Business likes Bush's healthcare hints

Big business interests are prepared to back up President Bush’s expected call to make healthcare legislation a priority in the coming legislative year.

Facing escalating costs and aging populations of workers and retirees, large employers are seeking policies that would enable them to limit their future healthcare spending while allowing them to avoid dropping expensive health benefits altogether. The small-business community also favors legislation that would make it less pricey to provide employees health coverage.

Bush has made healthcare a central topic in recent public remarks and highlighted the issue in his weekly radio address Saturday. Observers in lobbying and elsewhere have interpreted the president’s emphasis on healthcare as a preview of his State of the Union address scheduled for Tuesday.

The healthcare priorities of the U.S. Chamber of Commerce, for example, “align almost completely with the recent speeches the president has given,” said Bruce Josten, the Chamber’s executive vice president for government affairs.

The Business Roundtable’s legislative agenda for the year also resonates with the signals coming out of the White House. CEOs representing the Roundtable are planning one of their quarterly visits to Washington Feb. 8, spokeswoman Tita Freeman said, adding that the cost of health benefits will be a major topic of discussion this year.

“We’ve been extremely vocal,” said Maria Ghazal, the Roundtable’s director of public policy. “We’ve had numerous visits with the House and Senate and the White House” already, she added. Other business-sector interest groups, such as the National Federation of Independent Business, have similar aims, she said.

Particularly appealing to business interests are proposals to increase the allure of health savings accounts (HSAs), tax-free vehicles created to encourage people to set aside money for their medical expenses. In a recent radio address, Bush said, “This year, I will ask Congress to take steps to make these accounts more available, more affordable and more portable.”

The proposals that might emerge this year likely will focus on providing additional tax incentives, such as exemptions for the cost of the high-deductible health-insurance plans people must buy in conjunction with the accounts. Some lobbyists also are eyeing increases in the limit on how much an employer or employee can put in the account each year.

HSAs, described by advocates as “consumer directed” healthcare, would work to address the concerns of the business community about their open-ended commitments to health benefits in the future, according to Neil Trautwein, assistant vice president of the National Association of Manufacturers.

A central component of consumer-directed healthcare is to make employees more aware of, and more responsible for, rising costs, thereby “making individuals better healthcare consumers,” Ghazal said.

Critics, including most congressional Democrats, decry this approach as a simple attempt to pass along high healthcare costs to workers. HSAs and other health benefits make employees more vulnerable to high medical expenses without expanding coverage to many of the approximately 39 million people without health insurance, opponents contend.

Josten said that employers are moving in this direction regardless. “It’s ultimately inevitable,” he said, because companies will not continue devoting more of their resources to health benefits.

The desire for more access to HSAs represents a sea change much like that which continues to replace traditional pensions with 401(k) plans, Josten said. The interest in consumer-directed healthcare is part of the same “movement by companies away from defined-benefit offerings” and toward those for which employers can reliably predict their future spending.

These market-based healthcare reforms also could appeal to the segment of the Republican Party most dissatisfied with the Bush administration’s last major foray into healthcare legislation, the Medicare prescription-drug benefit.

“It’s pretty hard to deny that there’s a bad taste left in a lot of lawmakers’ mouths” about the Medicare bill, remarked Pete Sepp, vice president of communications for the National Taxpayers Union. “The HSAs were about the only valuable thing in the rotten Medicare drug bill.”

Language in the Medicare bill created HSAs in their present form. At the time, a number of congressional Republicans indicated that the HSA provisions provided them with consolation while voting for a large expansion of a federal entitlement program.

Fiscal conservatives may still be dissatisfied with the Medicare expansion, but “HSAs certainly fit with their philosophy,” said Mary Grealy, president of a coalition of healthcare CEOs called the Healthcare Leadership Council. “I think the environment for doing something on HSAs …  is probably a little more favorable than a lot of people think,” she said.

Proposals foreshadowed by Bush closely resemble legislation sponsored last year by prominent conservative Republicans such as Reps. Eric Cantor (Va.) and John Shadegg (Ariz.).

In the Senate, Health, Education, Labor and Pensions Committee Chairman Mike Enzi (R-Wyo.) is preparing to move ahead on some of the White House’s agenda, a spokesman said. “I wouldn’t expect him to echo everything the president says, ... [but] we do expect to be supportive in a number of areas,” the spokesman added.

For example, Enzi has been seeking Democratic support for legislation that would enable small employers to form large groups to buy health insurance. Legislation to create the so-called association, or small-business, health plans has stalled in the Senate because it would circumvent state laws that guarantee the availability of certain health benefits and limit how much insurers can raise premiums.