Executive Voices

Health Care Mandates

By Ralph Holt Jr.

In North Carolina's tight job market, the ability of companies to provide affordable health care benefits for our employees is more important than it has ever been. But in today's legislative environment, both at the state and federal level, it is becoming increasingly difficult for businesses to control their health care costs.

In this legislative session of the North Carolina General Assembly, more than 20 health care mandates were proposed. Among the bills include efforts to require coverage of birth control products and services, to allow expanded access to medical specialists in HMO plans, to require coverage of tests for osteoporosis, and to require that benefits for mental health care and chemical dependency be the same as those for physical care.

Taken individually, these types of bills seem reasonable. And as an employer, I want to provide reasonable benefits for my employees. But the sheer volume of all of these proposed additional coverages has a serious impact on the insurance that businesses can afford to offer employees.

By imposing mandates on businesses, good intentions end up producing unintended consequences. Higher health care premiums directly translate into employees paying more for their health insurance or losing it altogether.

Even worse, these proposed bills would seriously undermine the cost savings we have gained in health care through managed care.

To address this important issue, North Carolina House and Senate leaders are discussing setting up a managed-care study commission that would take a comprehensive look at reforms after the legislature adjourns. Rep. David Redwine, a Democrat from Ocean Isle Beach, wants to establish a separate commission to study the cumulative cost of mandates on insurance companies and employers.

Perhaps the most troublesome aspect of this health care debate is that these mandates hit North Carolina businesses at a time when double-digit premium increases are expected from health care providers.

According to the North Carolina Department of Insurance, HMO rates increases this year will include 11.5 percent for US Healthcare, 12.4 percent for Maxicare, 14 percent for Partners and Healthsource and 25.4 percent for CIGNA, among others.

On the federal level, efforts are in full swing to pass the Patients' Bill of Rights. The Patients' Bill of Rights would allow patients to sue both employers and health plans for benefits decisions. Although disguised as “patient rights” legislation, this proposal would drive up the costs of health care and force more people into the ranks of the uninsured.

President Clinton dismisses the costs of the Patients' Bill of Rights as “a smidgen more inflation.” But it has been estimated this legislation will raise health care costs by more than $200 per family. The higher costs to employers, particularly smaller companies, could result in another 2 million Americans losing their insurance benefits, according to the Congressional Budget Office, Towers Perrin and The Barents Group. Likely to be hardest hit are lower-income workers in small companies, the very place where employers already struggle to provide health care benefits for employees.

Health care reform advocates are also pushing to make changes to the federal Employee Retirement Income Security Act, more commonly known as ERISA. If successful, self-insured companies would no longer be exempt by federal law from state health care mandates. North Carolina's self-insured companies would be forced to abide by all mandates passed by the General Assembly.

As Congress debates health care mandates at the federal level, it would do well to study the negative impact mandates at the state level have had on the growing number of uninsured. During the past decade, the number of Americans without health insurance has grown to 43.1 million — a 35.5 percent increase. A key factor in this increase has been the more than 1,000 coverage mandates that have been passed by the states.

Numerous studies have been performed analyzing the results of these mandates, and it is clear that the added costs of mandates — in whatever form — are a key factor to people losing their health insurance.

Does all this mean that there isn't room for improvement in health care coverage? Of course not. We must be ever vigilant to ensure that a system so important to our quality of life isn't thrown out of kilter. But if we allow Congress and the General Assembly to tell us what benefits we must offer our employees, we are letting government seriously threaten our ability as employers to provide quality health coverage at a reasonable cost.

Employers and employees need to continue to work together to develop health care solutions that work for us with minimal government intervention. We cannot and should not return to the era of runaway health care costs.

To stay informed about health care mandates in North Carolina, call the N.C. Businesses for Affordable Health Care at (919) 863-1971.

Ralph Holt is chairman of Holt Hosiery Mills in Burlington and is chairman of the board of directors of Alamance Regional Medical Center.