'Fair Share' Bills: How Much Traction?

A Wal-Mart spokesman declined to be interviewed for this article.

In February, Wal-Mart CEO Lee Scott criticized the large-employer coverage bills but assured members of the National Governors Association, Washington, that he takes concerns about health benefits seriously.

“We need solutions that make health care more affordable and accessible,” Scott said.

Wal-Mart is addressing the needs of uninsured employees, Scott said, by cutting the waiting period for part-time employees to become eligible for company health coverage to six months; expanding access to a plan that comes with a $1,000 deductible but costs only $11 per month for individuals; and designating all children of part-time Wal-Mart employees be eligible for health coverage as soon as their parent becomes eligible.

NAHU opposes the idea of state mandates on principle, but it has not taken an official stand on the bills because it does not take positions on state bills.

America’s Health Insurance Plans, Washington, has not taken an official position, either. “We’re simply monitoring the status of the legislation as it pops up,” says AHIP spokesman Larry Akey.

The debate about the bill is of less interest to AHIP members than it might otherwise be because most of the employers directly affected by the bills are large, self-insured employers, Akey says.

Vince Phillips, a lobbyist for the Pennsylvania Association of Health Underwriters, Mechanicsburg, Pa., suggests in a recent PAHU newsletter that the unions are attacking the wrong enemy. He says the real problem is the high cost of health insurance.

Gerard Anderson, a public health professor at Johns Hopkins University, has testified on Capitol Hill that the real problem plaguing the U.S. health finance system is high health care prices. Although U.S. residents get less health care than residents of many other developed countries, total expenditures are higher here because our care costs more than twice as much, Anderson told members of the health subcommittee of the U.S. Energy and Commerce Committee.

But benefits brokers interviewed are convinced that state benefits mandates are contributing to the problem of high coverage costs and increasing numbers of uninsured workers. The brokers emphasized employees of small companies are far less likely to have health coverage than employees of the corporate giants.

In Massachusetts, thanks to mandates, “your choice of plans is a Cadillac, a Cadillac or a Cadillac,” says Paul Rooney, president of EBS Insurance Brokers Inc., Newton, Mass.

Rooney says he can sell a limited benefit health plan in Massachusetts that provides just a few thousand dollars of coverage, but he cannot sell a low-cost, high-quality major medical plan that leaves out coverage for in vitro fertilization.

In Maryland, the percentage of groups with two to 50 employees that have coverage is dropping because employers can wait until an employee develops a major illness, then buy coverage that will take effect within two to four weeks, says Lawrence Ulvila Jr., president of Insurance Solutions Inc., Annapolis, Md.

“When your barn is on fire, that’s not when you’re supposed to buy insurance,” Ulvila says.

The brokers interviewed fear the large-employer coverage mandates will set states on a slippery slope toward trying to provide government-run health coverage, and they say mandates in some states already have eliminated so much competition that one or two private carriers now control the market.

Sam Fleet, president of National Employee Benefit Companies Inc., Warwick, R.I., scoffs at the idea of state governments or the federal government running a successful universal public health system.

“Let’s go to the registry of motor vehicles and buy our health insurance,” Fleet jokes. “‘You’re No. 281 in line. Good luck with your colonoscopy.’”

But Rooney says he believes the current debate in Massachusetts is less bitter than the health maintenance organization debates of the late 1990s.

The unions have organized heated public relations campaigns in support of the large-employer coverage bills. UFCW members, for example, dressed up in Halloween costumes in October 2005 and notified the media they were selling candy to raise money for uninsured Wal-Mart employees.

But, back in the 1990s, politicians “would get on the stump and kick the hell out of the HMOs,” Rooney says.

Today, both employers and employees seem to have a better understanding of the pressures health insurers and HMOs face, Rooney says.

Brokers interviewed warn colleagues who have an opinion about the large-employer coverage bills against expecting national insurance groups to do the lobbying. The involvement of national organizations could backfire, they say.

Instead, Ulvila says, brokers who want to have a say on the bills should enlist support at home. “You’ve got to get a real grassroots effort going and include your clients.”

In the long run, the best solution might be supporting laws and regulations that encourage carriers and employers to offer a wider range of benefits, to appeal to younger workers as well as older workers, Fleet says.