By  on April 27, 1994

WASHINGTON -- In the escalating debate over reforming the nation's health care system, there could not be two more intractable opponents than Robert Verdisco, president of the International Mass Retail Association, and Rep. Henry Waxman (D., Calif.).

As the chief representative of mass-market retailers, Verdisco refuses to concede that employers should be required to pay most of their employees' health premiums.

As an advocate of employer mandates since 1987, Waxman is just as committed. He says employers are responsible for making sure all their workers have health care.

As the debate progresses on Capitol Hill, both Waxman and Verdisco are collaring members of the House, seeking support for their positions. The issue is expected to be hot at IMRA's convention here, May 21-24.

Here, the two opponents present their views.

Henry Waxman: Employers Must Pay

WASHINGTON -- In the tempestuous debate on reforming the U.S. health care system, Rep. Henry Waxman (D., Calif.) could not be better positioned as a key player.

He chairs the House Energy and Commerce's Health and Environment Subcommittee and so is charged with advancing the measure through one of the three House committees with jurisdiction.

Waxman's been hammering away on health reform since 1987, when he allied with his frequent partner, Sen. Edward M. Kennedy (D., Mass.), to unveil an plan for national health insurance for millions of uninsured Americans, to be paid by employers and the government.

He was an early sponsor of President Clinton's health reform plan to insure every American, and to pay for it in part by requiring employers to pay 80 percent of the health care premiums for their full-time and part-time workers.

It was up to Waxman to move the President's plan through his subcommittee, but the March 4 deadline passed and no consensus could be reached among the 25 subcommittee members. With Jim Cooper (D., Tenn.) -- the sponsor of a more modest alternative that includes no employer mandates -- on Waxman's panel, that failure wasn't a surprise.

Now, Waxman is working with Energy and Commerce Committee chairman John Dingell (D., Mich.) to round up support for a reform plan written by Dingell. That plan softens some of Clinton's more controversial proposals: It eliminates the statewide alliances and gives small businesses a break in paying for their workers' health premiums.Under Dingell's version, companies with up to five workers would pay a 1 percent payroll tax, those with up to 10 workers would pay a 2 percent payroll levy, those with up to 75 workers would pay 20 percent with subsidies for low-income employees and firms with up to 1,000 workers would pay 80 percent of health care premiums.

"It's important to build on the existing health care system and get everyone insured where they work," Waxman said in an interview. "Employers and employees will have to pay for that. There will be no universal coverage without requiring employers to pay."

And since universal coverage is an unflinching tenet laid down by Clinton, that's the basis of the Dingell and Waxman start. Waxman says the debate over the 80 percent employer contribution is misleading because employers would not be required to pay the full 80 percent for workers covered under a spouse's plan. Also, employers' contributions for part-timers would be based on hours worked

Waxman also points out that the Dingell plan does more than Clinton's to protect small employers, a not insignificant concession when so much money is needed to finance universal coverage.

"No employer is off the hook completely," Waxman said, "but we're trying to do more for small employers."

In response to retailers' complaints that many of their workers are insured by their spouses' or parents' plans, Waxman counters that it's time retailing paid its portion: "Many employers who cover their workers are tired of paying more because other businesses don't pay their fair share." While Dingell says he's still a handful of votes short of winning a majority of committee Democrats to his way of thinking, Waxman will say only that the Dingell version "enjoys substantial support."

He maintains that the ultimate plan will contain employer mandates and advises retailers to get used to the idea.

Robert Verdisco: More Flexibility Vital

WASHINGTON -- While Rep. Henry Waxman is trying to discern how high employer mandates can go without losing so many House votes that health care reform will be unattainable, Robert Verdisco, president of the International Mass Retail Association, is doing all he can to kill the idea of forced employer payments.Verdisco is unbending in his conviction that President Clinton's plan to require employers to pay 80 percent of the premiums for all workers -- both full-time and part-time -- would be an onerous burden on U.S. business, and in particular, on retailers.

"We're working as hard as we can to get our position across," Verdisco said in an interview. "The President's plan would take jobs and the profitability out of U.S. business. If they want jobs to stay in retailing, there can be no compromise."

Verdisco and IMRA reject outright any plan that features employer mandates, even though there are parts of the proposals that retailers favor.

"We have to throw out the good with the bad because the bad is so bad," Verdisco said. "Why should we debate and compromise to make something bad less bad?"

Mandates could cost retailing up to 700,000 jobs nationwide as employers reduce their work force to cut insurance costs, Verdisco said. Also, employers would be forced to eliminate many part-time jobs in another cost-cutting attempt, he said. Verdisco scoffs at the suggestion, often made on Capitol Hill, that retailers raise prices to absorb the higher costs.

"How can they do that in discount retailing?" he asked. "And what does that do to consumers?"

The time to start compromising with Congress will be after the House and Senate patch together their reform versions, probably after Memorial Day.

IMRA is seeking more flexibility in the provision of health care services. The statewide alliances proposed by Clinton, which would be in charge of buying insurance and paying for health care for large groups of consumers, would be too rigid and intrusive, Verdisco said. They also would pose a difficulty for retailers that operate in many states and that would have to deal with different state alliances.

IMRA still hasn't endorsed any of the plans floating around Capitol Hill, but favors proposals put forth by Sen. Phil Gramm (R., Tex.) and House Minority Leader Robert Michel (R., Ill.). Those plans would require employers to offer insurance, but not pay for coverage. They also would allow individuals to have tax-free savings accounts, called Medisave accounts, for medical care.Gramm's plan would allow small businesses to create purchasing pools to cut the costs of health care.

Rep. John Dingell (D., Mich.), along with Waxman, is advocating an alternative plan that does not feature the mandatory alliances, but instead would allow individuals and employers to continue to buy directly from insurers or through voluntary alliances. It also would give small business a break in employee health care costs. But the employer mandates make it unacceptable, Verdisco said.

Verdisco said he does not like the direction the debate is taking: "In the beginning, it was centered on cutting costs. It's evolved into mandating health care for everyone, with no consideration of costs. We could end up with higher-priced health care if we're not careful.

"What are we doing to create incentives for individuals and businesses to hold costs down? That's what we need to do," he added.

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