The Affordable Care Act allows young adults to stay on their parents’ health care plan until age 26. The Department of Labor’s Employee Benefits Security Administration offers information on the extension of coverage and the steps needed to take in order to participate in this new benefit.

Click here to read the fact sheet created by the Department of Labor.

Click here to FAQs on young adult coverage and the Affordable Care Act.

The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning 2010.

The IRS has developed a simple, 3-step worksheet to help employers determine if they may qualify for the Small Business Health Care Tax Credit. (View it by clicking on the link at the very bottom of this article.)

Click here to learn more about the new tax credit and read an FAQ published by the IRS.

By Doyle McManus - Los Angeles Times

Writing From Lugano, Switzerland

At least one country already has a healthcare plan roughly similar to the one President Obama and the Democrats have proposed, with universal coverage, a mandate that everyone buy insurance and a major role for private insurance companies: Switzerland.

So I used part of a vacation last week to head for the Swiss Alps to observe the system in practice.

Dr. Jean-Oscar Meile, 53, runs a tidy one-man practice in Melide, a suburb of Lugano in Switzerland’s Italian-speaking south. He is quick to say he’s not a spokesman for Swiss doctors, the government or anyone else. But he has about 1,000 patients, as varied as bankers, fashion designers, rural woodcutters and immigrant laborers.

“We’ve got a lot of problems,” he told me last week. “Costs are going up. Nobody wants to pay for them. The politicians want us to drive a Mercedes, but they’re only willing to pay for a Volkswagen. … The system was better a few years ago, before there was so much regulation.”

Still, he added, “I think we have the best system in Europe. All the American doctors I know complain about your system and are jealous of ours.”

Here’s how the Swiss system works: Everyone is required to buy basic health insurance from one of several private companies; the government subsidizes the cost for low-income families. Consumers can choose any insurer and go to any doctor — more choice than most Americans now enjoy. The government prescribes what the policies will cover, sets the price and tells doctors what they can charge for every medical procedure. Doctors are free to do whatever they feel is called for, order up any test and prescribe any approved medication. But if a doctor’s billings exceed the regional median by too much, he or she will get a “blue letter” — a bill from the government demanding the return of some of those fees.

By world standards, Swiss medicine is very good. The average infant born in Switzerland can expect to live to almost 82, more than three years longer than the average American baby. Swiss patients don’t wait long for treatment either. “If you need an MRI, I can arrange one tonight or tomorrow,” Meile said. And they pay a lot less than we do. About 11% of the Swiss GNP goes to healthcare, against about 16% of ours. Per person, that worked out in 2007 to roughly $4,417 in Switzerland and about $7,290 per person here, according to the Organization for Economic Cooperation and Development.

That makes Switzerland’s system a lot cheaper than U.S. medicine, but it’s not cheap in the eyes of many Swiss. In fact, the Swiss pay out-of-pocket costs that are higher than the U.S. average. This year, the basic Swiss health insurance policy cost an average of about $3,800 per adult over age 25, with a deductible of about $300 for the year and a co-payment after that of 10% (up to a ceiling of about $700). Next year, the premium will rise by about 9%. Some employers pick up a big chunk of the premium, but not all.

The unrelenting rise in costs has been the single biggest disappointment in the Swiss universal coverage system, which was created by a landmark reform in 1994. To Meile and others, the basic reason is evident: The well-insured Swiss use a lot of medical care — too much, in fact. They visit their doctors more frequently than Americans do. They often ask for tests or pharmaceuticals that they’ve heard about from friends. And nobody wants to tell them no.

“People come in with back pain and ask for a CT scan,” he said. “We have hypochondriacs who come in every month and ask for an EKG. The [doctor] is going to get blamed either way. If he orders the test, it’s too expensive; if he turns down the patient, the patient might switch doctors.”

The price structure creates another quirk, he noted. In January, when people have that deductible to pay, “nobody comes to the doctor.” But by December, when many patients have hit the out-of-pocket ceiling, doctor’s appointments are effectively free. “That’s high season for us,” Meile said.

The average general practitioner in Switzerland, he said, makes about $150,000 a year, but cardiologists and other specialists can make $300,000 or more.

“That’s not a complaint,” he added. “We’re not starving. We’re probably the best-paid doctors in Europe. Not everyone can be a millionaire.”

Here’s what struck me most about Meile’s practice: All of his patients have the same basic insurance policy, banker and woodcutter alike (although the affluent ones buy supplemental insurance that covers private hospital rooms and dental care). None of them has to worry about going broke because of medical bills.

And here’s what struck me about his clinic: Except for the German-language health posters, it could have been a doctor’s office anywhere in the United States — receptionist’s desk, X-ray room, EKG machine, mini-lab. With one exception: No billing department, no bookkeepers. The insurance system is so simple that Meile handles all the billing himself. Charges go to insurance companies electronically and are paid within 10 days.

So, what can we learn from all this?

One lesson of Switzerland’s experience is that near-universal coverage is possible without a government-run “public option.” Swiss health insurance is provided entirely by private companies, even for the elderly. (In that sense, it’s less “socialized” than U.S. medicine: There’s no government-run Medicare.) By law, the basic insurance plans are nonprofit, but companies use them to attract customers to their for-profit lines of business.

Another lesson: Cost containment is very, very difficult — especially if, like Obama and his Swiss colleagues, you’ve promised voters that they’ll still get all the care they want.

A third lesson: Don’t expect miracles. The Swiss are still working the bugs out of their system, 15 years after it was enacted. They still haven’t covered everyone, and illegal immigrants are a continuing problem.

Still, they get medical care as good or better than ours, at a cost that’s significantly smaller. They must be doing something right.

doyle.mcmanus@latimes.com

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The hidden costs of ObamaCare

Floyd and Mary Beth Brown - Delaware Online

How much is this going to cost? This is a simple and reasonable question to ask before signing a document stating that you are responsible and will pay any amount not covered by your medical insurance when having a procedure done. Try asking it the next time you have an x-ray (or any other procedure.) A family member of ours did recently when he was experiencing back pain, and when registering, asked the woman working at the radiology company how much an x-ray of the back cost. The x-ray was ordered by his doctor.

The woman said she couldn’t tell him the price because it varied and the rate was going to be worked out later with his insurance company. “Can’t you give me a rough idea how much an x-ray of the back costs?” he said. “Isn’t there a set rate for each procedure that I can see?” “No,” she said, “there is no way of knowing the price right now. I’m sorry.”

Just imagine having any other service or purchasing a product and being told you couldn’t know the cost beforehand, although you are required to blindly sign a legally binding contract saying you will pay whatever they later decide to charge you. That’s unethical and ridiculous you’d say. Well, welcome to the American health care system.

Not letting a consumer know the price before a service is performed would not be allowed in any other business except health care. This is a major reason the system and its escalating costs are out of control and so high. Medicare patients are charged one amount, Medicaid another and each private insurance company and individual policies are charged yet another rate for the very same procedure.

As an expert in antitrust and healthcare, Professor Clark Havighurst of Duke University Law School often speaks of restoring the “price tags” to health care. In The Wall Street Journal, Holman W. Jenkins, Jr. wrote regarding Havighurst’s theory: “Now that’s a concept that the public could actually make sense of.”

“The public is not as dumb as it’s made out to be,” says Jenkins. After the public options died in the Senate Finance Committee, Jenkins claims, “What’s left is a package of ‘reforms’ that are mere trite extensions of what we’ve been doing for decades… piling up mandates on private insurers and then lying that this somehow isn’t driving up the cost of health insurance,” and “piling up subsidies for health consumption and then lying that this isn’t responsible for runaway health-care spending.”

The proposal to amend the anti-trust McCarran-Fergusson Act, Professor Havighurst says, leads to no improvement because at the end of bill, it “declares that state regulators would retain authority to engage in ‘information gathering and rate setting.’” It boils down to simple common sense. Havighurst wrote in a 2006 Journal of Health Politics, Policy and Law, “[F]ew things are more foreseeable that that a trade or profession empowered to regulate itself will produce anticompetitive regulations.”

Let’s just follow common sense. Allow health care to act according to the free market, like most other businesses.

Obama should been forthright in sharing with Americans how resources would be allocated if not by price. The left’s single-payer system still won’t allow consumers to have pricing information so some other mechanism with be used to ration care. A common sense approach would require all healthcare providers to post charges in the waiting room. But instead of putting the price tags on health care so consumers could decide instead, Obamacare complicates and adds new layers to an overly complex and monopolistic system. Obama has botched an opportunity for real progress.

President Obama, don’t under estimate the American public. We’re not dummies; we like to use common sense in making decisions for ourselves. Free the marketplace — don’t increase regulations.

The proposal to amend the anti-trust McCarran-Fergusson Act, Professor Havighurst says, leads to no improvement because at the end of bill, it “declares that state regulators would retain authority to engage in ‘information gathering and rate setting.’” It boils down to simple common sense. Havighurst wrote in a 2006 Journal of Health Politics, Policy and Law, “[F]ew things are more foreseeable that that a trade or profession empowered to regulate itself will produce anticompetitive regulations.”

Let’s just follow common sense. Allow health care to act according to the free market, like most other businesses.

Obama should been forthright in sharing with Americans how resources would be allocated if not by price. The left’s single-payer system still won’t allow consumers to have pricing information so some other mechanism with be used to ration care. A common sense approach would require all healthcare providers to post charges in the waiting room. But instead of putting the price tags on health care so consumers could decide instead, Obamacare complicates and adds new layers to an overly complex and monopolistic system. Obama has botched an opportunity for real progress.

President Obama, don’t under estimate the American public. We’re not dummies; we like to use common sense in making decisions for ourselves. Free the marketplace — don’t increase regulations.

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Reform and Your Premiums

After months of seeming mostly supportive of health care reform — and just before the Senate Finance Committee was set to vote on its bill — the leading industry trade group issued an inflammatory and utterly self-serving report alleging that the committee’s bill would drive up premium costs for Americans by thousands of additional dollars a year.

The committee sensibly went ahead and approved the bill. But the anxiety raised by the report needs to be addressed head-on.

There are so many factors in all of the versions of health reform legislation that could affect the cost of insurance — driving it up or down — that the nonpartisan Congressional Budget Office has been unable to offer an estimate of the net impact. A rigorous assessment must be made as the bills proceed through Congress.

Most analysts already agree that the industry’s report was so deliberately skewed to produce frightening results that it deserves little credence.

The analysis was commissioned by the trade group America’s Health Insurance Plans and prepared by PricewaterhouseCoopers, a big accounting firm. It looked only at four components of the Finance Committee’s bill that have the potential to drive up premiums while ignoring other components that would likely drive down the cost of insurance for huge numbers of people.

The report claimed that the hardest hit would be people without large group coverage — namely those who work for small employers or buy policies directly from insurance companies. It claims that their premiums would go up by 49 percent for individual purchasers and 28 percent for small employers — mostly because the proposed regulations would require insurers to accept all applicants without regard to health status, while the penalty for anyone who decides not buy insurance would be late and comparatively small.

As a result, the report argued, healthy people would find it easy to defer coverage, leaving only sicker people in the insurance pool, where their higher average medical costs would inevitably drive up premiums.

•

We agree with the industry that the mandate — the requirement that nearly all Americans buy insurance or pay a penalty — should probably be stronger, and we wish the subsidies offered were more generous. But the rest of the argument is deeply flawed.

First, under the legislation, anyone who currently has a policy that turns out to be cheaper than those sold on the exchanges will be allowed to keep it.

An analysis by Jonathan Gruber, a respected health economist at the Massachusetts Institute of Technology, using data generated by the Congressional Budget Office, demonstrates that even in its current form the Finance Committee’s bill would actually save individuals and families who currently buy their own policies hundreds if not thousands of dollars in annual premiums.

This is because policies offered on the highly regulated, competitive exchanges would probably be cheaper than comparable coverage available on today’s overpriced individual market.

In a particularly glaring omission, the industry report made no effort to factor in the effect of proposed subsidies that would help millions of people to buy their own insurance on those exchanges. The subsidies would help people earning less than four times the poverty level, or about $88,000 annually for a family of four.

The industry report also claims that Americans who currently buy their insurance through large employers would see their premiums rise by 9 percent to 11 percent, depending on the form of coverage. It blames most of that on a new excise tax on high-cost insurance policies. Under the Senate Finance Committee’s bill, any insurance plan that costs $8,000 for individuals or $21,000 for families would not be taxed; any value above that would be taxed at a rate of 40 percent.

As much as Americans hate the idea of taxes, there is a strong logic to this approach. It is designed to encourage employers and their workers to buy less-expensive plans — and make a more rational calculation of what services they need versus what is “free” because it is covered — and encourage employers to shift compensation more toward higher wages.

The report does acknowledge that likely shift, but then it blithely calculates the impact of the tax as if no shift occurred.

•

The report also claimed that new taxes on health insurers and drug and device manufacturers would drive up costs and then premiums. The Congressional Budget Office estimates that the impact of those new taxes on the cost of premiums bought on the exchange would be about 1 percent.

And the report contends that the Finance Committee bill’s sharp slowdown in Medicare payments to health care providers would cause those providers to charge more to privately insured patients, driving up premiums. That conclusion is disputed by many analysts, in part because many of the rate reductions are designed to prod providers to become more efficient and absorb the reductions without passing them on.

The report, notably if predictably, makes no mention of other valuable benefits from health care reform: the fact that all workers would benefit from greater security (knowing that they can buy insurance if they get laid off) and greater ability to change jobs without worrying about loss of coverage.

Finally, the report makes no mention of the legislation’s efforts to find ways to rein in the relentless spiral of health care delivery costs — the main culprit in today’s spiraling premium costs. In the long run, those reforms should reduce the cost of insurance for everyone.

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Polls: Americans want healthcare reform at no cost to them

Polls show that Americans’ views on healthcare reform are complex – and often contradictory.

By Mark Trumbull - Staff writer - The Christian Science Monitor

Democrats in Washington are navigating treacherous electoral terrain as they craft healthcare reform legislation, judging by new polls that show Americans pulled by conflicting desires on healthcare.

They are eager for change but hesitant about paying for it.

That’s the tricky context as Congress takes steps toward possible passage of a sweeping reform of health insurance. On Tuesday, members of the Senate Finance Committee approved a proposal crafted by Sen. Max Baucus (D) of Montana, under which the number of uninsured is expected to drop from 15 percent of Americans to 6 percent.

Asked which healthcare problem was most serious – keeping costs down or covering the uninsured – 59 percent of Americans said providing insurance, according to a CBS News poll. Only 35 percent chose “keeping health care costs down for average Americans.”

Dollars and cents a dealbreaker?

But polls have found that such statements can be deceiving. Support for grand plans can tail off when people think in personal dollars-and-cents terms.

A CBS News/New York Times poll earlier this year, for example, asked whether they would support a program that insured all Americans, if it meant higher taxes. Some 57 percent said yes. But when the poll specified an annual tax hike of $500, support dropped to 43 percent.

That is only one aspect of Americans’ complex – and often contradictory – views on healthcare reform. Others, collected on the website Polling Report, include:

• A majority of Americans say fundamental reform of the healthcare system is needed. In addition, nearly one-third say the system is so badly broken it should be scrapped and completely rebuilt. Only 15 percent say minor changes will suffice, according to the CBS news poll, taken Oct. 5 through 8.

• A sizable majority says Republicans aren’t making a good faith effort to work with Democrats toward reform, yet a nearly equal number (57 percent) say Democrats shouldn’t pass a bill that lacks bipartisan support, according to a Quinnipiac University poll completed Oct. 5. It remains unclear whether any Republicans will support final legislation, although Sen. Olympia Snowe (R) of Maine supported Senator Baucus’s plan Tuesday in the committee vote.

• A majority supports key details of some of the plans before Congress – including the mandate to buy insurance and a possible “public option” alternative to private insurance firms. But when asked simply whether they support “health care reform plans being discussed in Congress” or “the way Barack Obama is handling health care,” support falls below 50 percent, according to an Associated Press/Gfk Roper poll survey that concluded on Oct. 5.

America the skeptical

The Senate Finance plan and others in Congress would all require Americans to buy insurance, while providing aid for those with modest incomes and exemptions for some middle-income households who can’t afford coverage.

President Obama has demanded that reforms should avoid adding “one dime” to the federal budget deficit over the next decade. But healthcare experts generally say the bills in Congress would have at best a modest impact on fast-rising medical inflation.

While Americans want reform, they are skeptical of what it will mean, the new CBS News poll shows. Thirty-one percent of Americans believe the legislation under review will hurt them personally, while only 18 percent say it will help them, and 45 percent see a neutral impact.

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A Better Way to Health Reform

By Martin Feldstein - The Washington Post

The American health-care system suffers from three serious problems: Health-care costs are rising much faster than our incomes. More than 15 percent of the population has neither private nor public insurance. And the high cost of health care can lead to personal bankruptcy, even for families that do have health insurance.

These faults persist despite annual federal government spending of more than $700 billion for Medicare and Medicaid as well as a federal tax subsidy of more than $220 billion for the purchase of employer-provided private health insurance.

There’s got to be a better way. And it should not involve the higher government spending and increased regulation that characterize the proposals being discussed in Congress.

A good health insurance system should 1) guarantee that everyone can obtain appropriate care even when the price of that care is very high and 2) prevent the financial hardship or personal bankruptcy that can now result from large medical bills.

Private health insurance today fails to achieve these goals. It is also the primary cause of the rapid rise of health-care costs. Because employer payments for health insurance are tax-deductible for employers but not taxed to the employee, current tax rules encourage most employees to want their compensation to include the very comprehensive “first dollar” insurance that pushes up health-care spending.

A good system should not try to pay all health-care bills. That would lead to excessive demand, wasteful use of expensive technology and, inevitably, rationing in which health-care decisions are taken away from patients and their physicians. Countries that provide health care to all are forced to deny some treatments and diagnostic tests that most Americans have come to expect.

Here’s a better alternative. Let’s scrap the $220 billion annual health insurance tax subsidy, which is often used to buy the wrong kind of insurance, and use those budget dollars to provide insurance that protects American families from health costs that exceed 15 percent of their income.

Specifically, the government would give each individual or family a voucher that would permit taxpayers to buy a policy from a private insurer that would pay all allowable health costs in excess of 15 percent of the family’s income. A typical American family with income of $50,000 would be eligible for a voucher worth about $3,500, the actuarial cost of a policy that would pay all of that family’s health bills in excess of $7,500 a year.

The family could give this $3,500 voucher to any insurance company or health maintenance organization, including the provider of the individual’s current employer-based insurance plan. Some families would choose the simple option of paying out of pocket for the care up to that 15 percent threshold. Others would want to reduce the maximum potential out-of-pocket cost to less than 15 percent of income and would pay a premium to the insurance company to expand their coverage. Some families might want to use the voucher to pay for membership in a health maintenance organization. Each option would provide a discipline on demand that would help to limit the rise in health-care costs.

My calculations, based on the government’s Medical Expenditure Panel Survey, indicate that the budget cost of providing these insurance vouchers could be more than fully financed by ending the exclusion of employer health insurance payments from income and payroll taxes. The net budget savings could be used to subsidize critical types of preventive care. And unlike the proposals before Congress, this approach could leave Medicare and Medicaid as they are today.

Lower-income families would receive the most valuable vouchers because a higher fraction of their health spending would be above 15 percent of their income. The substitution of the voucher for employer-paid insurance would be reflected in higher wages for all.

Two related problems remain. First, how would families find the cash to pay for large medical and hospital bills that fall under the 15 percent limit? While it would be reasonable for a family that earns $50,000 a year to save to be prepared to pay a health bill of, say, $5,000, what if a family without savings is suddenly hit with such a large hospital bill? Second, how would doctors and hospitals be confident that patients with the new high deductibles will pay their bills?

The simplest solution would be for the government to issue a health-care credit card to every family along with the insurance voucher. The credit card would allow the family to charge any medical expenses below the deductible limit, or 15 percent of adjusted gross income. (With its information on card holders, the government is in a good position to be repaid or garnish wages if necessary.) No one would be required to use such a credit card. Individuals could pay cash at the time of care, could use a personal credit card or could arrange credit directly from the provider. But the government-issued credit card would be a back-up to reassure patients and providers that they would always be able to pay.

The combination of the 15 percent of income cap on out-of-pocket health spending and the credit card would solve the three basic problems of America’s health-care system. Today’s 45 million uninsured would all have coverage. The risk of bankruptcy triggered by large medical bills would be eliminated. And the structure of insurance would no longer be the source of rising health-care costs. All of this would happen without involving the government in the delivery or rationing of health care. It would not increase the national debt or require a rise in tax rates. Now isn’t that a better way?

Martin Feldstein, a professor of economics at Harvard University and president emeritus of the nonprofit National Bureau of Economic Research, was chairman of the Council of Economic Advisers from 1982 to 1984.

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Our view on medical care: Insurance mandate without teeth is no mandate at all

Lawmakers undermine effort to achieve universal health coverage.

For people who don’t have auto insurance, the penalties can be severe. In most states, their driver’s licenses can be revoked and their cars impounded. If they cause an accident, they can have their wages garnished to pay damages. This toughness is needed because an uninsured driver can impose enormous bills on other people and on society as a whole.

People without health insurance pose a similar problem. First and foremost, they endanger their own well-being. And when these “free riders” do need major medical care, as many inevitably do, their unpaid bills raise costs for everyone else.

Changing this — by creating an “individual mandate” to buy insurance, and providing subsidies to help lower income people purchase policies — is vital to repairing the nation’s dysfunctional health care system. It is also a requisite twin of another great goal in health care reform: a right to buy insurance without regard to a previous medical condition. With this new right, and without a mandate to buy insurance, people would simply wait until they get sick to buy insurance — an unworkable situation.

Unfortunately, like much else in the current debate, elected officials are having a hard time making tough choices. Witness them now undermining the individual mandate by setting the penalties for not having coverage way too low.

Just Rewards? Healthy Workers Might Get Bigger Insurance Breaks

By Mary Agnes Carey, KHN Staff Writer

Employers and health insurers could give larger discounts to employees who lose weight or lower their cholesterol under a health care overhaul proposal that’s being assailed by AARP, the American Heart Association and other groups that fear it could result in higher premiums for people who don’t achieve those fitness goals.

The discounts are being pushed by Steve Burd, the chief executive officer of Safeway Inc., who has met with several lawmakers on Capitol Hill and says that rewarding healthy behavior has helped keep his firm’s health care costs flat while other companies’ have skyrocketed.

But the proposal, which involves the sensitive issue of how aggressive employers can be in trying to induce workers to change their behavior to reduce their risks of disease, is greeted by skepticism by many patient advocates who think it could be coercive and unfair.

“If you give one person a discount, someone else is going to end up paying more,” said Paul Cotton, senior legislative representative, federal affairs, at AARP, one of more than 60 groups that’s fighting the provision. “So the people who aren’t able to change their behavior or participate in the program will end up paying more. Our fear is that premiums will become unaffordable for people who can’t change their behavior.”

Under current law, employers and insurers are permitted to give discounts of up to 20 percent on premiums, co-payments or deductibles to workers who take part in wellness programs, which include anti-smoking and weight-loss programs. Some wellness programs simply require participation in order to get the discount but other programs require employees to reduce their weight, blood pressure or cholesterol by specific levels.

Health care overhaul legislation passed by the Senate Health, Education, Labor and Pensions Committee would allow employers to increase those discounts to 30 percent and up to 50 percent if the secretaries of Labor, Health and Human Services and Treasury agree. A House proposal would allow employers to charge workers who participate in wellness programs 50 percent less than workers who don’t.

Proponents say the measure would improve health and lower costs, and that workers who can’t hit specific targets could seek a medical exemption. “There is significant savings and significant positives to encouraging people to live healthy lifestyles and reward people monetarily for doing it,” said Sen. Judd Gregg, R-N.H., a co-sponsor of the amendment to the health committee bill. “That’s just common sense and we should do it. If you create a healthier workforce by incentivizing healthy lifestyles you reduce the overall cost of health care for everyone.”

But critics say the efforts raise big questions about privacy and fairness. They note that corporate wellness programs often administer surveys that ask employees personal questions. One survey, for example, asks how often in the past week the individual had crying spells, was depressed, or felt that “people disliked me.”

The groups fighting the provision say that while many employees might want to exercise and eat right, some might find that work schedules and family commitments prevent them from making the lifestyle changes needed to improve health. Lower-income workers, in particular, might not be able to afford gym memberships, even with employers’ subsidies.

“We are very concerned that individuals not be penalized – either financially or by exclusion from coverage or services – if they are sick or if they presently engage in specific behaviors or have certain health conditions, such as smoking or obesity,” the groups wrote to Congress.

Groups signing the letter include the American Diabetes Association, the American Lung Association, the American Federation of State, County and Municipal Employees and the American Cancer Society Cancer Action Network.

Some health advocates are more comfortable with linking financial incentives to other factors, such as refilling prescriptions or monitoring blood sugar on a regular basis, as opposed to meeting a specific fitness target. “Once you get into paying more for specific outcomes, for many people that does cross over the line,” said Ken Thorpe, executive director of the Partnership to Fight Chronic Disease, a coalition whose members include groups representing patients, health care providers and business and labor.

Employer groups are urging lawmakers to increase the level of discounts in premiums, co-pays and deductibles they can give to workers who participate in wellness programs. “The value of health insurance premium discounts or rebates to promote employee participation in wellness programs has had and will continue to have a cost savings effect on multiple levels for our health care system,” the groups, which include the Business Roundtable and the U.S. Chamber of Commerce, wrote to members of the House Energy and Commerce Committee. “They clearly motivate healthy behaviors as well as reduce health care costs.”

A Senate GOP aide said the amendment includes language to prohibit any discrimination against individuals who cannot attain a specific fitness goal due to medical reasons or other factors. Anyone who feels they cannot meet the standards can request a waiver or an alternative standard from their employer. An employer can also ask for a physician to certify that an employee has existing medical conditions preventing them from meeting a specific health goal. The programs must be “reasonable” and not “overly burdensome,” and open to all employees and participation must be voluntary.

Safeway’s Burd, whose company has given financial incentives to non-union employees to lose weight, cut tobacco use and reduce blood pressure and cholesterol levels, has said that obesity and smoking rates among employees in the voluntary program are roughly 70 percent of the national average. For the last four years, Burd has said, his company’s health care costs have been flat “while most American companies’ costs have increased 38 percent over the same four years.”

By Safeway’s calculations, “if the nation had adopted our approach in 2005, the nation’s direct health-care bill would be $550 billion less than it is today,” Burd wrote in a June 12 op-ed in the Wall Street Journal. Critics of Burd’s data have said they have has not been independently verified. A Safeway spokeswoman acknowledged that there has been no independent analysis, but “we were able to see savings clearly and immediately the first year we implemented the program.”

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How Healthcare Reform Could Get You Hired

New opportunities could open up for workers—and employers

In the debate over healthcare reform, references to outcomes mostly have to do with patients. But the impending overhaul of the health insurance system may lead to very different outcomes in employment. That’s because health insurance coverage seems to guide the career choices of many older workers—and healthcare costs can guide the decisions of many employers.

If healthcare reform makes insurance much more affordable to individuals and businesses, it could result in a greater variety of career options for workers. For one thing, it would reduce barriers to entrepreneurship. Reform also could make it easier for workers to leave employers to whom they are “job-locked,” or committed to solely for health benefits—a situation more common to older workers and those with pre-existing conditions.

It also could ease one of the greatest obstacles to older workers’ job searches—even more pressing after nearly two years of recession and rocketing unemployment rates. “One of the long-standing barriers to hiring elderly workers is healthcare costs,” says David Autor, an economist at the Massachusetts Institute of Technology. Because rates are higher for smaller employers, “if that concern were taken off the table,” it would be easier for more businesses to hire older workers, Autor says.

Some employers worry about the potential for higher healthcare costs when hiring an older worker—although in most cases, a worker who’s 50 or older will be more productive than someone younger who has less on-the-job experience, according to a 2005 report by the human resources and financial consulting firm Towers Perrin, prepared for AARP. Although it’s unclear what precise shape healthcare reform will take, President Obama has insisted it will reduce the expense of benefits for small business. Last year, fewer than half of businesses with between three and nine employees offered health benefits, compared with 99 percent of businesses with 200 or more employees, according to the Kaiser Family Foundation.

A disadvantage. Small businesses pay as much as 18 percent more than large firms for the same health insurance policy, according to the president’s Council of Economic Advisers. Employees at small businesses also tend to get leaner benefits packages and pay higher deductibles. “Small firms are likely to be at a competitive disadvantage in the market for hiring workers,” according to the council’s report. While Obama’s goal may be competitive parity, opponents to existing healthcare reform legislation have argued that payroll taxes to pay for more affordable healthcare or mandates for levels of coverage could be prohibitive for small businesses.

Joanna Lahey, an economics professor at Texas A&M University, says there is little empirical evidence that proves insurers charge employers more in premiums for older workers—insurers don’t exactly publicize their actuarial algorithms—but older individuals are charged more on individual plans. It would appear that older workers tend to accept lower wages in return for greater health insurance compensation. In New York, for example, after a law was passed prohibiting insurers from charging rates based on age, older workers’ wages shot up.

Lahey’s research finds that older workers often make new choices in employment when they are covered by insurance that is not provided by an employer. Her study looks at employment changes that occurred after the Department of Veterans Affairs decided to cover all veterans. Less-educated veterans were more likely to drop out of the workforce or work part time, while more-educated veterans were more likely to strike out on their own. Lahey suspects that if a public option in health insurance is good—in quality and price—there might be a similar effect.

This would, in general, be a good thing for the economy. Workers who choose to stay with employers merely to receive health insurance are not ideal for employers, who benefit more from motivated and productive workers. At the same time, workers are not helped by staying in jobs so they can maintain their coverage. There is what Lahey describes as a “loss of well-being” when, say, an older worker is ailing but continues to work until he or she reaches 65 and can be covered by Medicare. Yet many workers, particularly low-income ones, feel that’s what they have to do.

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