Chamber’s Shift: All Firms Should Insure Workers

The U.S. Chamber of Commerce, in a major policy shift, said Monday that all businesses should be required to provide health insurance for their workers.

The giant trade group, which represents 215,000 firms of all sizes throughout the United States, until recently had been a determined opponent of proposals for mandatory coverage, but it is now convinced that universal coverage is an essential and unavoidable component of health care reform.

“It’s a big change” for the chamber, said Robert Patricelli, chairman of the organization’s benefits committee, which met Monday at the White House with President Clinton’s policy adviser, Ira Magaziner, to present the business group’s plan.

“Employers have to step up to their responsibility,” Patricelli said at a news conference. The chamber said it would want government to help with subsidies for firms with low-wage workers to partly offset the cost of required coverage.

The shift in the chamber’s position should prove a significant political boost for the Clinton Administration, which is developing a plan that calls for universal coverage. With its widespread membership in every state, and with 96% of member firms having fewer than 100 workers, the chamber’s action is likely to give new respectability in the business community to the idea of mandated coverage.

As the May deadline approaches for announcing the Clinton plan, powerful interest groups such as the chamber are maneuvering to become players in the hottest political game in town and to avoid antagonizing a popular President. Last week, the American Medical Assn. reversed longstanding principles and said it could live with a spending cap setting national or state limits on total health care spending.

Until Monday, mandatory coverage was backed by just one segment of business, a group of very large firms, including some companies in steel, autos, groceries and retailing. Those companies have big payrolls, an older-than-average work force and large numbers of retirees with comparatively generous health benefits. The companies are eager for the government to make their competitors offer health care too.

“It is truly heartening to see the chamber join in the search for a practical solution,” Sen. John D. (Jay) Rockefeller IV (D-W.Va.) said Monday. “They are no longer simply defending the status quo but are now willing to discuss their own responsibility to help shoulder the burdens of reform as they share in the benefits.”

Rockefeller, one of Congress’ health care experts, wants other groups to join what he considers a Clinton bandwagon, and he criticized holdouts opposed to mandatory coverage as “ideologues and theologians.”

“As the cost of inaction mounts, the cause of reform gains momentum,” he said.

Despite Rockefeller’s praise for the chamber, groups representing the small-business community vowed to keep fighting efforts to require businesses to provide health insurance.

“There is no way our members would go along with a mandate; it’s anathema to them,” said Terry Hill, a spokesman for the National Federation of Independent Business, whose 650,000 member firms typically have 10 to 15 workers. “The mandate is a line we will never cross. It’s a matter of economics as much as it is principle for the members.”

Small-business owners fear that a mandate would open the door to ever increasing costs for insurance, because they do not believe the government can find effective methods to control health care inflation, Hill said.

In California, voters last year decisively rejected a ballot initiative calling for mandated insurance coverage. “Our exit polls showed that voters wanted health insurance, but they were concerned about the effect any plan would have on the economic stability of the state,” said Martyn Hopper, the federation’s California director in Sacramento.

“Voters felt the first line of attack should be on cost containment rather than a blanket program mandating insurance,” he said.

An estimated 36 million Americans lack health insurance. The vast majority are full-time workers and members of their family. Typically, these workers are employed at small firms, often at comparatively low pay.

It would cost $30 billion to $40 billion a year to provide coverage for these people, and the political arguments will revolve around how this new burden should be apportioned between business and the general taxpayers.

In Los Angeles County, 2.1 million of the total population of 8.9 million in 1990 was “medically underserved,” either lacking insurance entirely or too poor to have adequate coverage, according to a report Monday by the National Assn. of Community Health Centers.