This morning, NAM President and CEO Jay Timmons provided a read on U.S. manufacturing on CNBC’s “Squawk Box” and discussed what manufacturers need to hear from presidential candidates.
On Saturday, a letter to the editor from National Association of Manufacturers (NAM) Vice President of Government Relations Joe Trauger ran in The Washington Post highlighting manufacturers’ concerns with the employee benefits tax, commonly called the “Cadillac tax.” This 40 percent tax on employee benefits is a major issue for manufacturers as rising health care costs remain a top concern.
“The recent ‘Cadillac tax’ editorial missed the mark regarding the so-called virtues of the Affordable Care Act’s tax on employee benefits. To suggest that doing away with on-site clinics, flexible spending accounts and other benefits is good policy and will reduce health-care spending is misguided. Manufacturers have identified health-care expenditures as one of their top business challenges. The ACA has done nothing to mitigate those concerns. Most manufacturers will tell you that coverage is more expensive as a result of the law.”
Last week, the NAM released a new study looking at this costly tax. NAM’s SVP of Communications Erin Streeter and SVP of Policy and Government Affairs Aric Newhouse discussed the impacts of the tax in our ShopTalk video series and the action congress is debating to provide relief. As soon as this week, Congress could once again be voting on a delay of this costly tax.
This week, the House of Representatives will once again vote on a bill that has little prospect of passage in the Senate and has zero chance of being signed by the President if it were to succeed. By some counts, this is the 37th time Congress will hold a vote to repeal the Patient Protection and Affordable Care Act (ACA). So if everyone agrees that it is likely to fail to become law, why should anyone care?
The NAM did not support the ACA when it was passed by Congress and signed by the President three years ago. Generally, implementation of the law over the past three years has been disappointing. As we reach the mid-point of 2013, the implementation process has become downright alarming, which is no doubt a factor behind the vote the House of Representatives will take on Thursday to repeal the ACA.
In less than five months, beginning on October 1, 2013, Americans are supposed to have access to health insurance through state exchanges that meet the criteria set out by the ACA. Some states are setting up their own exchanges and some are just letting the federal government do it, but that’s not really the issue that’s sounding alarms and feeding anxieties among consumers and businesses alike.
With less than five months before this program goes live, there is a lot we don’t know:
– What products are available?
– What are the prices for those products?
– How do consumers get coverage?
– How much will the federal subsidies cover?
– How do we compare plans offered?
– Who do I call with questions?
– What is the impact on employer-sponsored coverage?
We don’t seem to be getting very many answers from the department in charge of putting this thing together- unless you consider planning a major public relations campaign an acceptable strategy for implementation. Most people don’t have confidence a public relations campaign will do the trick.
Ultimately, that’s the meaning of the vote being taken by the House of Representatives on Thursday – it is a vote of no-confidence. It is a firm and unambiguous statement of position on a major revision of federal law that will be confronting us not only in the months ahead, but also for many years to come. That is why the NAM supports a piece of legislation that has failed 37 times – and why everyone else should be paying close attention too.
Joe Trauger is vice president of human resources policy, National Association of Manufacturers.
On August 27th, the National Labor Relations Board (NLRB) issued a decision in a case known as “Specialty Healthcare.” The specifics of the case relate to whether certain healthcare providers can exclude other similarly situated providers when forming a collective bargaining unit. The NAM has been concerned from the outset that the case would effectively eviscerate what has been known as the “community of interest doctrine.” So, why should employers care?
The reason the community of interest doctrine is important is without it, the NLRB is paving the way for what’s known as micro-unions. Micro-unions are unions with as few as two people forming a unit for collective bargaining. Imagine a restaurant where dishwashers, prep-cooks, fry-cooks, grill-cooks, wait staff, and bartenders all form their own collective bargaining units and are represented by different unions. Specialty Healthcare essentially allows such a hypothetical to materialize. How long would this restaurant be able to function and stay in business?
The public and business community were told the Specialty Healthcare decision wasn’t a big deal so we shouldn’t worry about it. Nothing to see here, they said.
On October 19th, the NLRB ruled on its first case invoking the new precedent created by the Specialty decision. The case, First Aviation Services, involves a company of 110 employees in which a group of 34 were allowed to form their own bargaining unit despite sharing a community of interest with all but two of the other workers in the same facility. The NLRB promptly denied the employer’s attempt to appeal the ruling of the regional director. The regional director used Specialty Healthcare as its rationale for granting the employee’s request to organize a unit of 34 employees and the full Board denied the employer’s request to review the regional director’s reasoning. While the decision is only two months old, it has already provided the road map for organizers to divide and conquer. The decision is clearly going to have far-reaching implications for decades unless it is over-turned.
The National Association of Manufacturers has signed on with a letter to Congress from members of Health Choices Coalition, urging legislators to overturn the ban on use of employees’ Flexible Spending Accounts for over-the-counter drugs. OTC drugs are effective and FSAs are effective, providing an important measure of consumer control over health-care spending, yet last year’s health care law limited the accounts.
The Consumer Healthcare Products Association issued a release on the issue earlier this week. Excerpt:
“This issue is about empowering millions of American consumers to cost-effectively manage their families’ healthcare needs,” said CHPA Vice President of Government Affairs Bill Head. “The availability of OTC medicines through an employer-sponsored FSA provides valuable cost-savings to consumers, increases worker productivity, and encourages smart healthcare decisions by both employers and employees — all of which are consistent with the goals of healthcare reform.”
Prior to January, OTC medicines were eligible for reimbursement under FSAs and other tax-preferred savings accounts. An estimated 19 million working American families purchased these cost-effective medications through their FSAs. Read More
The House Energy and Commerce Committee this morning is marking up H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011, legislation to control the unnecessary or excessive litigation costs that afflict health care in the United States. (Committee video. Hearing started at 10:41 a.m.)
In a timely and important contribution to the debate, the American Tort Reform Association has released a new paper,”The Constitutional Foundation for Federal Medical liability Reform.” In a news release, ATRA explained:
The ATRA paper, The Constitutional Foundation for Federal Medical liability Reform, addresses in some detail questions recently raised about whether provisions of H.R. 5 are consistent with the Commerce Clause, the Tenth Amendment, the guarantees of equal protection and due process, and the right to a jury trial.
“Citing more than 100 years’ worth of Supreme Court precedent, the consistent rejection of federal constitutional challenges to state medical liability reforms, and the opinion of the Congressional Research Service itself,” Joyce said, “our paper puts an end to any serious concern or question about the constitutionality of federal medical liability reform.
“With respect to perhaps the most important question about whether the Commerce Clause gives Congress sufficient authority to promulgate medical liability reform for the nation as a whole, it’s not even a close call. Congress has that authority.
Author of the paper is Mark A. Behrens of Shook, Hardy & Bacon L.L.P., a man who knows his civil liability issues. The National Association of Manufacturers has worked with Behrens and the law firm on numerous occasions over product liability litigation and related issues.
UPDATE (10:45 a.m.): Very timely report. Rep. Tammy Baldwin (D-WI) is making a “states rights” argument against the bill, proposing an amendment. She’s always been such a strong advocate for federalism.
Leaders of the Start Over! Coalition, including the National Association of Manufacturers, wrote Sen. Kay Bailey Hutchison (R-TX) to express support for her amendment (S.Amdt.197) to the pending small business bill, S. 493, that would suspend further implementation of the Patient Protection and Affordable Care Act.
From the letter:
As you know, the constitutionality of the Affordable Care Act (ACA) is now the subject of considerable litigation before the Federal courts. To date, the U.S. District Court for the Eastern District of Virginia, ruling in Virginia v. Sebelius, and the U.S. District Court for the Northern District of Florida, ruling in Florida et al v. U.S. Department of Health and Human Services, have ruled the “individual mandate” in the ACA unconstitutional, and the latter went on to rule that the “individual mandate” is not severable from the rest of the ACA thus voiding the entire statute. Three other Federal district courts in the District of Columbia, Michigan and Virginia have upheld the constitutionality of the ACA. It is a virtual certainty that the constitutional issues in controversy in the ACA will ultimately be resolved by the U.S. Supreme Court.
The timing and outcome of the legal process in this matter is speculative at best. What is currently certain, however, is that the Federal government is continuing to implement the ACA at considerable cost to the taxpayers. If the Northern District of Florida court’s decision is upheld, State governments which have proceeded with implementation facing considerable risks if they do not do so, will have needlessly expended considerable sums of their taxpayers’ money. It is no small matter that employers find themselves similarly and expensively caught between a judicial ruling that invalidates the ACA and an Administration in Washington, DC that insists on plowing ahead with implementation as though this matter had never arisen.
Under the present circumstances we believe it is simply prudent to impose a moratorium on further implementation of the ACA until such time as the pending litigation is brought to its conclusion. This is exactly what the Hutchison Amendment would accomplish.
Earlier Shopfloor posts on Start Over!
The most puzzling of all the decisions that went into the legislative maneuvering that gave us the benighted Patient Protection and Affordable Care Act a year ago today was, why no acronym-inviting title? You would have thought if Congress was going to so dramatically expand the federal government’s control of health care and insurance, it would embrace a grandiose, if forced, title that would give us an acronym for the ages.
You know, like the PATRIOT Act, or RICO, or last year’s SPEECH Act (Securing the Protection of our Enduring and Established Constitutional Heritage Act). Give the law a name to remember it by.
No such luck. Democrats and other supporters usually drop the “Patient Protection” part to refer to the law as simply by the anodyne Affordable Care Act. Republicans deride it as Obamacare.
Such a missed opportunity for truth in acronymization. Is it too late? If not …
- The HEALTH Act — Helping Eliminate Affordable, Life-extending Treatments, Hospitalization Act
- The NANNY Act — The Not Affordable, Nope, Not Yet Act
- ABCDE Act — A Bill that Cost Democrats Election Act
Oh well. Some good commentary as the anniversary festivities subside…
- Sen. Ron Johnson (R-WI), a manufacturer, Wall Street Journal, “ObamaCare and Carey’s Heart: My daughter probably wouldn’t have survived in a system where bureaucrats stifle innovation and ration care.”
- Heritage Foundation, The Foundry blog, “Obamacare’s Failed First Year“
- Dr. Jason Fodeman and Dr. David Gratzer, The Washington Times, “Obamacare: One year later –Stripping patients and doctors of authority over care“
- Joe Trauger, National Association of Manufacturers, Shopfloor blog, “Health Care Law at One Year: Little Protection, Not So Affordable”
- Editorial, Washington Examiner, “Obamacare is even worse than critics thought“
One year ago today, President Obama signed the Patient Protection and Affordable Care Act (PPACA), the great federal restructuring of U.S. health care. The law’s value in protecting patients is suspect, and it’s doing little to make health care affordable. So, after a year of implementation what has been the real effect?
We know that the promise of being able to keep our health plan if we like it was an empty one, and even the Administration’s own actuary admits this fact. When asked during a hearing in the House Budget Committee whether the health care law really allows people to keep the plans they like, Rick Foster stated that claim was “not true in all cases.”
We also know the bulk of the funding for the new entitlement program is based on fuzzy math at best and outright deception at worst. In a stunning admission before the House Energy and Commerce Committee, the Secretary of Health and Human Services admitted the Administration is counting reductions in Medicare spending as a credit to extending the solvency of the program while also using the same funds to “pay for” a large portion of the expected costs of PPACA. This double-counting allowed the Administration to claim the legislation would save the nation more than $100 billion over the next 10 years — a statement with as much veracity as the promise our health plans wouldn’t change.
As the law enters its second year of implementation, the National Association of Manufacturers will be watching several issues sure to emerge in 2011: the essential benefits package and accountable care organizations (ACO). The essential benefits package defines for all Americans what coverage must purchase in order to avoid penalties under the law. It’s easy to predict how this will turn out: All single men will have to buy a plan that covers pre-natal and post-natal care and all single women will have to have a policy that covers prostate cancer. This is not to say these aren’t important things to cover, but the inequity is clear.
What’s also clear is how the process of determining what is an essential benefit will be manipulated by well-meaning interest groups that will gauge their importance and influence on policymakers based on whether their particular disease category is included as an essential benefit. Special-interest coverage is hardly a strategy for controlling health care costs.
While accountable care organizations (ACOs) seem to be an attractive idea in some health care policy circles, there are some (this author included) who believe the consolidation and integration of hospitals and physician practices could do irreparable harm to competition in the marketplace. ACOs may work fine in a single-payer system like Medicare, but it could wreak havoc on negotiations for payment rates and the establishment of networks in a private market which depends on competition in order to arrive at a mutually agreed upon price for services. In small to medium-sized communities, this consolidation could lead to oligopolies or monopolies in health care services. Such an outcome would raise prices and make care less affordable.
Many proponents believed, and continue to believe, Americans will warm to the law once they see all the great things and reap all the rewards of the centralized command-and-control this law will bestow upon us. The results so far leave us cold. Read More
During a hearing before the House Budget Committee on Thursday, February 10, CBO Director Douglas Elmendorf, made a startlingly honest admission – one that may have just changed the entire debate over the Patient Protection and Affordable Care Act (PPACA). In an exchange with Chairman Paul Ryan, Mr. Elmendorf divulged what most objective health policy analysts have been saying all along: PPACA will cost jobs – an estimated 800,000 of them in the next ten years.
Now that the bill is law, and as then Speaker Nancy Pelosi put it, “We can find out what’s in it,” what have we found.
- It will not decrease insurance costs as claimed. In fact, costs are rising.
- It will not be budget neutral as claimed. Double counting phantom savings doesn’t add up.
- It will not allow us to keep our plans if we like them as claimed.
- It increases taxes on all Americans.
- It will end up costing 800,000 Americans their jobs.
At the time, we were told we could not afford to miss the opportunity to pass healthcare reform and that our country and the economy could not afford the status quo. The NAM supports reforming healthcare, but this law misses the mark and places our healthcare system on an unsound foundation. That’s why the Manufacturers and many other associations supported repealing this law – America can’t afford not to.
Joe Trauger is the NAM vice president for human resources policy