Health Care Legislation Could Restrict Job Creation
President Obama continues to push his campaign promises to enact comprehensive health care reform legislation. He has outlined an aggressive timeline with both houses of congress passing legislation before August and then using the August recess to reconcile the bills. Obama’s ultimate goals is to have a bill sign on his desk by October. Despite the complexity of passing the major overhaul of health reform legislation the democratic leadership in congress is working toward keeping the timeline in tact.
The most recent development is the introduction of legislation in the House. The legislation must go through three committees of jurisdiction before it can be considered on the House floor. The legislation introduces mandates on employers, surtaxes on individuals, the creation of a public plan option and limiting the business eligible to be entered into government exchanges. The mandate on employers who do not provide health care could be as high as an 8 percent payroll tax. The tax is imposed regardless of a business’s profitability and could restrict job growth. The proposed surtax applies to all individuals with incomes above $350,000 and ranges from 1 to 5.4 percent of income. This tax is especially troubling as many business are structure as pass through entities and the business taxes are paid at the individual level. Again, this tax could restrict job growth and expansion. Also, the public option in the legislation fails to level the playing field, reform the insurance markets and address the rising costs of coverage. Finally, the “exchange” created in the legislation fails to guarantee business eligibility to enter it. The legislation allows businesses with fewer than 20 employees automatic entry, this could further complicate the small group market which is the same markets which have the greatest problems with rising costs.
The debate in the Senate could be further complicated as two health reform versions are being drafted. The Senate bills contain many of the same concerns. The Senate may take a more pragmatic approach and try and find a bipartisan proposal which may delay consideration of the legislation.
