Proposed legislation by the House Committees on Education and Labor, Ways and Means, and Energy and Commerce known as America’s Affordable Health Choices Act earned rave reviews from lawmakers in a news release announcing the measure, but was resoundingly panned by proponents of the employer-based system.

The legislation, which includes both an employer and individual mandate to cover 97% of the population by 2019, doesn’t fully address the root cause of why the nation’s health insurance system needs to be restructured, gripes Eric Raymond, chief vision officer of Corporate Synergies, a benefits consulting and brokerage firm in Mt. Laurel, N.J.

“Making everybody get insurance and pay for it will not stop the increasing cost of health insurance,” he says. “Increasing prevention, screening, wellness, compliance and additional quality controls are the only things that are going to control medical inflation.”

Adds Alain C. Enthoven, Ph.D., an emeritus professor of public and private management at Stanford University: “As far as I can tell, this bill does nothing to reform the health care delivery system.”

He says what’s needed is a cap on the exclusion of employer contributions from taxable incomes in order to make people cost-conscious and incentives for groups up to at least 100 employees to join insurance exchanges that feature competing plans. “Experience shows that when given the choice, great majorities of people choose less costly care that is based on efficient delivery systems,” explains Enthoven, who’s known as the “father of managed competition.”

The bill may produce some unintended consequences, cautions Michael Thompson, an actuary and principal of global human resources for PricewaterhouseCoopers LLP’s health care practice in New York.

He fears new constraints from company mandates will tie the hands of self-insured employers on cost-sharing measures, as well as looser eligibility requirements and underwriting rules triggering administrative burdens, anti-selection and generally higher costs.

Thompson also believes that eliminating or capping the tax exclusion on employer-provided health benefits may have a regressive impact that results in “significantly increase marginal tax rates at the high end while not sharing any of the burden at the lower end of the spectrum.”

Steve Wojcik, vice president of public policy for the National Business Group on Health in Washington, D.C., slammed the proposal, noting that “a government plan modeled after Medicare won’t solve anything, especially in the long run. We need to transform the way we pay for and deliver care.”

He says any opportunity to reform the nation’s health care system will be squandered if the end result is simply finding new taxes to cover more Americans. His recommendation is to pass legislation that will end ineffective, unnecessary and inefficient care by rewarding health care providers who improve the coordination of care, keep people healthy, operate more efficiently and ultimately produce better outcomes.

Jim Klein, president of the American Benefits Council in Washington, D.C., said in a statement that “all hopes now rest with the Senate Finance Committee to produce a health reform measure that can be supported by everyone with a stake in a reformed health care system.”

Guest blogger Bruce Shutan is a former managing editor of Employee Benefit News and a freelance writer based in Los Angeles.

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