Monday, February 12, 2007

Death, taxes, now healthcare charges

With almost two years until the presidential election, the race is way too distant to handicap. But few political bookies would bet even now against an upsurge in restaurant labor costs after we round the bend into 2009. Regardless of who wins the Oval Office, the industry will likely foot a considerable bill for extending health-insurance coverage to more Americans. Or at least it seems unavoidable given the current field of candidates.

John Edwards, an aspirant for the Democratic nomination, unveiled a plan last week that would hit employers with a 6-percent payroll surcharge if they don’t offer coverage to employees. The contender he has to beat, Hillary Clinton, is the queen of healthcare mandates, and has championed similar pay-or-play provisions in the past. Barack Obama, the other big brand in the Democratic contest thus far, says he wants coverage to be universally available by 2013, but hasn’t detailed how the cost will be covered.

Don’t expect the Republicans to give restaurateurs and other employers a pass. Mitt Romney, the former Republican governor of Massachusetts, will likely tout the universal insurance plan he pushed onto the books of that state. It mandates citizens to get insurance, rather than obliging businesses to provide it. But to subsidize the cost for Joe or Joan Public, employers have to pay a per-head fee of $295 for every employee they don’t insure.

Then there’s Ah-nold’s model for California. Schwarzenegger isn’t expected to run for his party’s ticket, but plenty of admiration has been voiced for his plan, which calls for a 4-percent payroll surcharge for most restaurants.

Newt Gingrich, once the Doberman guarding businesses against staggering health-insurance mandates, is sounding far more like a Pekinese these days in his discussions of healthcare reform. He’s even appeared on stage with Clinton, literally, to promote healthcare measures they both champion. Once, the two presumably couldn’t agree on how to spell “healthcare.” Not coincidentally, pundits say Gingrich is evaluating the possibility of seeking the Republican presidential nomination. The former Speaker of the House has not renounced his dislike of employer mandates as a means to universal insurance coverage. But he’s sounding a lot more middle-ground-minded these days.

Sure, several of the more formidable presidential aspirants, including John McCain, have yet to bay for the sort of sweeping healthcare reform that would necessitate a significant contribution from employers. But the political climate coloring the presidential race, even at this extremely early stage, suggests the industry may have to pay a significant cost to help protect the 47 million Americans whom experts say do not have health insurance. The question is, how much.


  1. Healthcare seems to be one of those dirty little secrets that we don't want to admit, but has really been a major issue for a long time. President Clinton tried to make reform his platform in his first election and failed. And now it is rearing its ugly head again. This is not simply the flavor of the day for the pundits inside the beltway. This is a real cost that the industry must bear to sustain the longevity of the industry as a whole.

    If the restaurant industry wants to attract the best and the brightest into the fold, it needs to take care of its own. Starbucks is one of the shining examples of corporations that get it by offering full healthcare benefits to part-time employees. But these are the exception instead of the rule.

  2. Maybe the real culprits in the whole mess aren't the politicians who want to saddle employers with benefits responsibilities, but rather the insurance companies that will remain middle-men in the costly morass that is health care. Insurers should exist to sell protection against calculated risks, like whether a fire will destroy my business, or what year I might die. But in some ways health care can be seen as an ordinary expense, like buying groceries, so why do penny-pinching actuarial corporations that wastefully reap extraordinary profits get to siphon so much lucre away from ordinary people and doctors?