One of the provisions of the Affordable Care Act (aka Obamacare) that has aroused the most controversy (perhaps because it is one of the few provisions that most people can readily understand) is the "employer mandate" requiring that all businesses with 50 or more workers provide their full-time employees with health care coverage by 2014. While the employer mandate does not affect nearly as many people as the "individual mandate" requiring that every man, woman, and child purchase health insurance by that date or face a substantial monetary penalty, it has generated its own little tempest. Most of the resistance to the employer mandate has come from restaurant chains, most notably from the CEO of Papa John's Pizza, John Schnatter. He made quite a splash last December by predicting that companies like his would "find loopholes to get around" the requirement, opining that "its common sense for companies to reduce workers hours so that they no longer fit the definition of full-time employees. Darden Restaurants, which owns Red Lobster and Olive Garden, acknowledged that it was experimenting with cutting workers's hours for the same purpose. The owners of Carl's Jr. and Hardees chains announced that they would employ many more part-time workers in the future. One Denny's franchise owner in Florida said that he would add 5% to the price of each meal. Papa John himself calculates that providing health insurance coverage would add from 11 to 14 cents per pizza. (Maybe I am missing something here, but don't hours reductions and price increases place the burden on employees and customers, rather than on owners and managers?) Reacting to a customer backlash (workers obviously have a choice between working part-time and seeking other employment with more sympathetic fast food entrepreneurs), some companies and their executives have softened their original positions. Last week, Darden announced that it would not reduce the hours of current employees (what about new hires?), while Papa John said that while he could not speak for individual franchise owners, the corporation itself would not cut workers hours. In addition, he announced on The Huffington Post "the good news" that full-time workers would receive coverage, and that the company would not be put at a competitive disadvantage because "our competitors are going to have to do the same thing."
Incredibly enough, the concept of employer mandate originated during the administration of that notorious crypto-socialist Richard Nixon. Realizing that the Democrats had accumulated a lot of political capitol by enacting Medicare and Medicaid, and aware that the rising costs of health care were a serious drag upon the economy, he proposed that all employers be required to pay health benefits for their workers. He even suggested a subsidized government insurance program for all Americans that employer coverage did not reach. (This was a giant leap from his position during the 1960 presidential debates when he had half-heartedly suggested that those who who so desired should have a choice government or private insurance.) Of course, he was not unaware that such a program would mean millions of new customers for private insurance companies, but let's give the devil his due.
As Yale political scientist Jacob Hacker has observed, Nixon seemed "more interested in rationalizing health care than promoting national health insurance. Although as many as 20 separate bills were introduced during Nixon's administration. no proposal for universal coverage received a majority vote from a Congressional committee until the ill-fated measure designed by Hillary and Bill Clinton in 1994. Perhaps the major result of Nixon's efforts was the formation of Health Maintenance Organizations (HMOs), which were a great boon to insurers and to the medical profession in general. Membership in HMOs was clearly out of the financial reach of millions of citizens. Ironically, opposition to Nixon's proposals was led by none other than Ted Kennedy, who wanted single-pay universal coverage. It was a mistake that he later regretted. He had erroneously believed that the momentum for universal health insurance was irresistible. "It was that rare moment in his Senate career when he made a fundamental miscalculation about what was politically possible--a lot of liberals did," according to Yale political scientist Jacob Hacker. "What was not recognized by anyone at the time was that this was the end of the New Deal era" he adds, and that the tax revolts of the 1970s "ushered in Ronald Reagan and a conservative, antigovernment [sic] philosophy." That mindset, in turn, was given a momentous boost by the Watergate Scandal and Nixon's forced resignation, (Poor Trick Dick. Even when he tried to "appeal to the better angels of our nature", he was sandbagged by his baser instincts.) As for Ted, Chappaquiddick proved to be his Watergate. He had earlier joined with Walter Reuther of the United Auto Workers and several physicians, professors, and politicians in forming a Committee for National Health Insurance, which produced an ill-fated Health Security bill. In 1991, he
co-sponsored an unsuccessful Health America bill that combined an employer mandate with "Medicare For All.".(Princeton health economist Uwe Reinhardt even facetiously asked the "Liberal Lion" if he intended to give Nixon a footnote.)
So, for better or worse, the employer mandate has been one of the cornerstones of our health care policy, for nearly 40 years. It is clearly nothing new or radical. In fact, it has generally enjoyed bipartisan support. What, then, is causing all this brouhaha? Maybe it is because "Obamacare" signals a greater determination on the part of the federal government to expand and enforce the mandate. Much of it is certainly due to the fact that today's health care industry is much better organized, more powerful, and more intransigent than it was in the 1970s. Much of it is certainly due to the fact that today's Republicans make those of the Nixon Era seem like flaming liberals--or even, heaven forfend, socialists. As noted above, many employers fervently believe that the mandate will force them take measures that would pain them to the quick--raise prices, cut back workers' hours, or mechanize and computerize because machines don't get sick and don't require health coverage. It would also put them at the mercy of private health insurers, which is a state that no savvy businessman would submit to willingly. They understand that insurers would make them "pay through the nose," because that is exactly what most of them would do in a similar situation.
Fortunately, there is a solution, one that would employer and employees alike, as well as the millions of Americans who have not been able to secure or hold a job that entitles them to health care coverage. It would liberate employers from an onerous and expensive obligation, significantly lower their cost of doing business, and free them to spend more money on adding new workers, paying higher wages and other benefits, research and development, and service to their communities. It would free them from conforming to the endless paperwork and red tape imposed by business and government bureaucracies alike. It would eliminate the need to haggle with unions or other employee advocates. over the relative merits of insurance plans, and to worry if they were doing the best possible job of providing the best possible health care for their employees It would eliminate one major bone of contention between employers and employees. It would eliminate the nagging fear that their workers have decided to work for them, instead of one on their competitors, solely because they have a better health insurance plan. We could call it universal health coverage, single-pay, a public option, Medicare for All, or any of the various models that grown-up countries already have. We could even call it something like a free market in health insurance. It would validate the first principle of insurance: the larger the pool of subscribers, the more the risks are spread out and their total cost minimized. It would not necessarily eliminate private, for-profit health insurers. It would only require them to compete on an equal footing with their peers and against the "yardstick" provided by a public option. Of course, it might cut down on their profits and dividends, as well as on the salaries and benefit packages of their executives, but that would be a relatively small price to pay for creating a much more efficient and economical health care system.
Come to think of it, such a system would also eliminate the even more odious individual mandate.