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Worth Doing

Sen. Edward M. Kennedy’s legislation mandating health insurance for all working Americans has picked up some significant support from American business in initial hearings in Washington. That is a welcome balance to the stubborn opposition from the U.S. Chamber of Commerce to any federal mandate.

Francis R. Carroll, president of the Small Business Service Bureau representing more than 35,000 small businesses, emphasized in his testimony that “this bill is an important step toward making health insurance affordable for small business owners and their employees.” And he underscored three critical elements that critics sometimes ignore: “It is not bureaucratic. It is not a mandate for socialized medicine. Instead, it builds on the strength of America’s private-sector health-insurance system.”

Among the other advocates were spokesmen for two major corporations, American Airlines and Chrysler, both deeply concerned about the disadvantages imposed on their companies by the present system through which the companies that provide health insurance also indirectly subsidize the health care of workers of enterprises that provide no protection.

Robert L. Crandall, chairman and president of American Airlines, said that his airline had been placed in a difficult competitive situation since Continental Airlines used the bankruptcy law to abrogate its labor contracts and subsequently “reduced or eliminated most employee benefits, including company-paid health benefits.” He said that “as a result of the reorganization Continental’s wage and benefit costs are now about half those of many other airlines.”

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Walter B. Maher, director of employee benefits at Chrysler, insisted that “companies like Chrysler, which have already assumed a significant financial responsibility to provide health coverage, thereby alleviating pressures on public systems, should not be allowed to be a dumping ground for other companies’ health bills.”

Dumping is precisely what is happening as a growing number of Americans, now 37 million, find themselves without any form of health insurance, even though most of them have jobs. Their illnesses go untreated until they are so critical that the people enter hospitals through emergency rooms and, faced with staggering costs, leave with unpaid bills--bills that ultimately must be funded by overcharging other patients or collecting public and private money.

Under the Kennedy proposal, all employers would be required to provide minimum health insurance. The insurance would be made available to small businesses at prices competitive with the lower costs that are now paid for large groups through the creation of competing regional insurance pools.

Opponents of the measure argue that it, like an increase of the minimum wage, would result in business failures and overall reduced employment. Karen Davis, chairman of the Department of Health Policy and Management at the Johns Hopkins School of Hygiene and Public Health, argued that the advantages would outweigh the disadvantages. “There is some evidence that suggests a 10% increase in labor costs might result in a 1% decline in employment,” she testified. But she argued that the plan outlined by Kennedy would not be “excessively burdensome” and would be concentrated on a sector of the labor force where job loss is less likely because it is shrinking. Furthermore, arguments that these reforms would affect the international competitiveness of American companies are exaggerated, because most of the companies that would be affected are in the service sector--not engaged in exports.

As Kennedy has pointed out, the majority of businesses--including small enterprises--already provide health insurance equal to or better than the basic protection that would be mandated by the legislation. Essentially, he added, the legislation “simply extends the current American system of employment-based health insurance to millions of families that are now unfairly excluded.” That is something worth doing.


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