This week, the House of Representatives will once again vote on a bill that has little prospect of passage in the Senate and has zero chance of being signed by the President if it were to succeed. By some counts, this is the 37^th time Congress will hold a vote to repeal the Patient Protection and Affordable Care Act (ACA). So if everyone agrees that it is likely to fail to become law, why should anyone care?

The NAM did not support the ACA when it was passed by Congress and signed by the President three years ago. Generally, implementation of the law over the past three years has been disappointing. As we reach the mid-point of 2013, the implementation process has become downright alarming, which is no doubt a factor behind the vote the House of Representatives will take on Thursday to repeal the ACA.

In less than five months, beginning on October 1, 2013, Americans are supposed to have access to health insurance through state exchanges that meet the criteria set out by the ACA. Some states are setting up their own exchanges and some are just letting the federal government do it, but that’s not really the issue that’s sounding alarms and feeding anxieties among consumers and businesses alike.

With less than five months before this program goes live, there is a lot we don’t know:

-          What products are available?
-          What are the prices for those products?
-          How do consumers get coverage?
-          How much will the federal subsidies cover?
-          How do we compare plans offered?
-          Who do I call with questions?
-          What is the impact on employer-sponsored coverage?

We don’t seem to be getting very many answers from the department in charge of putting this thing together- unless you consider planning a major public relations campaign an acceptable strategy for implementation. Most people don’t have confidence a public relations campaign will do the trick.

Ultimately, that’s the meaning of the vote being taken by the House of Representatives on Thursday – it is a vote of no-confidence. It is a firm and unambiguous statement of position on a major revision of federal law that will be confronting us not only in the months ahead, but also for many years to come. That is why the NAM supports a piece of legislation that has failed 37 times – and why everyone else should be paying close attention too.

Joe Trauger is vice president of human resources policy, National Association of Manufacturers.

Healthcare costs are constantly on the minds of manufacturers. Almost three fourths of the companies responding to a recent NAM survey said rising healthcare insurance costs are a primary business challenge for them. So we’re glad to see that these concerns are resonating in Congress where House Small Business Health and Technology Subcommittee Chair Chris Collins (R-NY) today held a hearing to take a look at the impact on small businesses of the new fee on health insurance fee, set to kick in next year.

The fee, which was included in the healthcare reform law, will raise some $100 billion from health insurance providers over the next ten years. And since many small businesses obtain their employees’ health care coverage from these insurance companies, these additional fees are likely to be felt in premium costs. Indeed, the fee could raise the cost of employer-sponsored insurance by 2 to 3 percent in 2014, imposing a cost of nearly $5,000 per family by 2020 according to a study released earlier this year by the National Federation of Independent Business Research Foundation.

Fortunately, Congress still has an opportunity to avert this crisis before it starts. On the House side, Rep. Charles Boustany has introduced bipartisan legislation –H.R. 763 — to repeal this annual fee on health insurers and a similar bill — S.603—has been introduced in the Senate by  Sen. John Barrasso (R-WY). Manufacturers urge lawmakers to repeal this job killing tax ASAP.

President Obama released his proposed budget this morning and within it we see some of the same worn out health care ideas that have been rejected in the past. One in particular would require rebates from pharmaceutical companies for the products sold to Medicare beneficiaries who are also eligible for Medicaid. The President’s budget claims $140 billion in savings would be generated by implementing such an idea, but it puts Part D on the path of other government programs that haven’t served beneficiaries or taxpayers nearly as well.

Before Medicare Part D was enacted, these “dual-eligibles” would have received their drug coverage under Medicaid – a program run by states for low-income individuals. Drug coverage varied from state-to-state and seniors were treated as poor first and seniors second. Part D flipped that around and treats them as seniors first and poor second – while it may not seem like it, that’s an important distinction. It means seniors who happen to be lower-income can participate in the same program their wealthier cohorts participate in and receive the same level of benefits whether they live on the East Coast or in the Mid-West.

Applying a rebate scheme based on reverting back to treating seniors as low-income first is bad policy and something the NAM has opposed in the past and will continue to oppose in the future. Medicare Part D is working well for seniors and taxpayers – we should be looking to export some of the lessons we’ve learned about how the private market can help reduce costs rather than import the command and control mechanisms of an overactive government.

We were pleased to read a bi-partisan op-ed by Senator Orrin Hatch (R-UT) and Congressman Jim Matheson (D-UT), who have recently introduced legislation to repeal the Health Insurance Tax (HIT) provision of the Affordable Care Act (ACA), highlighting the escalating costs of health care on small businesses and the adverse relationship this tax will have on their ability to grow jobs in our economy.

As nearly 70 percent of the NAM’s small and medium-sized manufacturers buy health insurance in the fully insured marketplace, the HIT tax will significantly drive up the cost of coverage which comes on top of the nearly 10 percent average increases in premiums that companies’ experienced last year. While the tax technically falls on insurers, CBO has confirmed that it “would be largely passed through to consumers [small business owners and their employees] in the form of higher premiums for private coverage.”

Manufacturers believe it is critical that Congress take action to repeal the HIT tax to help make health care coverage more affordable and to encourage employer provided health insurance for employees before it goes into effect beginning in 2014.

Among the many Yogi-isms, “This is like déjà vu all over again,” probably applies best to the results of a recent survey released by the NAM and IndustryWeek. The results showed health care costs are, again, the top challenge identified by manufacturers. A close second was “uncertainties related to the political climate”. The Affordable Care Act seems to be the common thread.

Vermeer Health Center

Manufacturers such as Vermeer Corporation offer employees and their families high-quality health plans and benefits, including an onsite health center, pharmacy and wellness incentives that truly contribute to improved health and lower costs.  However, such actions will not be adopted by even well-intended manufacturers in the current environment of high costs involved with the implementation of the Affordable Care Act and its uncertainties.

Manufacturers have a high level of anxiety about implementation of the ACA – and rightly so. Health care costs continue to rise at rates well above inflation levels with no sign of abating.  The main pillars of the law take effect in less than 10 months, but much of it needs to be up and running in October – less than seven months from today. Yet, we are only now getting a glimpse of the regulations detailing how things will work.

Manufacturers and businesses generally need predictability to thrive. A complete change in the health care delivery system with a host of known unknowns and unknown unknowns is not a good way to provide that predictability. This leads us to the third most identified concern – the unfavorable business climate due to taxes and regulation. The ACA includes a myriad of new taxes and regulations on all employers, which will continue to be a burden for years to come. A consistent burden of taxes and regulations is not the kind of stability that will create US jobs and help the manufacturing sector.

The great catcher Yogi Berra also said “You can observe a lot by watching.” We’ll be doing quite a bit of that in the coming months too.

The old saying is April showers bring May flowers, but the rain has already started here in Washington when it comes to healthcare regulations being pushed out in 2013. On Friday, the Department of Health and Human Services announced it will release 700 pages of regulations in the next two weeks to implement the Affordable Care Act. I sure hope the healthcare is more affordable than what it costs to print the regulations stemming from the new law, but I guess when a law is nearly 3,000 pages and says “The Secretary shall…” over 1,000 times we should expect that.

The latest reg-dump on Friday covers some important ground on premium-stabilization provisions of the law and they will provide a little more clarity on how much healthcare costs will increase ($65 per policy), but it’s still only part of the overall picture. There are less than seven months before the Affordable Care Act needs to stand on its own and start running. By most estimates, there are at least 10-12 significant rules that have to be worked out before October. This raises an interesting question, what needs to be done? I refer to it as the Regulatory Triple-Lindy, and it has a high degree of difficulty.

In the next 211 days, entirely new data collections and processing systems need to be up and online in order to determine who is eligible for what program and when. Insurers need to know whether their products will pass new federal rules, what their prices are going to be, make contracts with providers and decide which markets to enter sometime before October in order to give employers time to do what they need to do. Small employers need to know what their coverage options cost, what kind of choices they have available to them and how the SHOP exchanges will work before October 1. The public needs to be educated about their options, understand those new products, compare plan options, and choose a plan before January 1 or pay a fine.  All of these things need to fit together seamlessly in order for this to work.

The NAM Human Resources Policy staff will be going through the 700 pages as fast as we can. The forecast for the next 211 days, however, is cloudy, with patchy fog and a 100 percent chance of precipitation – icy conditions are possible in shaded areas.

Employers are beginning to turn their attention to the possibility of paying higher health care costs if states decide not to expand their Medicaid programs in 2014 under the Patient Protection and Affordable Care Act (PPACA). The Medicaid expansion was originally mandated by PPACA but later made optional by the Supreme Court in its June 2012 ruling on the health care reform law. As noted in Monday’s Wall Street Journal, many employers in states that opt-out of the Medicaid expansion could incur an annual penalty under PPACA if they don’t provide health care coverage for lower-paid full-time employees who would otherwise have been eligible for Medicaid coverage.

What the WSJ article is describing at its core is the issue of shifting health care costs from the public sector to employers. States and the federal government have made repeated cuts to Medicaid and Medicare in an effort to reduce spending, ultimately resulting in higher costs for private payers as hospitals and physicians seek to make up the difference from too-low public reimbursements. According to a 2008 Milliman report, the total annual cost-shift to private payers from Medicaid is nearly $40 billion. Further, Milliman estimates that if there was no cost-shift from public to private payers, commercial hospital and physician costs would be 15% lower.

Inadequate funding of public health care programs, like Medicaid, impacts the private sector economy and puts additional strain on American businesses. As states and the federal government continue to debate Medicaid financing decisions, they should focus on preserving sufficient program funding so America’s employers can in turn focus on creating jobs.

Controlling healthcare costs is a serious concern for manufacturers and consistently ranks as one of the top cost drivers for companies. Healthcare information technology (HIT) provides an opportunity to streamline processes, put more power in the hands of consumers and lower costs.  This week, at the Consumer Electronics Show, the intersection between healthcare delivery, consumers and IT is highlighted.  Mobile applications that allow consumers to manage their health and healthcare resources 24 hours a day, such as mobile applications and telehealth capabilities, allow for management of chronic illnesses. These technologies bridge critical gaps in access for some and provide additional flexibility for others. Employers and employees can manage healthcare costs by reducing complications associated with chronic disease, such as diabetes.

In addition, HIT and other technologies can facilitate more informed decisions, greater use of preventative services, assist care coordination, reduce fraud and abuse, improve delivery of services, and generate better overall health outcomes. For example, in-home assessments performed on a tablet, can improve the quality of care by improving care management services and reducing hospital readmissions while also identifying potential issues for patients to discuss with their primary care doctor. These are important issues to health care industry and NAM member United Health Group is one of the companies striving to make the system better.

Dr. Reed Tuckson, Executive Vice President and Chief of Medical Affairs for the United Health Group, said today that the health care technologies they are offering allow patients to utilize information to achieve the goals of their health care plans. Specifically he says that, “Health care cost calculators like those offered by United Health Care Group technologies allows consumers to know the exact price of all their clinical engagement – how much it costs for a procedure, hospital, by clinician, and more importantly, know the quality of the care delivery system. That information made available online allows people to truly participate in and make better medical care choices. We need the NAM to continue to be a leadership force for change that will improve health care for employers and consumers.”

The NAM is committed to continuing that leadership in order to ensure that the 97 percent of manufacturers that provide health benefits remain on the cutting edge. Technological innovation is driving modern manufacturing and can also drive modern healthcare, which provides for better outcomes and reduced costs. The future of healthcare is here and many manufacturers are leading the way by adopting these technologies.

On Tuesday, the NAM and the Council for Affordable Health Coverage unveiled a letter being sent to the Hill on Medicare Part D, the popular and effective prescription drug program for Medicare beneficiaries. The letter was co-signed by over 400 other organizations and urges Congress to dismiss proposals such as applying rebates to the Part D program. The overall message to Congress is: the program is working more efficiently than anticipated, is under-budget, and highly popular – don’t “fix it.”

Proponents of the Part D rebate scheme tell us it is “unfair” because the financially-stressed Medicaid program has a rebate system for prescription drugs. So “in-fairness and consistency” we should apply it to Part D. The problem with this logic is, there is little logic to it. They are completely different programs and they are structured very differently. Medicaid is a classic command and control government program – services are needed and the government will tell you how much you get paid for that service. In contrast, Part D is the government setting the ground rules for a market to develop and allowing the private sector to compete to provide products and services. It is a model Congress should look to replicate, not undermine.

The shortcoming of previous “reforms” of Medicare in 1997, 2000, 2003 and 2005 is they largely focused on payments for the services as a way to meet a budget number and didn’t address the real problem in the way services are delivered. The dials and levers were adjusted, but we avoided looking at whether the machine itself was in proper working order – or even the right machine for the job anymore. Manufacturers constantly look for ways to make things operate more efficiently. Often that means retooling with modern equipment to deliver a higher quality product more efficiently.

I’ll close with a quote from a report issued by the NAM 15 years ago. “The program needs to be restructured, drawing on successful strategies used by the private sector….This includes giving beneficiaries a greater choice of health plans than now available…” The NAM has been urging lawmakers to address the real issues for decades – perhaps we should start looking at new equipment with modern features. Medicare Part D seems like a good place to start the search for a better way.

Yesterday NAM President and CEO Jay Timmons participated in a media teleconference centering around Medicare Part D and the fiscal cliff. Medicare Part D, the popular prescription drug aspect of the Medicare program, has been mentioned in talks about the fiscal cliff and as a way to reduce spending. The message of the call, hosted by the Council for Affordable Health Coverage (CAHC), was to avoid ‘fixing what ain’t broke.’

Medicare Part D is wildly popular among seniors and set to come in at 43% under budget. Additionally studies show that if Part D is altered to impose Medicaid-style rebates, it would raise costs for Medicare beneficiaries, increase costs for employers, and ultimately reduce the availability of medication to seniors. On top of that, 200,000 jobs could be lost in the process.

NAM has joined with 400 other organizations to stand up and tell Congress and the Administration that they should keep the focus on reforming the entitlement programs where it’s so badly needed and to leave programs that actually work alone.

Below you can find the remarks given by Mr. Timmons on the call.

Thanks to the CAHC for hosting this call today. I know there are people on the call who will discuss the specific policy implications of altering the Medicare Part D program, so I’d like to use my time to share some thoughts from the broader perspective of the business and manufacturing communities.

It’s really no secret, and the last campaign bears this out, that every candidate was talking about the importance of manufacturing. America is facing a severe challenge, and taxpayers, businesses and families are looking to our leaders in Washington to provide real solutions that won’t cause additional harm to our fragile economy and end up pushing us off the fiscal cliff.

In the case of Medicare Part D, the so-called solution to extend Medicaid-style rebates to the Part D program will only weaken an entire pro-growth industry, result in higher health care costs and lead to the loss of good, high-paying jobs at a time when America’s employers are already facing way too much uncertainty.

Biopharmaceutical research and manufacturers truly represent one of the most vibrant and dynamic sectors of American manufacturing. All told, they are directly responsible for employing more than 650,000 Americans. The industry also has an extremely high multiplier effect, with studies showing each biopharmaceutical job supports nearly five additional jobs outside of the industry. This is an area of our economy we need to encourage, not punish in order to fix a program that’s not broken and that has helped millions of American senior citizens live longer, healthier lives. As an example, one study estimates that the effect of imposing a rebate onto Medicare Part D, similar to recent proposals, could result in 200,000 jobs lost.

Medicare Part D is an amazing example of a federal government program that is actually working, providing a valuable service that keeps costs down for the taxpayers and for Medicare beneficiaries. The policymakers should hold up the program as an example of how government can do a better job and not use it as a bargaining chip.

Part D already provides significant discounts through competition in the marketplace, and those savings are passed directly on to consumers in the form of low premiums and drug costs. Shifting costs onto employers, Medicaid and beneficiaries will only serve to take money out of the productive private sector at a time when we can least afford it. For this reason, the National Association of Manufacturers today joins with nearly 400 business, patient, provider and veteran organizations in urging Congress not to move forward with a proposal that would damage this very successful program.

There’s no doubt our government needs to make some difficult choices in the weeks and months ahead in order to get us back on the right track.  But putting even more Americans out of work and burdening a program that is actually working shouldn’t be a part of any solution to the fiscal cliff.