John Kline: Governors Tell Me Obamacare Will Crush Them
CNBC Senior Talent Producer
As expected, House Republicans passed a bill to repeal President Obama’s health care plan by a vote of 245 to 189. Republicans say this vote was a mandate of the American voter.
The bill now goes to the Senate but Majority Leader Harry Reid (D-Nev.) has promised that any attempt to roll back the law would be blocked. The topic of health care is one that not only polarizes politics, but Americans as well.
I decided to speak with Representative John Kline, (R-MN) Chairman of the Education and the Workforce Committee. This committee shares jurisdiction over health care reform specifically the employer-sponsored health care plans that cover approximately 170 million Americans. Cost and uncertainty surrounding the bill dominated our conversation.
LL: What are you hearing from the employers in your district on the trickle down effect of Obamacare?
JK: I have heard from employers large and small about the impact of Obamacare. Small employers still do not know the impact. They're looking at the number of employees, they're asking what happens if they grow their company and what are they going to do about that.
So I think its this uncertainty that has been a strangle hold on job growth in America. From large companies—and we have many large companies in Minnesota—they are worried about the Grandfathering provisions, they're worried about the effect it will have on their employees going down the line so I have had a lot of dissatisfaction from business both large and small on this.
LL: Do you think we'll see companies drop coverage and pay the penalty because over the long run its a cheaper price to pay?
JK: I think it is almost certain that will happen. You are going to have small businesses say it is going to be much cheaper for them to pay the $2,000 fee rather than provide this government approved health care and you are going to have large businesses do the same thing.
The key here is, it has to be government approved, its not just any health care they would provide. You've already seen businesses across the country bump up against this law and the Secretary of Human Health and Services had to issue 222 waivers just because the law was so badly put together. So there is no doubt in my mind you will have companies drop this and that will drive up the cost on the taxpayer as a result.
LL: Medicaid is part of this system and more people who are uninsured will go into it. This system needs reform in and of itself. Can Medicaid handle the additional load?
JK: I'm hearing from Governors that it can't. One of the biggest complaints I am hearing from Governors and admittedly I am talking mostly to the Republican Governors and we have a lot of new Republican Governors—and they are saying this is just going to break them.
What this health care law did was in order to get more people insured—they are putting 15 million more people into Medicaid. Now that and the requirements on how that is administered is the reason why Governors are saying it is just breaking them. So this is going to be a big, big problem for states going forward. And I don't know how a state like California is going to deal with it.
LL: Its interesting you brought up the State issue. In my column yesterday I was talking about the health care rationing that's going on in Arizona (Amanda Glassman: Budget Crisis Could Lead To Health Care Rationing) and how they recently decided to halt Medicaid reimbursements for organ transplants.
I have had contacts tell me they fear when the additional load of people are rolled in Medicaid they are expecting more States to follow suit. Are you afraid of this as well or is it overblown?
JK: It is exactly right. What we have said all along is we have listened to other countries around the world that have national health care systems and one of the things that comes with this sort of thing is rationing. Some agency, some committee, some bunch of bureaucrats decide what care they will pay for and what they won't.
We think we need a more patient centered, market based approach to performing health care in America. This is moving us in the wrong direction. As I mentioned, the Governors are saying we've got problems with Medicaid right now and if you put these additional requirements on this law it is going to break them.
LL: The House passed the repeal and many are hoping this will open the dialog between the Republicans and the President on fixing the bill—particularly the 1099 issue where small businesses will have to fill out a tax form for vendors with whom they do 600 dollars worth of business. Are you confident this will happen?
JK: The President himself says there are provisions of this law that need to be fixed. And he has referenced the 1099 issue himself and has said that has to be fixed.
There is a strong bipartisan effort to repeal that portion of the bill and I think the vote will send a message that there is a determined effort to repeal the bill and if in the end of this process it can not be appealed, there will be a determined effort to prune the branches, to repeal parts of it.
We have to put in some good common sense reforms and this vote will underscore that message to America as well as the President.
LL: The bill now goes onto the Senate. If Senate Majority Leader Harry Reid does not put this up for a vote, what message will this send to the American voters? Does this paint the picture of what the legislative process will look like for the next two years?
JK: It depends on how the debate goes forward and the tone. I can't speak for the Majority Leader, I really don't know which way he will go, but I believe the American people spoke very clearly in November and the overwhelmingly result in the House where every new Republican or perhaps every single Republican that ran and won included repealing Obamacare as part of their message. So it shows a pretty strong stance of the American people that they really don't like this law.
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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."