Issue. For decades, NRECA has urged Congress to enact reforms that will create universal coverage, real cost containment, eliminate cost-shifting from government programs and increase access to quality care for all Americans. Electric cooperatives collectively provide health insurance benefits to over 200,000 employees, retirees and their families. Authorized under the federal Employee Retirement Income Security Act (ERISA), the NRECA Group Benefits Trust is a national plan that allows each member co-op to design a health benefits package tailored to meet the unique needs of its employees and retirees. Whether an electric co-op provides health insurance through NRECA’s Group Benefits Trust or from another source, ever-rising health care costs threaten our ability to provide health care. We support all efforts to make health care more affordable, reliable and sustainable so that electric co-ops can afford to maintain these critical employee benefits. Reforms must also preserve each electric co-op’s ability to tailor its employer provided health benefits package as currently allowed under ERISA.

Status. The U.S. House of Representatives passed the “Affordable Health Care for America Act of 2009” (H.R. 3962) on November 7, 2009 by a vote of 220-215. The House awaits an eventual Conference Committee with the U.S. Senate, which is expected to consider its version of health care reform in December.

NRECA Position. While the House Bill includes individual insurance reforms that we support, like preventing insurers from dropping coverage or excluding pre-existing conditions, it does not meet our core requirements for enacting comprehensive health reform legislation. As such, we oppose the bill.

The House Bill focuses on increasing coverage for the uninsured, ignoring spiraling cost increases for those currently covered, adding tens of millions into a system that can’t be sustained. The bill will:

• Increase overall health care costs for all electric cooperatives by eroding the uniform ERISA system.
  
• Eliminate electric co-ops’ ability to tailor a health benefits package by imposing a one-size-fits-all “essential benefits package.”
  
• Exacerbate the current health care “cost-shift” to private employer-based plans from government plans like Medicare and Medicaid by creating a government-run “public plan”

Health care reform can’t succeed in expanding coverage unless it makes health care more affordable and reliable - otherwise the nation’s health care system is unsustainable. Without focusing on reducing costs and delivery system reform, the House Bill will degrade existing services and reduce access to quality care.

Key Areas of Concern in House Bill
Erosion of ERISA - ERISA currently allows each member co-op to design a health benefits package tailored to its unique employee and retiree populations. The bill’s one-size-fits-all government mandated “essential benefits package” and many other provisions fundamentally alter ERISA, undermining co-ops’ ability to sponsor health coverage. Many co-ops will be forced to curtail coverage to comply with these new requirements, which are expected to change and increase over time. Additionally, the loss of ERISA protections could subject cooperatives to state-based lawsuits, often with unlimited liability.

Pay or Play Employer Mandate - If the ultimate goal of reform is strengthening the employer-based system, an employer mandate to provide the “essential benefits package” to all employees or pay an 8 percent payroll tax is counterproductive. The myriad requirements imposed on employers will ultimately, if unintentionally, lead companies to simply “pay” rather than “play” meaning more plans and employees will be shifted into the public plan.

Government Run “Public Plan” - A public plan in any form, particularly when combined with the impact of Medicare and Medicaid won’t compete fairly acting as both payer and regulator. The public plan’s unfair competitive position, due to both its size and regulatory authority, will merely intensify the current health care “cost-shift” from government plans, making employers pay even more to make up for the shortfall, even if the public plan is initially directed to pay “negotiated” rates.

Fails to Control Costs - The House Bill does more to increase coverage for the uninsured than to halt the spiraling cost increases for those currently covered. This bill, funded with a combination of tax increases, reductions in tax-preferred health savings vehicles and cuts to Medicare, fails to meet President Obama’s goal of “bending the cost curve on health care” for all Americans.

A Better Approach - Build on What Works, Fix What is Broken
Ever-rising health care costs threaten the viability of U.S. businesses and job security for millions of Americans. We agree with President Obama’s call to enact health care reform this year, and will support legislation that:

1. Preserves the ability, provided now under ERISA, of co-ops to tailor health insurance for their employees and retirees.
2. Addresses the real cost-drivers of health care, such as:
   1. Cost and associated demand for new treatments and technologies.
   2. Cost-shift from government plans like Medicare and Medicaid.
   3. Waste, fraud and abuse.
   4. Aging population.
   5. Increasingly unhealthy and sedentary lifestyles.
   6. Defensive medicine.
3. Reforms the insurance market to increase access to affordable coverage and enhance private competition:
   1. Prevents insurers from dropping coverage or excluding pre-existing conditions.
   2. Eliminate “defensive medicine” by providing safe harbor liability protections for health care providers and payers that make “evidence based” decisions.
   3. Mandate publication of provider price and performance data to help identify high-quality providers.
   4. Bundle payments for better management of chronic conditions.
   5. Focus our health care system on keeping people healthy.
4. Implements nationwide interoperable health information technology, along with pay for performance and value-based purchasing to enhance private competition.
5. Permit families and businesses to band together to maximize group purchasing power, enabling them to purchase health insurance across state lines in the newly formed exchange.

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