As health costs continue to grow, straining employer budgets and slowing wage growth, the business community is beginning to take the option more seriously.
By Kaiser Health News for HealthLeaders
EASTON, Pa. — Walk into a big-box retailer such as Walmart or Michaels and you’re likely to see MCS Industries’ picture frames, decorative mirrors or kitschy wall décor.
Adjacent to a dairy farm a few miles west of downtown Easton, MCS is the nation’s largest maker of such household products. But MCS doesn’t actually make anything here anymore. It has moved its manufacturing operations to Mexico and China, with the last manufacturing jobs departing this city along the Delaware River in 2005. MCS now has about 175 U.S. employees and 600 people overseas.
“We were going to lose the business because we were no longer competitive,” CEO Richard Master explained. And one of the biggest impediments to keeping labor costs in line, he said, has been the increasing expense of health coverage in the United States.
Today, he’s at the vanguard of a small but growing group of business executives who are lining up to support a “Medicare for All” national health program. He argues not that healthcare is a human right, but that covering everyone with a government plan and decoupling healthcare coverage from the workplace would benefit entrepreneurship.
In February, Master stood with Rep. Pramila Jayapal (D-Wash.) outside the Capitol after she introduced her Medicare for All bill. “This bill removes an albatross from the neck of American business, puts more money in consumer products and will boost our economy,” he said.
As health costs continue to grow, straining employer budgets and slowing wage growth, others in the business community are beginning to take the option more seriously.
While the influential U.S. Chamber of Commerce and other large business lobbying groups strongly oppose increased government involvement in healthcare, the resolve of many in the business community — especially among smaller firms — may be shifting.
“There is growing momentum among employers supporting single-payer,” said Dan Geiger, co-director of the Business Alliance for a Healthy California, which has sought to generate business support for a universal healthcare program in California. About 300 mostly small employers have signed on.
“Businesses are really angry about the system, and there is a lot of frustration with its rising costs and dysfunction,” he said.
Geiger acknowledged the effort still lacks support from any Fortune 500 company CEOs. He said large businesses are hesitant to get involved in this political debate and many don’t want to lose the ability to attract workers with generous health benefits. “There is also a lingering distrust of the government, and they think they can offer coverage better than the government,” he said.
In addition, some in the business community are hesitant to sign on to Medicare for All with many details missing, such as how much it would increase taxes, said Ellen Kelsay, chief strategy officer for the National Business Group on Health, a leading business group focused on health benefits.
Democrats Propel the Debate
For decades, a government-run health plan was considered too radical an idea for serious consideration. But Medicare for All has been garnering more political support in recent months, especially after a progressive wave helped Democrats take control of the House this year. Several 2020 Democratic presidential candidates, including Sens. Bernie Sanders and Elizabeth Warren, strongly back it.
The labor unions and consumer groups that have long endorsed a single-payer health system hope that the embrace of it by employers such as Master marks another turning point for the movement.
Supporters of the concept say the health system overall would see savings from a coordinated effort to bring down prices and the elimination of many administrative costs or insurance company profits.
“It’s critical for our success to engage employers, particularly because our current system is hurting employers almost as much as it is patients,” said Melinda St. Louis, campaign director of Medicare for All at Public Citizen, a consumer-rights group based in Washington.
Master, a former Washington lawyer, worked on Democratic Sen. George McGovern’s presidential campaign before returning to Pennsylvania in 1973 to take over his father’s company, which made rigid paper boxes. In 1980, he founded MCS, which pioneered the popular front-loading picture frame and steamless fog-free mirrors for bathrooms. The company has grown into a $250 million corporation.
Master frequently travels to Washington and around the country to talk to business leaders as he seeks to build political support for a single-payer health system.
In the past four years, he has produced several documentary videos on the topic. In 2018, he formed the Business Initiative for Health Policy, a nonprofit group of business leaders, economists and health policy experts trying to explain the financial benefits of a single-payer system.
Dan Wolf, CEO of Cape Air, a Hyannis, Mass.-based regional airline that employs 800 people calls himself “a free market guy.” But he also supports Medicare for All. He said Master helps turn the political argument over single-payer into a practical one.
“It’s about good business sense and about caring for his employees and their well-being,” he said, adding that employers should no longer be straddled with the cost and complexity of healthcare.
“It makes no more sense for an airline to understand health policy for the bulk of its workers than for a health facility to have to supply all the air transportation for its employees,” he said.
Employers are also an important voice in the debate because 156 million Americans get employer-paid healthcare, making it by far the single-largest form of coverage.
Master said his company has tried various methods to control costs with little success, including high deductibles, narrow networks of providers and wellness plans that emphasize preventive medicine.
Insurers who are supposed to negotiate lower rates from hospitals and doctors have failed, he added, and too many premium dollars go to covering administrative costs. Only by having the federal government set rates can the United States control costs of drugs, hospitals and other health services, he said.
“Insurance companies are not watching the store and don’t have incentives to hold down costs in the current system,” he said.
Glad The Boss Is Trying To Make A Difference
What’s left of MCS in Pennsylvania is a spacious corporate office building housing administrative staff, designers and a giant distribution center piled high with carton boxes from floor to ceiling.
MCS pays an average of $1,260 per month for each employee’s healthcare, up from $716 in 2009, the company said. In recent years, the company has reduced out-of-pocket costs for employees by covering most of their deductibles.
Medicare for All would require several new taxes to raise money, but Master said such a plan would mean savings for his company and employees.
MCS employees largely support Master’s attempt to fix the health system even if they are not all on board with a Medicare for All approach, according to interviews with several workers in Easton.
“I think it’s a good idea,” said Faith Wildrick, a shipper at MCS who has worked for the company 26 years. “If the other countries are doing it and it is working for them, why can’t it work for us?”
Wildrick said that even with insurance her family struggles with health costs as her husband, Bill, a former MCS employee, deals with liver disease and needs many diagnostic tests and prescription medications. Their annual deductible has swung from $4,000 several years ago to $500 this year as the company has worked to lower employees’ out-of-pocket costs.
“I’m really glad someone is fighting for this and trying to make a difference,” said Wildrick.
Jessica Ehrhardt, the human resources manager at MCS, said the effort to reduce employees’ out-of-pocket health costs means the company must pay higher health costs. That results in less money for salary increases and other benefits, she added.
Asked about Medicare for All, Ehrhardt said, “It’s a drastic solution, but something needs to happen.”
For too long, Master said, the push for a single-payer health system has been about ideology.
“The movement has been about making healthcare a human right and that we have a right to universal healthcare,” he said. “What I am saying is this is prudent for our economy and am trying to make the business and economic case.”