NFIB Back To Fear-Mongering About Employer Mandate
NFIB Back To Fear-Mongering About Employer Mandate
During President Clinton’s failed effort to reform the health care system, the National Federation of Independent Businesses (NFIB) misrepresented Clinton’s employer mandate as a crushing financial burden that would cost thousands of jobs. The organization dispatched a constant stream of “Fax Alerts” and “Action Alerts” to its tens of thousands of small-business owners and published hundreds of anti-mandate editorials in local newspapers.
Fifteen years later, as this President prepares his own health care initiatives, the NFIB is back to its old play book. Last week, the group released two studies showing that an employer health insurance mandate would “cause 1.6 million jobs to disappear (66% from small businesses) and would cause U.S. real GDP to contract by approximately $200 billion“:
Employer mandates, the paper explains, ultimately reduce the number of jobs and pass costs along to the employees who are the alleged beneficiaries of the mandates. The mandates also impede business investment and effectively impose regressive taxes on both employees and owners of small businesses.
Progressives see the employer mandate as one way of building comprehensive reform and moving the country towards universal coverage — without fundamentally disrupting the health system. Since some 60 percent of Americans already receive health insurance from their employers, requiring all large firms to insure their employees could significantly reduce the number of uninsured, guarantee continuity of coverage, and spread the cost of insurance across different payers (the government, employers, and the individual).
In April 2006, this theory of “shared responsibility” was put to the test. Massachusetts adopted comprehensive health care reform and required employers with more than ten employees to either set up a Section 125 plan and offer a “fair and reasonable” contribution for their employees’ coverage, or “pay an annual ‘fair share’ contribution of $295 per employee.”
Now, if we’re to believe the NFIB studies, employers should have passed the costs of health insurance to consumers, reduced wages, or fired lots of people. Instead, the great majority of Massachusetts businesses embraced health reform:
- Few firms reported making changes as a result of health reform.
- Firms reported making few changes in cost sharing or in offering more plans are a result of the mandate.
- Employer coverage increased by five percentage points.
- Massachusetts employers were less likely than employers nationally to terminate or restrict eligibility for health benefits.
These most recent NFIB studies, like their historical counterparts, have already made their way into local newspapers. And while their conclusions are predictable, their methodologies are suspect. The NFIB model assumes the mandate applies to small businesses despite Obama’s campaign promise to the contrary, inflates the employer contribution to 50 percent of the cost of insurance (compared to the Massachusetts mandate of $300), and relies on faulty premium growth projections (premiums are expected to slow as a result of universal coverage).
All of this is a cautionary tale. NFIB is going for a repeat performance of 1993 and it’s up to us to call them on it.
6 Responses to “NFIB Back To Fear-Mongering About Employer Mandate”
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Does Canada need an incremental employer mandate for their single payer system?
February 4th, 2009 at 7:36 pmI’m sorry, but this is a poor quality post.
I don’t think you do progressives any favor by relying on Massachusetts and the $300 fee as a counter to NFIB. If we’re going to have meaningful employer mandates, and we should, we’re probably talking about 5% to 8% of payroll or a $1 to $3 dollar an hour fee. Even 50% of the cost of health care, underestimates what meaningful employer mandates will look like. Small businesess, that can’t afford it (frankly, many can) should be either exempt or subsidized. But we shouldn’t mislead or shrink from the fact that an employer mandate has costs – the employer arguments are bogus, just like the arguments they continually make against minimum wage.
Also, we should put it another way. NFIB claims they support coverage for all. But they oppose employer mandates, individual mandates, and single payer. Just how, do they propose, we get there? If we want to build on the employer-based system (as they say), then we must rationalize it.
February 5th, 2009 at 12:46 pmAgree with Steve. I live and work as a nurse in Massachusetts. The employer “fair and reasonable contribution” component of the mandatory insurance law is a sham, as are most of the other components if you look below the superficial rhetoric. Yes, more people have “insurance” but what quality and at what cost to the state, individuals/familes, and employers? The law did squat to lower the obscenely high cost/low quality of what we get for our helath care dollar in MA.
Massachusetts is reeling (as almost all states are), faced with a $2Bil budget deficit; but you never hear about the $1Bil in new state spending that’s part of the 2006 insurance law that’s being used to subsidize private HMO policies for most of the “newly insured”.
Yes, employers–along with the rest of us–need a better and more deal for their contributions to health care, but as Steve says “NFIB claims they support coverage for all. But they oppose employer mandates, individual mandates, and single payer. Just how, do they propose, we get there? If we want to build on the employer-based system (as they say), then we must rationalize it.
February 5th, 2009 at 9:25 pmOn a positive note, this time around, there’s a ten-state coalition of groups representing small business owners that supports a public health insurance plan, in direct contrast with the NFIB’s Republican party line.
February 6th, 2009 at 1:05 amRational businessmen, as opposed to GOP shills, have little reason to object to a burden that’s the same for them and their competitors. The only solid objection would be about international competition. But the big difference in costs between the US and China is wages, and anyway China is revamping its health care. European and Japanese firms already support more advanced welfare states; from their point of view, it’s the US that is labour dumping today.
February 6th, 2009 at 4:18 amGlad you’re noting NFIB’s study, but it’s unfortunate that you regard data and research as “fear-mongering.” In 2008, I chaired five left-meets-right public forums for NFIB, and two of them featured experts from CAP. Seems to me our conversations were thoughtful and pleasant. Can’t recall any fear-mongering on anyone’s part.
We can quibble over numbers, but the study’s logic is indisputable: Employer mandates raise the cost of hiring workers, discouraging employment. For some firms, the burden is prohibitive, leaving them only four options: replace full-timers with machines, replace them with part-timers, turn to foreign outsourcing, or close their doors. Which of those do you regard as good for workers? The Massachusetts article doesn’t refute our findings given that: (1) It appeared only a year or so after Massachusetts implemented its mandate; (2) Massachusetts’s employer base, income, demographics, and health status are atypical; (3) the program is sinking the state’s finances because the $295 contribution is inadequate and unsustainable; and (4) universal coverage is slipping away as finances force the state to exempt lower-income groups from coverage.
Quality insurance must be available to all, including the sick and poor. But this goal mustn’t crush the capacity of small business to create and maintain jobs. In good times, small business produces 2/3+ of all new jobs. In harder times, small business can’t be saddled with requirements that destroy jobs.
I hope you’ll read the study itself and its accompanying white paper — not just news excerpts.
Bob Graboyes
February 6th, 2009 at 5:17 pmSenior Healthcare Advisor, NFIB