Rahm Emanuel v. The Chamber of Commerce

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I happened to have an interview scheduled today with the White House Chief of Staff, and caught him at a moment when he was feeling pretty amused by a report in this morning’s Washington Post. That, of course, would be the one suggesting that the U.S. Chamber of Commerce would pay $50,000 to a “respected economist” willing to come to a pre-ordained conclusion that health reform legislation would kill jobs.

“Now I know the price for a tenured economist,” Rahm Emanuel chuckled. “I’ve come to the conclusion that they’re firm in their opinions. It’s their principles that are flexible.”

Emanuel pointed to another report that is already out–one that the White House touted when it was released last week. This is the Business Roundtable’s study, conducted by the consulting firm Hewitt Associates, finding that the “right legislative reforms” could actually save employers $3,000 per worker by 2019. What should scare business, the study said, is doing nothing:

In a report for Business Roundtable (BRT) titled “Health Care Reform: The Perils of Inaction and the Promise of Effective Action,” Hewitt pointed out the potential benefits of revamping the nation’s health care system, if done wisely, and the pitfalls of inaction. Access concerns have rightfully been a big focus of recent national debates. However, for the 98 out of 100 companies (with 200 or more workers) that already provide coverage1 and for their employees, rising health care costs are the primary concern. The current health care system continues to push spending upward at a pace faster than the growth in the overall economy. If U.S. companies are to remain competitive in an increasingly global marketplace, we must do more and do it faster to bring down the rate of increase in health care costs.

Without fundamental reform, there is little reason to expect that cost increases over the next 10 years will be different from the recent past. If the cost trends of the past 10 years repeat, by 2019, employment-based spending on health care at large employers will be 166% higher than today on a per-employee basis. This equates to an average of $28,530 per employee when employer subsidies, employee contributions, and employee out-of-pocket costs are combined. We estimate that if enacted properly, the right legislative reforms could potentially reduce that trend line by more than $3,000 per employee, to $25,435. If we are able to enact broader market reforms that eventually lower future cost increases to an average of 4% per year, we could potentially reduce average per-employee costs further to $23,151 per employee by 2019.