPACA was enacted.”

In this tough economy, reduced benefits and higher costs are the last thing employer and workers need. Unfortunately, the health care law’s rules and regulations are causing both. ObamaCare’s Medical Loss Ratio (MLR) provision, which was intended to protect consumers from the profits of insurance providers, is yet another example of the law’s negative consequences. As Dennis Donahue testified, rules like the MLR can lead to “lower quality and less tailored health care for employees, and potentially severe compliance problems and costs for employers that are left to navigate the system without the assistance they need.”

Turner added, “It is in the interest of both employers and employees to keep health costs down, and the MLR and grandfathering regulations issued by HHS are just two examples of rules that are restricting their ability to do that. Health costs and jobs are at stake.”

“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,” concluded Chairman Roe. “Today’s hearing is 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.”

 

# # #