Business Groups and Union Make Strange Bedfellows in Individual Health Mandate Push

Published May 1, 2008

The National Federation of Independent Business (NFIB) has been a stalwart defender of health freedom. But its recent association with two activist liberal groups is raising eyebrows.

NFIB was a leader in the 1990s in explaining to the American people the loss of freedom posed by the Clinton health reform initiative. It even produced the famous “Harry and Louise” ad raising questions about the restrictions and complexities of the plan.

But something has changed 15 years later. NFIB has joined the American Association of Retired People (AARP), Service Employees International Union (SEIU), and Business Roundtable in a campaign called “Divided We Fail.”

NFIB says the campaign provides a national platform to talk about why small business is so important to America and why rising health costs continue to be the number one concern of small businesses. The Business Roundtable sees it as a way to “catalyze new thinking” about high health costs.

Government Takeover

Those goals sound commendable enough, but it’s important to look at the agendas of these other strange bedfellows, especially SEIU. The union representing one million service workers, primarily in hospitals and hotels, is working to build a number of coalitions to advance its agenda.

And what is that agenda?

SEIU’s “Vision for Reform” calls for “a universal health care system” with “guaranteed affordable health coverage for all Americans” and a “core health care benefit similar to the one that is available to federal employees.”

The union plans to spend $75 million this year on its grassroots advocacy campaign and attempt to influence the presidential election, which includes paid advertising and a nationwide tour.

The business groups allied with SEIU may have a different vision that incorporates more free-market principles, but are they prepared to spend $75 million to promote it? If not, they risk getting used in this effort.

Principles in Danger

NFIB and the Business Roundtable are not alone in their involvement in this strained coalition-building: Wal-Mart, Intel, General Mills, and AT&T, among others, announced last year they are working with SEIU to “overhaul the country’s broken health care system.”

“When this many different perspectives unite around a common goal, it makes very clear that health care reform is achievable,” they announced in a May 8, 2007 release.

Maybe. Maybe not.

I absolutely believe in coalitions and am a facilitator and supporter of many conversations among people from different ideological perspectives seeking consensus around core ideas. But there must be some common philosophical ground for a conversation or you wind up with an unworkable mismatch of policy.

It is crucial that principle and policy not be lost in a misguided attempt at reaching an artificial agreement that can’t possibly hold up when writing new laws.

Attempt to Deceive

The 2008 election will provide a clear contrast between two different philosophies of health reform, as I noted in a January 29 Wall Street Journal piece. Pretending there is a middle ground between a much-expanded role for government in our health sector and a properly functioning, patient-centered free market is nothing more than an attempt to deceive voters.

NFIB surveyed its members and found more than half support an “individual mandate,” a law requiring individuals to purchase health coverage. Therein lies their support for universal coverage.

But do they understand that an individual mandate immediately morphs into an employer mandate, which NFIB adamantly opposes, because employers will be required to pay a government-determined share of the premiums? Is this the compromise NFIB is prepared to make?

If businesses think an individual mandate is going to make their health care problems go away, they should think again.

Beyond 1994 Plan

Even Hillary Clinton criticized an individual mandate in 1994, saying, “The individual mandate … makes it very difficult to determine and monitor who is in the system and who is out. It would require tracking individuals as they move in and out of jobs, as they move in and out of the insurance market. It would require, in our view, the IRS to engage in an enormous administrative oversight of our health care system.”

This position is completely at odds with Clinton’s current health care proposal, which features as one of its main aspects an individual mandate enforced by governmental wage garnishment.

More Laws, Regulation

And NFIB’s measure for controlling costs? “Laws, regulations, and insurance arrangements should direct health care spending to those goods and services that will maximize health.”

What? Do the nation’s small businesses really want more laws and regulations over health care?

The affiliation with SEIU should be causing heartburn for NFIB and Business Roundtable members. SEIU boasts of its work in helping pass the Massachusetts and Maine health care re-engineering efforts and in crafting and helping pass a Maryland bill requiring Wal-Mart to spend at least 8 percent of its payroll on health insurance.

The anti-Wal-Mart legislation was overturned by a U.S. district judge as a violation of the Employee Retirement Income Security Act (ERISA), the 1974 federal law restricting government regulation of employee benefit plans.

Now that is certainly a business-friendly record for NFIB and the Business Roundtable (which has been less involved in the health debate in the past) to associate themselves with!

Dangerous Liaison

Certainly businesses want urgent action on health issues, but the agenda of SEIU and AARP, which has been lobbying for more government control over health care and pharmaceutical pricing, is very much out of sync with freedom in the choice of private health insurance and competitive market forces to bring down costs. That is the conversation we need to be having.

Principles matter. This coalition compromises the business organizations’ ability to educate the electorate about free-market solutions in health care.

Let’s hope other such organizations don’t follow suit.

Grace-Marie Turner ([email protected]) is president of the Galen Institute.

For more information …

“The GOP’s Prescription for Health Care,” by Grace-Marie Turner, The Wall Street Journal, January 29, 2008: