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No issue appears to be getting more traction with employers than health care costs. This should not come as any surprise in light of statistics that paint a fairly grim picture.

For example, the Centers for Medicare and Medicaid Services reported in January that in 2001 - the most recent year for which data is available - total health care spending in the United States reached $1.4 trillion, an 8.7 percent increase from 2000. That represents the largest one-year increase in a decade.

Total health care spending in 2001 represented 14.1 percent of gross domestic product (GDP), up from 13.3 percent in 2000, and up by more than one full percentage point from a decade ago.

This is a major factor driving large increases in premium costs for employer-provided health insurance benefits. NAW's recently-completed 2003 Health Insurance Benefits Survey reveals a wholesale distribution industry-wide average increase in health insurance premium costs of 19 percent, matching the previous year's increase. Smaller wholesaler-distributors - those with 50 and fewer employees - fared the worst, facing an average increase of 23 percent. This followed on the heels of a 20 percent average increase the previous year. Even the largest wholesaler-distributors - those with more than 500 employees - realized increases averaging 16 percent for the second year in a row, a rate of increase that is itself clearly unsustainable, particularly in difficult economic conditions.

Consequently, employers are requiring employees to share more of the premium burden with them, and/or increasing deductibles and co-pays and/or cutting back on benefits. In short, employees frequently have to pay more out-of-pocket for reduced benefits. As a result, last fall the U.S. Census Bureau reported that the number of medically uninsured Americans rose by 1.4 million people, to 41.2 million. Unfortunately, all signs point to this trend continuing for the foreseeable future.

Of course, our Nation's health care system serves everyone with or without medical insurance. Those without insurance contribute in a substantial way to the problem of "cost shifting," which drives up medical fees, insurance costs and premiums for those with coverage. For this reason, employers large and small have every reason to want to hold down the cost of medical insurance and reduce the number of uninsured Americans.

We know that the vast majority of the uninsured - some 85 percent ö are in working families, and that workers in smaller businesses and their families make up 60 percent of the working uninsured. Clearly, reforming the health insurance marketplace to bring quality, affordable health insurance within reach of more small employers and their employees is in the interest of every wholesaler-distributor, large and small.

In that regard, nothing has a higher priority on the NAW Federal public policy agenda than health care, and nothing on NAW's health care agenda exceeds the importance attached to enactment of legislation to authorize the formation and multi-state operation of association health plans (AHPs), affording smaller employers the marketplace benefits of economies of scale and bargaining clout that now elude them as they struggle in the state regulated small group market.

On two occasions, NAW has submitted testimony for the record of Congressional hearings on this subject, most recently on Thursday, March 13th before the House Employer-Employee Relations Subcommittee. You can access our statement and attendant press release by clicking on the following links:

To view the NAW press release, go to: http://www.naw.org/news/02102003.html 

For the statement, go to: http://www.naw.org/TestimonyHR.pdf

As the 108th Congress matures, NAW will be seeking your support for legislative initiatives, the enactment of which will help hold down insurance costs, and we will be asking for your help in defeating proposals of opposite effect. We look forward to working with you on this critically important issue to your member employers and ours.