Sick About Health Care

Employers and Politicians Struggle to Find Solution

Alarmed by his company's escalating health insurance costs and a frightening scarcity of remedies, Ford Motor Co. chief executive William C. Ford Jr. declared in December that the nation needs an entirely new health care system. Then he tapped Ford's vice chairman to craft a proposal to develop one.

"I just think that as a country, if we have a model that isn't working and a model that's driving jobs overseas, then we'd better take another look at it," Ford said.

Yet in a presidential election year, when rising health care costs are climbing up the agenda, Ford -- like the rest of the business community -- remains spooked by the prospect of a "Washington solution" to its spiraling costs and has studiously shied away from the political arena.

From the largest corporations to the smallest mom-and-pop shops, business executives identify double-digit increases in health insurance costs as perhaps the biggest threat to their bottom lines and their future. Yet beyond their vocal complaints, businesses have been strikingly absent from the burgeoning political debate and largely unwilling to take sides.

Business groups large and small say neither political party has embraced proposals that will truly bring down spiraling costs.

"Employers always stand to lose, everyone stands to lose, when health care becomes politicized," said James Klein, president of the business-backed American Benefits Council. "Employers have seen health care politics over the years, and good health care policy does not tend to emerge from health care politics."

After a decade of cost controls in the 1990s, health insurance premiums have resumed their rapid growth -- 11 percent in 2001, 13 percent in 2002, and 14 percent in 2003, according to the Henry J. Kaiser Family Foundation. Ford spent $30 billion in 2002 to cover insurance costs for 560,000 workers, retirees, dependents and surviving spouses, said Ford spokeswoman Brenda Hines. In 2003, the figure jumped $2 billion, adding nearly $1,000 to the cost of every Ford vehicle produced in the United States.

Brand-name prescription drug costs alone rose at nearly three times the rate of inflation last year, the AARP reported this week.

Those rising costs have taken a toll. From 2001 to 2002, the ranks of the uninsured jumped 2.4 million, to 43.3 million, the largest increase since 1987. The Kaiser foundation attributes that almost exclusively to employers, especially small businesses, dumping their health coverage.

In 2001, 68 percent of businesses with fewer than 200 workers offered health care benefits. By last year, 65 percent did. Coverage from businesses with 25 to 49 workers has fallen from 91 percent in 2000 to 84 percent last year.