NAM on Healthcare

October 13, 2009
John Engler- President & CEO

When President Obama and the 111th Congress launched their efforts to reform America’s system of health care, the National Association of Manufacturers (NAM) made a decision to be an active, engaged participant in the policy debate. The Administration and Congress highlighted the cost-saving potential in reform, and the NAM believed we could bring valuable private sector experience to Congress’s discussion. The soaring costs of health care have long ranked as a top concern for NAM’s member companies, 97 percent of which provide coverage to their employees.

Now, as the Senate Finance Committee nears approval of its health care bill, it is an opportune time to update you on the process and the NAM’s perspective on the legislation. The NAM has just sent a letter to Committee Chairman Max Baucus (D-MT) acknowledging the Committee’s efforts but expressing strong reservations about the outcome.

It’s clear the NAM’s engagement has had a positive effect. The Committee’s version preserves the Employee Retirement Income Security Act (ERISA) framework, which gives manufacturers the ability to continue to offer quality benefits so employees can keep their existing plans. The Committee also supports provisions to encourage wellness and prevention programs, which manufacturers have successfully used to improve employee health while lowering costs. Furthermore, the NAM’s involvement has led the Finance Committee to reject damaging proposals like the public option.

Unfortunately, the Finance Committee’s bill and other Senate versions do too little to reduce costs for manufacturers. In fact, they go in the wrong direction. Passage of the Senate health care bill would add substantial costs to manufacturers in the United States, making it more difficult to provide benefits to employees.

The bill also fails to address the costly issue of “defensive medicine” through tort reform, a priority of the business community. In addition, the excise tax imposed on insurance plans represents a major burden for manufacturers, especially those with older workforces and smaller self-insured plans.

The Finance Committee’s imposition of industry-specific fees, on the medical device manufacturers for example, singles out businesses solely to raise revenues – costs that ultimately will be passed onto consumers. We are also concerned about the proposed tax on employer-provided prescription benefits, limits on Flexible Spending Accounts (FSAs) and new requirements on corporate information reporting.

We expect the full Senate to begin debating the health care legislation shortly after the Finance and Health, Education, Labor and Pensions (HELP) Committees’ bills are merged. The NAM’s goal is to continue working with the Senators to improve the bill, but in its current form, the health care legislation does far too little to reduce costs for manufacturers.

I will provide additional updates to you as the debate continues.

John Engler
President & CEO