Representative Todd Tiahrt - 4th Congressional District of Kansas

| Health Care Security |

Health care costs are skyrocketing. Employers, particularly small businesses, want to provide health care insurance to their workers in order to attract the best and the brightest to their business. We are proposing innovative strategies that will stabilize health care costs and give all employers the ability to afford this critical benefit.

The cost of health care has skyrocketed over the past decade.

Advanced medical technology and therapy, increased use of prescription drugs, inadequate cost containment, and out of control liability costs have led to substantial price increases.

The Kansas Hospital Association estimates that every hour of care requires an hour of paperwork. That is absurd and unproductive.

Escalating jury awards and the high cost of defending against frivolous lawsuits, have caused medical liability insurance premiums to reach unprecedented levels. Thus, a growing number of physicians can no longer afford or even find liability insurance. Access to care is now seriously threatened in 12 states, with 30 other states nearing crisis conditions.

Employers are taking the biggest hit

With little in the way of cost containment, employers are forced to pay the increased costs in insurance premiums.

Employers big and small are struggling to keep up with the annual rise in health benefits. For six consecutive years, employers experienced double-digit increases for employee health care.

Without good health care benefits, businesses suffer because of difficulties in recruitment and retention of employees. They want the best workers, and those workers want health coverage for themselves and their families. Consider these facts:

90% of Americans under the age of 65 currently obtain their health insurance through their employer.
Businesses typically pay 84% of single coverage policies and 73% of family coverage policies.

We already have more than 40 million uninsured in this country due to the staggering cost of insurance. If we don't help businesses afford health coverage, this number will continue to rise.

Competitiveness

In addition to the problem of adding to the number of uninsured and with employers losing workers due to inability to provide coverage, health care costs are making American companies uncompetitive in the global market.

While I certainly do not advocate socialized medicine, the fact of the matter is that most foreign nations provide health coverage through the government. This is a huge cost their companies do not have to worry about.

The National Association of Manufacturers has calculated that benefit costs put American companies at a 5.5 percent disadvantage compared to our nine largest trading partners.

Not only does the United States spend the most on health care annually, but at 7.7 percent of GDP, our private sector contribution to health care coverage far exceeds that of their foreign competitors.

America is blessed with the best health care system in the world. However, we must keep working to make it available and affordable for everyone.

While improving access, we will ensure that quality of care does not diminish.

Here are some innovative ways to help employers get a handle on health care costs:

• Association Health Plans

One of the most important ways to help small businesses--who employ the majority of Americans--is by giving them purchasing power. A more consumer-oriented health care system is one that will drive down costs and free people from being held hostage to a lack of health care choices.

Associated Health Plans (AHPs) allow small businesses to pool together and therefore spread the insurance risk over a large number of people with the result that the younger and healthier policyholders share in the costs for the older and sicker policyholders.

Furthermore, with larger pools, small businesses will have a greater leveraging power when negotiating prices with insurance companies. This translates into less administrative costs for companies, and lower premiums for employees.

When small businesses pool together within AHPs, they override costly state regulations, and will be regulated within the less burdensome federal ERISA regulations.

One proposal in Congress modifies the traditional AHP to an open model, allowing people to obtain health care from sources other than their employer. People could buy their health care from faith-based groups or civic and community organizations. Often when people leave jobs they are forced to change their health care. This plan would bring portability, as well as more consumer control over their health care products. It would also allow those to receive care from organizations that reflect their moral and religious beliefs.

• Flexible Savings Accounts

Empowering workers to make their own health care choices is the first step on the road towards lowering health care costs.

Allowing employees to save for uncovered health expenses tax free will provide increased flexibility. One House proposal allows workers to direct their employers to deduct money from their paychecks to be placed in Flexible Savings Accounts (FSAs), tax-free, to pay for health care expenses they may incur during the year.

Employers should not be restricted based upon the size of their business. Whether or not they offer FSAs should be their choice, interpreted so that employees are only restricted by whether or not their employers offer the option.

There should be no health insurance requirements for a worker to open up an FSA. Additionally, there should be no minimum or maximum contribution limits, except as established by the employer.

By reducing the burden employers suffer due to health care costs, our companies will be much more competitive in the global market.