GAWDA Members React to Health Care Law

On Thursday, June 22, the Supreme Court upheld in a 5-4 vote the Affordable Care Act’s individual mandate requiring most Americans to obtain health insurance or face a penalty. The Supreme Court justices determined that the penalty was not unconstitutional because it could be characterized as a tax.

While much is yet to be determined about the future of health care in the U.S., this decision is sure to have major implications for businesses across the country. Reaction has been mixed among GAWDA members and among the industrial and manufacturing community in general.

National Association of Manufacturers President and CEO Jay Timmons spoke out shortly after the ruling. “Manufacturers have consistently made it clear that lowering costs should be the central focus of any health care reform effort. 97 percent of manufacturers offer generous health benefits to their employees, and skyrocketing health care costs represent the single biggest obstacle for them continuing to do so. This ruling still leaves a lot of work to be done to reduce soaring health care costs.” Timmons adds, “Washington must work for manufacturing to ensure that health care costs aren’t a roadblock for job creation and economic growth.”

Todd Ratheal, president at Lubbock Welding Supply (Lubbock, TX), is one of those business owners offering generous health benefits. “I provide health insurance for all of my employees and their families, so the discounts in the early end will do me some good.” Ratheal feels that certain provisions are very positive for employees. “I don’t see how anyone can disagree with the provisions for pre-existing conditions and being able to take care of your children longer.”

Ratheal admits that it is too early to know the full impact of the law as far as his business is concerned. “As a business owner, it could end up helping my bottom line in the short run, but we’ll just have to see what happens. I’ve felt all along that were going to have a universal health care system sooner or later.”

Melo’s Gas and Gear (Bakersfield, CA) President Dave Melo likewise provides his 60 employees with generous health benefits. “It’s important for us to take care of our employees so they know they are part of the family.” However, he expects the Affordable Care Act will have a significant impact on his employees. “I don’t know if I’ll be able to continue to provide coverage at this level if rates continue to go up.”

“I was disappointed with the Supreme Court’s decision,” Melo says. “I was hoping the law would be rejected so that we might someday get a dose of reality injected into medical expenses. The formulas used to calculate health expenses are not reality, and it won’t happen as long as the government is involved.”

Boon or Bane for Medical Gases?
One particular subset of manufacturers—drug makers—has applauded the health care act, expecting that greater individual coverage will drive an increase in sales of pharmaceuticals. But will this boost extend to manufacturers and distributors of medical gases?

One Midwest distributor who asked to remain anonymous says the changing health care laws won’t affect his sales. “Our thrust on medical gases is to institutions, doctors, dentists, and the like, so I don’t expect any increase. If there is any impact at all, it would be for those selling in the home health care.”

The distributor principle says the government needs to stay on the sidelines when it comes to health care. “The less government, the better,” he says, adding that it’s just one more hurdle from the government. “Whatever happens is going to happen. After it does, we just need to pick up the pieces and move on.”

Dave Melo believes medical gas distributors could actually see declining profits with the Affordable Care Act. “Pharmaceutical companies have a lot more money at risk, so they have lobbied for protection. Hospitals have to make money, and they may try to cut their costs on oxygen to defray their other expenses.” He adds that pharmaceutical companies spend a lot of money on R&D, so they should be making a higher percentage of profit than gas manufacturers. “There’s not a whole lot of research in medical gases. Oxygen is oxygen, and you can’t really improve on it.”

What impact will the health care law have on your business?

Gases and Welding Distributors Association