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Health care reform will hurt, say major corporations.

A survey of 57 large corporations conducted by Buck Consultants, Inc. found most were deeply dissatisfied with national health care reform initiatives. A majority of those polled (54%) said mandating health care benefits would hurt their organizations. Only 18% said it would help and another 18% believed it would have no effect on their companies. The rest had no opinion.

The corporations were particularly distributed about the possible effect of a new payroll tax to fund a national health insurance system. When asked about the long-term impact of such a tax, 75% of the respondents said they would decrease the level of medical benefits, 47% said they would reduce other employee benefits and 35% said they would decrease the number of employees. None of the respondents thought a new payroll tax would lead to increases in the levels of medical or other employee benefits or in the number of employees.

Even if the tax exclusion for employer-paid health care was limited under a national health plan, a majority (52%) of the respondents would continue to offer benefits at current levels. Another 11% would cut health care benefits to the basic level and substitute higher wages for benefit cuts. Another 11% would cut benefits without substituting higher wages, and the remainder would resolve the problem in other ways.

Maribess L. Miller, a partner specializing in health care at Coopers & Lybrand, Dallas, thought union contracts mandating certain health care levels probably accounted for the willingnes of a large proportion of respondents to maintain their current levels of health care benefits.

In the national health care plan made reasonably comprehensive coverage available to retirees, 29% of the companies polled said they would drop retiree coverage but pay part of the cost of coverage under the plan. Only 17% said they would maintain current coverage levels for retirees. Another 17% said they would reduce retiree coverage, and 7% said they would drop it altogether. The rest were still undecided. Miller said companies appeared to be looking for ways to reduce the liability for funding retiree medical cost by "dumping them on the government."
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Nov 1, 1993
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