Bloomberg News

Big Business Wants All or Nothing Court Ruling on Health

March 15, 2012

The U.S. Chamber of Commerce, the leading Washington lobbyist for big corporations, spent $86 million two years ago trying to keep the Obama administration’s health-care overhaul from passing Congress.

Now, as the Supreme Court is set to begin reviewing a key provision of the law, the group’s message is different: If you can’t kill it, don’t maim it, the chamber said in a legal brief filed separately with the court.

The chamber is among lobby groups for large companies caught between their own distaste for the law and the self- interest of members who have won concessions since it was passed. They say that ending the provision mandating that all Americans be insured would increase the cost of the rest of the law. The concern has split the business community, and could aid the law’s defenders, said Neera Tanden, president of the Washington-based Center for American Progress.

“The fact that large businesses, if anything, have been supportive of the bill and are silent on the lawsuit can communicate that it would be highly disruptive to find the individual mandate unconstitutional,'' said Tanden, who helped write the law as an Obama administration official until 2010. “The economic interests are not uniform.”

The suit before the high court also challenges a provision forcing states to broaden their Medicaid programs. It was filed by 26 states and the National Federation of Independent Business, a lobbyist group that represents closely held companies, most of which have 20 employees or fewer.

Big companies that insure themselves were never the law’s target, and have won concessions from Congress and the Obama administration that make the law more palatable, said Steve Wojcik, vice president of public policy at the National Business Group on Health, which also represents large employers.

‘Law Of The Land’

“Our view at this point is it’s the law of the land,” he said by phone. “We’re doing our best to help influence the regulations and regulatory guidance.”

Congress took a contentious piece of the overhaul off the table last year by repealing a tax-compliance requirement that would have required businesses starting in 2012 to report more transactions to the Internal Revenue Service to prevent underreporting of income.

The Obama administration has also eased requirements, including one that would have made companies report the value of health benefits to workers on annual tax forms. The provision was delayed a year, to apply to the 2012 tax year instead of 2011, and the calculation was simplified.

“In some regards, they have shown some flexibility and in others they’ve gone beyond the statute,” said Katie Mahoney, executive director of health policy for the chamber.

Broad Ruling Undesirable

Now, interest groups representing large corporations -- including the chamber, Wojcik’s organization and the Business Roundtable -- are more concerned a ruling by the justices that strikes down the provision mandating insurance for all, without overturning the part that compels costly coverage for the sick, will cause insurers to raise the price of their coverage.

The chamber hasn’t argued that the mandate to buy insurance is unconstitutional, the focus of small businesses and 26 states that sued the government. Instead, it argues that the mandate to purchase insurance is not “severable” from the rest of the law; if the mandate falls, the entire measure must go with it.

The chamber agrees with the administration “that the individual mandate is critical to the law” and shouldn’t be struck down by itself, Mahoney said by phone.

That leaves the small business federation as the leading corporate foe of the law. The lobbying group has allied itself with states that are pressing a constitutional challenge to be argued March 26 to 28.

Mandate Unaffordable

The group’s members say they can’t afford the law’s requirement that companies with more than 50 workers provide health coverage or pay fines of $2,000 per employee starting in 2014.

Small companies have to pay insurers more to cover their workers and can’t always provide as generous benefits as big businesses, said Karen Harned, executive director of NFIB’s Small Business Legal Center in Washington, in an interview.

Large employers “are not going to be subject to as much of the negative consequences as our small-business owners will,” she said by phone. Still, she said, “I kind of thought they’d be more outraged.”

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net.

To contact the editor responsible for this story: Adriel Bettelheim in Washington at abettelheim@bloomberg.net.


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