Labor unions and business leaders rarely see eye-to-eye. But
these normally disparate groups recently teamed up to urge action
on health reform. If their venture succeeds, the business community
likely will remember the move as a serious political
miscalculation.
Four groups have joined together in a campaign called “Divided
We Fail” to show that employers, employees, and labor unions all
place a high priority on health and employee benefit reform. They
include the Service Employees International Union (SEIU), the AARP,
the Business Roundtable composed of corporate CEOs, and the
National Federation of Independent Business (NFIB).
What the SEIU and AARP stand to gain is obvious. Many
rank-and-file members of the 1.9 million-strong SEIU are service
industry workers who lack health insurance. The same can be said
about many of the early-retiree members of the AARP.
Although Medicare covers the vast majority of Americans over age
65, some AARP members are too young to qualify and don’t have or
have lost their job-based coverage. Both the union workers and
early retirees are looking to government for solutions.
As for the NFIB and the Business Roundtable, the employers that
these organizations represent are desperate for solutions to their
ever-rising employee health costs. The NFIB says the campaign
provides a national platform to talk about why small business is so
important to America and why rising health costs continue to be the
number one concern of small businesses. The Business Roundtable
sees it as a way to “catalyze new thinking” about high health
costs.
WHILE THE LABOR unions, the AARP, and the big and small business
groups may seem to have common problems and even goals, they will
find it very difficult to reconcile their principles when they get
down to the task of actually talking about solutions.
We can see the evidence from looking at the other agendas of
these strange bedfellows, especially the SEIU. Its Vision for
Reform calls for “a universal health care system” with “guaranteed
affordable health coverage for all Americans” and a “core health
care benefit similar to the one that is available to federal
employees.”
The SEIU certainly has no qualms about forcing employers to pay
for health care. The union spearheaded Maryland’s so-called
“Wal-Mart Bill,” which required the mega-retailer to spend at least
8 percent of its payroll on health insurance. It was overturned in
the courts as violating federal law, but the union nonetheless is
pressing on in other states.
The joint “Divided We Fail” campaign also calls for making
affordable health care available to everyone. But who is going to
pay for that health insurance?
Regardless of the business community’s wishes, legislators
inevitably would require employers to contribute. Indeed, every
recent push for universal coverage has included a “play or pay”
mandate requiring businesses to either provide insurance to their
employees or pay a fine or a fee toward a public insurance
pool.
Witness Massachusetts, which enacted a sweeping overhaul of its
health sector in 2006. The legislation contained the simple
statement that employers must make a “fair and reasonable”
contribution to their employees’ health insurance — health
insurance that every resident of the state is now required by law
to have.
The result? Massachusetts employers must pay at least half of
the premiums, and the share is likely to increase with the
escalating costs of the plan.
It’s understandable that businesses want urgent action on health
issues. The price of employment-based health insurance has
increased nearly 80 percent since 2001, according to the Kaiser
Family Foundation. But the agendas of the SEIU and the AARP are out
of sync with the needs of American businesses.
Principles matter. Bringing competition and choice into our
health sector to get prices down would be a much more powerful
force than more government control and expensive new mandates on
employers. In its unorthodox attempt at unity, the business
community could unwittingly provide political cover to special
interests with a decidedly anti-business agenda.
Grace-Marie Turner is president of the Galen Institute,
a non-profit research organization focusing on free-market
solutions to health reform.
