The latest NAM/IndustryWeek Survey of Manufacturers found that rising health insurance costs topped the list of concerns this quarter. The issue was cited by 82.2 percent of respondents, higher than the 74.0 percent level observed in the first quarter survey.

A series of special questions on the Affordable Care Acts drilled further on this topic. Specifically, 99.0 percent of manufacturers surveyed said that they provide health insurance coverage to their workforce, with 38.0 percent of those self-insuring. The average health insurance premium increased 8.6 percent this year, with a whopping 13.9 percent predicted for next year. More than anything, the 2014 numbers suggest just how much uncertainty is out there regarding insurance rates, with the perception out there that they will go up significantly. Just 43.8 percent of manufacturers said that they were prepared to implement the ACA when it goes into effect starting later this year.

Looking at the current economic outlook, 72.3 percent of manufacturers said that they are either somewhat or very positive about their company’s outlook, up from 51.8 percent six months ago and 70.1 percent three months ago. With the exception of the December survey, optimism levels have been roughly 70 percent since September. In essence, this survey confirms the good-but-not-great nature of the current manufacturing economy, much as we have seen in the most recent Institute for Supply Management and employment numbers. Sales are expected to rise 2.7 percent over the course of the next 12 months. While this was higher than the 2.3 percent observed last time, it was still lower than the 4.3 percent observed one year ago. (continue reading…)

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 37^th 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.

The old saying is April showers bring May flowers, but the rain has already started here in Washington when it comes to healthcare regulations being pushed out in 2013. On Friday, the Department of Health and Human Services announced it will release 700 pages of regulations in the next two weeks to implement the Affordable Care Act. I sure hope the healthcare is more affordable than what it costs to print the regulations stemming from the new law, but I guess when a law is nearly 3,000 pages and says “The Secretary shall…” over 1,000 times we should expect that.

The latest reg-dump on Friday covers some important ground on premium-stabilization provisions of the law and they will provide a little more clarity on how much healthcare costs will increase ($65 per policy), but it’s still only part of the overall picture. There are less than seven months before the Affordable Care Act needs to stand on its own and start running. By most estimates, there are at least 10-12 significant rules that have to be worked out before October. This raises an interesting question, what needs to be done? I refer to it as the Regulatory Triple-Lindy, and it has a high degree of difficulty.

In the next 211 days, entirely new data collections and processing systems need to be up and online in order to determine who is eligible for what program and when. Insurers need to know whether their products will pass new federal rules, what their prices are going to be, make contracts with providers and decide which markets to enter sometime before October in order to give employers time to do what they need to do. Small employers need to know what their coverage options cost, what kind of choices they have available to them and how the SHOP exchanges will work before October 1. The public needs to be educated about their options, understand those new products, compare plan options, and choose a plan before January 1 or pay a fine.  All of these things need to fit together seamlessly in order for this to work.

The NAM Human Resources Policy staff will be going through the 700 pages as fast as we can. The forecast for the next 211 days, however, is cloudy, with patchy fog and a 100 percent chance of precipitation – icy conditions are possible in shaded areas.

The Patient Protection and Affordable Care Act had a rough week. Both the Supreme Court and Congress looked several facets of the law enacted two years ago after considerable controversy.

The Supreme Court focused on the individual mandate, examining its constitutionality and whether it can be separated from the rest of the law. A ruling on the mandate as well as a ruling on provisions regarding Medicaid expansion and the fine associated with the individual mandate is due in June.  If the individual mandate is found to be unconstitutional and not severable from the rest of the law, the entire law could be struck down. As of today, no one appears to have a backup plan should the entire law be stricken.

On Thursday, the Ways and Means Health Subcommittee held a hearing on the repeal of the employer and individual mandate portion of the health care law. The employer mandate provides that certain employers provide health insurance or pay a penalty. H.R. 1744 by Reps. Charles Boustany (R-La.), Pat Tiberi (R-Ohio) and John Barrow (D-Ga.), which the NAM strongly supports, would repeal that requirement. A mark-up is not scheduled on bill but The Manufacturers continue to push for support.

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. (continue reading…)

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?

PPACA: Neither Protective, Nor Affordable

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. (continue reading…)

Even though the Senate voted on party lines Wednesday to retain the 2011 Patient Protection and Affordable Care Act, a large bipartisan majority voted 81-17 to end the 1099 reporting requirement that had employers up in arms. Intended as a revenue generating measure, the provision would have required businesses to file 1099 tax forms on any transactions with suppliers that exceeded $600 in a year. Paperwork nightmare would be too kind of a description.

In the 111th Congress, Sen. Mike Johanns (R-NE) led the fight to kill the measure, arguing that any revenue shortfall that resulted could be made up by reallocating funds that the federal government had yet to appropriate. Senate Democratic leadership instead wanted to raise taxes on companies with foreign earnings or oil company revenues.

Sen. Debbie Stabenow (D-MI) sponsored yesterday’s amendment to end the 1099 reporting requirement, but it’s Johanns’ arguments that carried the day. From Bizjournals.com:

[The] Senate’s decision to tap unspent money to pay for the cost of 1099 repeal makes it much more likely to be agreed to by the House, which already passed total repeal of health care reform. Business groups hope 1099 repeal is enacted quickly because businesses would need time to change their accounting systems if the requirement does go into effect next year.

Business groups opposed the tax increases in the Democratic amendment, contending raising taxes on oil companies would increase energy costs.

“This amendment will cost good-paying manufacturing jobs,” said Aric Newhouse, senior vice president at the National Association of Manufacturers. “Discriminatory tax policies that pick ‘winners’ and ‘losers’ and pit industry sectors against each other undermine U.S. competitiveness, innovation and job growth.”

The Senate vote Wednesday not only ends a horrible, anti-competitive tax provision, it also demonstrates that the 2010 health care law is not sacrosanct. Whether bit by bit or in one fell swoop, the ill-conceived and badly structured law can be repealed. After that, Congress can start again and get it right.

The National Association of Manufacturers on Tuesday sent a “Key Vote” letter to U.S. Senators urging support for the amendment by Sen. Mitch McConnell (R-KY) to the FAA reauthorization bill that would repeal the 2010 Patient Protection and Affordable Care Act. The NAM argues:

The vast majority of American manufacturers, including 97 percent of NAM member companies, voluntarily offer health benefits not only to attract a skilled workforce, but because they believe it is the right thing to do for their employees. Our members support proposals that reduce soaring health costs, improve the efficiency of the current system and enhance the quality of care.

Conversely, manufacturers oppose proposals that make it more expensive or more difficult for employers to offer health benefits. Legislation enacted in 2010 – specifically the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act – will drive up manufacturers’ health care costs and force many companies to consider abandoning the generous benefits they currently offer.

We remain adamantly opposed to the new laws’ employer mandates, industry-specific fees, Medicare hospital insurance tax increases, reporting requirements, excise taxes and limits on Flexible Spending Accounts – all of which will place more burdens on America’s job creators. Our nation can and must do much better at finding a health care solution, and the 2010 legislation should be repealed.

Key Votes are identified by a committee of representative manufacturers from small and large companies, and are used by the NAM to determine a member of Congress’ voting record on issues critical to the manufacturing economy.

Sen. McConnell, the Senate Republican leader, announced his amendment on the floor Tuesday, noting that a federal judge in Florida had just ruled the entire law unconstitutional.

The NAM also issued a statement from Aric Newhouse, senior vice president for policy and governmental relations, “Manufacturers: Health Care Laws Will Cost Jobs and Stifle Growth.”

The National Association of Manufacturers on Tuesday sent a “Key Vote” letter to House members urging support of H.R. 2, the bill to repeal the Patient Protection and Affordable Care Act. From the letter:

The vast majority of American manufacturers, including 97 percent of NAM member companies, voluntarily offer health benefits not only to attract a skilled workforce, but because they believe it is the right thing to do for their employees. Our members support proposals that reduce soaring health costs, improve the efficiency of the current system and enhance the quality of care.

Conversely, manufacturers oppose proposals that make it more expensive or more difficult for employers to offer health benefits. Legislation enacted in 2010 – specifically the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act – will drive up manufacturers’ health care costs and force many companies to consider abandoning the generous benefits they currently offer.

We remain adamantly opposed to the new laws’ employer mandates, industry-specific fees, Medicare hospital insurance tax increases, reporting requirements, excise taxes and limits on Flexible Spending Accounts – all of which will place more burdens on America’s job creators. Our nation can and must do much better at finding a health care solution, and the 2010 legislation should be repealed.

Determined by a committee presenting NAM members of all sizes, Key Votes are used to rate a member of Congress’ record on manufacturing-related issues.

Writing at National Review’s The Corner blog, Yuval Levin dissects the op-ed response from Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius to the federal judge striking down the individual mandate in the federal health care law. Like us, Levin can find no legal or constitutional argument in their Washington Post column, “Health reform will survive its legal fight,” just a weak case made on policy grounds.

Levin writes:

Their argument, in essence, is that the government has the right to do anything it wants to in the health-care arena because all human beings get sick, and their getting sick can have economic consequences. The choice of some not to purchase insurance means that when they get sick they might incur some costs that would have to be shouldered by others. “For decades,” Holder and Sebelius write, “Supreme Court decisions have made clear that the Constitution allows Congress to adopt rules to deal with such harmful economic effects.” And the way the new health-care law would “deal with” such harmful effects is to make it illegal to make the choice not to purchase insurance. Simple.

  (continue reading…)