Paid Family and Sick Leave for Workers
The president emphasized the plight of the 43 million American workers who do not have paid sick leave. Many of them feel they cannot afford to take a sick day to convalesce after an illness or to care for a sick child. He proposes to mandate that employers provide seven days of paid sick leave to workers each year.
The president didn’t mention that an estimated 100 million workers who have paid sick leave likely don’t get seven days annually. He also didn’t mention that his own advisor Jonathan Gruber has research showing workers themselves wind up paying the cost of mandatory benefits through lower wages.
Thus, if employers are forced to provide seven paid days off of work for every worker, employers will adjust worker pay to compensate for the cost. This will inhibit pay raises, and it will impact paid vacation days. It could even harm the employment prospects of workers most likely to stay home and care for a sick child.
The president should have called for expanding Health Savings Accounts (HSAs) to all workers, allowing them to set aside funds for medical needs. The president could have also proposed allowing workers to use HSAs to compensate for income lost to sick days.
Currently, workers who have HSAs can use funds from their accounts to replace income lost due to sick days. However, this is considered a non-medical use and exposes workers to a penalty of 20 percent, plus ordinary income taxes.
Expanded Coverage in the Health Insurance Exchange
The president touted the fact that millions more people are now covered through employer plans and state or federal health exchanges. Yet, research has shown that the exchange subsidies will cause employers to drop coverage.
Moreover, firms are cutting back workers’ hours to avoid having to provide them with health benefits. Mandatory benefits are not free; workers bear the cost in the form of lower wages. Jonathan Gruber, health policy advisor to President Obama, came to this conclusion in research published in the 1990s. Many of these newly covered individuals were not allowed to choose the coverage they would have preferred.
The PPACA contains structural flaws that will have to be reformed. The NCPA has proposed solutions to correct the ACA’s structural problems. We have also proposed a health policy agenda for the 114th Congress.
Expanded Medicaid Coverage
About 6 million additional people are now covered through Medicaid expansion. Yet, many of them are finding it difficult to find doctors willing to work for the paltry fees state Medicaid programs pay doctors who treat Medicaid enrollees.
Moreover, the NCPA has shown that states have alternatives to expanding Medicaid that will help low-income residents access private coverage for very low fees. Jonathan Gruber also has research showing that 50 percent to 75 percent of new Medicaid enrollees from past expansions were those who dropped private coverage.
The Health Care Economy
The president is correct that health care inflation is as low as it has been in many years. The reason is because an estimated 35 million Americans either have Health Savings Accounts or Health Reimbursement Arrangements. Millions more have high-deductible plans. The average deductible in an employer plan is now around $1,000 — double that for a family plan.
When more people have some “skin in the game” and control more of their medical dollars, doctors and hospitals behave competitively. The president and Congress can build on this cost-conscious behavior. President Obama should make good on his pledge to work with Republicans when they send him bills to reform flaws in the PPACA and reform the U.S. health care system.
The president is correct that every veteran deserves access to high-quality health care when he returns. We should do more — so far, progress has been insufficient to fulfill this promise. Access to quality medical care for our nation’s veterans is inadequate compared to the need.
The VA fails to curb suicide risks, for example. The VA has been plagued by fraud, waste and mismanagement. The system is failing those with post-traumatic stress, mental disorders and traumatic brain injuries. The president should have discussed how his administration would correct these deficiencies. The NCPA has solutions to assist with these problems.
Precision Medicine Initiative
The president’s proposal to expand personalized medicine is laudable. However, the best way to expand personalized medicine is to boost competition in health care. His administration has routinely championed a top-down approach to medical innovation. They believe that engineering can devise the optimal approach to treating disease.
Yet, innovation is best achieved in a competitive marketplace where providers compete to find better solutions and are unobstructed by bureaucratic barriers. Providers — doctors and hospitals — can only achieve this in a marketplace where they are competing to attract consumers’ patronage and when patients control more of their own health care dollars.