- The Washington Times - Thursday, May 10, 2007

Fortune 500 companies, facing medical bills they say could bury them, banded together this week to form a coalition that will push Congress to reform the country’s health care system.

But the coalition’s suggestions don’t necessarily support their goals. In health care, a contradiction exists when calls for reform based on competitive market principles are mixed up with a desire for mandatory coverage.

The coalition, called the Coalition to Advance Healthcare Reform, is concededly attacking the health care problem from all angles. For instance, it wants insurance companies to sell policies to anyone who asks, which deals with the troublesome issue of covering people with pre-existing conditions.

Such a requirement, which exists in Massachusetts, New York, New Jersey and a few other states, and has been proposed in Pennsylvania and California, requires states to promote insurance regulation that drives up the cost of coverage for young people in order to cover the elderly.

“The coalition’s plan is a muddled mess,” said Devon Herrick, senior fellow at the National Center for Policy Analysis. “On the one hand, they promote market-based ideas to increase access and promote competition, and on the other they promote artificial controls on the market and mandatory coverage.”

The group includes some of the nation’s largest companies: Pepsico, General Mills, Pacific Gas and Electric, William Wrigley Jr., Kroger, a number of Safeway vendors and grocery-item manufacturers such as Bumble Bee Seafoods. It also includes insurers and drug firms that probably would benefit from mandated health insurance: Aetna, Blue Shield of California, Cigna HealthCare, Eli Lilly and PacifiCare.

There is no doubting that health care costs are a significant problem for American businesses. At the current growth rate, medical expenses will make up 22 percent of the country’s gross domestic product by 2015, putting a cramp in U.S. companies’ ability to compete globally.

And despite a leveling off over the past several years, premiums for employer-sponsored coverage still increased 7.7 percent last year, twice the rate of inflation.

The coalition says it will push federal lawmakers to provide tax breaks to individuals who pay for their own health care costs, as businesses receive now. Equal tax treatment in the health care system is admirable, though not a new proposal.

The coalition is reiterating the Bush administration’s proposal for a standard tax deduction for people who buy health insurance in the individual market so they receive the same cost breaks workers generally receive. The coalition has not proposed a specific tax deduction — the administration is asking for a $15,000 deduction for families purchasing health insurance on private health plans.

“If the coalition would had just stopped there, they might have been on to something,” said Mr. Herrick. Indeed, a one-step-at-a-time approach is the proper strategy when trying to reform health care.

Instead, the coalition’s objective, while endorsing costly guaranteed health insurance, also calls for mandatory coverage. And there are no guarantees when mandating coverage. Take the auto insurance example: All but three states mandate auto insurance, yet, as a percentage of population, there are almost as many uninsured drivers across the country as there are people without health insurance — a mandate doesn’t guarantee people will purchase insurance.

“We think that in order to solve the problem, everything must be on the table,” said Julie Soderlund, spokeswomen for the coalition.

Health Care runs Fridays. Contact Gregory Lopes at 202/636-4892 or glopes@washingtontimes.com

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