A Real Employee Free Choice Act

Big business is fighting the most important health-care reform.

Originally Posted At The Wall Street Journal
By Matt Miller
October 1, 2009

As health reform legislation hurtles toward its finale, corporate America has rushed to the barricades to make sure that big business remains at the heart of the welfare state. The Business Roundtable, the Chamber of Commerce and the National Association of Manufacturers are united in their belief that Sen. Ron Wyden's (D., Ore.) "free choice amendment" must be stopped.

Mr. Wyden's measure, which is being offered as an amendment to the Baucus bill in the Senate Finance Committee, would come into play if employers failed to offer their workers meaningful choice of affordable plans. In that case, employees would be allowed to turn the cash employers currently spend on their health benefits into vouchers with which they could buy coverage from newly created insurance exchanges.

Big business thinks that giving employees this choice would be a calamity. To which one can only ask: Have these business lobbies lost their minds?

When the post-mortems on the health-care reform debate are written, the biggest mystery will be why big business fought so hard to stay in the health-care business even as soaring health costs surpassed corporate profits and diverted executive time better devoted to actually running companies.

America's employer-based health-care system may have made sense 50 years ago, when care was cheap, U.S. business faced little global competition, and fending off socialism was a Cold War priority. Circumstances have changed radically since that time. Yet corporate America—egged on by human resources executives threatened by change—remains caught in a time warp.

It's bad enough that business didn't do the smart thing up front and urge President Barack Obama to move the nation beyond employer-based care. That was major lost opportunity No. 1.

But on what possible theory does big business now assert that the 175 million Americans who get coverage on the job deserve no new choices? Most firms offer just one insurance plan, or narrow set of plans, to their workers. Why shouldn't these Americans also benefit from the myriad options that will become available from newly established competitive insurance exchanges?

The language used in a letter sent Tuesday to the Senate Finance Committee from something called the "National Coalition on Benefits"—a body controlled by corporate HR execs—reveals the confusion and paternalism still permeating the executive suite when it comes to the employer's role.

Mr. Wyden's proposal, the coalition asserts, would "fundamentally frustrate employers' attempts to administer integrated health improvement strategies." As a factual matter, this is incorrect. But why should "health improvement strategies" be the job of American businesses? Sounds more like a job for American doctors, in conjunction with their patients.

The status quo crowd also writes that Mr. Wyden's measure "would likely harm employer-employee relations because most employees have a longstanding expectation that their employer will be their primary source for health coverage." But employees already chafe at the shrinking coverage now available on the job. And who wouldn't want more options?

It's clear to anyone who looks that the edifice of employer-based coverage is crumbling. A recent survey sponsored by the Committee for Economic Development, a business-led think tank, showed that 62% of senior executives think the system is unsustainable. While the under-65 population has grown by 25 million since 1999, the number of people who get health care from their employers has declined. Numerous CEOs have told me privately that they'd just as soon get out of the benefits business altogether, which makes one wonder who the National Benefits Coalition really represents.

Mr. Wyden's measure would strike a modest but meaningful blow for modernity by making it possible, for the first time, for American workers to access group coverage outside their jobs. Once the infrastructure of these insurance exchanges is established, more firms will offer more people more choices over time. If business is smart, it will then strike a grand bargain in which government picks up the costs of the health-care voucher in exchange for business lending its support to the modest consumption tax needed to replace the corporate money being withdrawn from the system.

If this plays out as it should, the result will not be the single-payer system of Britain or Canada, but an American version of the Swiss or Dutch model of universal coverage in which private insurers and providers organize and deliver care. A decade or so from now, finally freed from this antiquated health-care system, everyone in corporate America should be happy.

Except for HR executives at big companies, who will have surrendered the commanding heights of the welfare state. So here's a thought, Sen. Wyden: Sweeten your amendment with a generous buyout plan for HR chiefs at the Fortune 500. And watch opposition to more freedom and choice for millions of Americans melt away.

Mr. Miller, a management consultant, is the author of "The Tyranny of Dead Ideas: Letting Go of The Old Ways of Thinking To Unleash a New Prosperity," (Times Books, 2009).

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