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Under-reported : Small Businesses Would Benefit From Health Insurance Reform

by: KathyinBlacksburg

Thu Mar 18, 2010 at 16:34:48 PM EDT

In the 1960s my father-in-law provided health insurance for employees of his small business.  Little did we know how ahead of his time he was.  A survey by the Small Business Majority found that even today only 46% of small business owners provide health insurance, but 76% of them struggle meeting their premiums.  The 54% who do not provide coverage say they cannot afford it.  Let me pause here: The majority of small business owners do not provide health insurance for their employees. It is their employees who most likely are caught in private individual plans which get slammed over and over and which get canceled at the drop of a hat.  Some companies drive up the cost of policies solely to induce "high risk" patients to drop their policies.  It is clear that both individuals and small businesses need both relief and reform.

Meanwhile, the upward trajectory of health care costs for small businesses continues.  In 2009 costs are around 3.42 billion.  MIT economist Jonathan Gruber estimates they will go up to around 7.43 billion in 2018.  One of the most vocal opponents of health insurance reform is the national Chamber of Commerce, which runs particularly troublesome and questionable ads.  They do not get it.  Not only would health insurance reform reduce personnel costs, a real public option would could ultimately produce far greater savings.  With Medicare overhead costing only 4%, private insurance pales in efficiency of delivery.  Further efficiencies in delivery of Medicare services, such as elimination of over-payments to the so-called (fake) Medicare "Advantage" plans and greater effort at fraud reduction will drive home even more savings.  (Proponents of reform failed utterly to explain these over-payments and their ruinous effect on the future of Medicare.  It is the absence of reform which hurts Medicare.)

KathyinBlacksburg :: Under-reported : Small Businesses Would Benefit From Health Insurance Reform
While most of the conversations about health care have focused on how it will affect individuals, little has been offered regarding the benefits of reform for small business, the primary engine for job growth in a market where larger companies often offshore and downsize.

Here are just a few examples to add to the reform aspects mentioned above:

• Exempts small businesses (<50 employees) from sharing insurance premium costs with employees.  That means 96% of small businesses would not have to pay part of the premium.  
• Reduces costs and increases negotiating leverage by creating exchanges which encourage competition among insurers to the benefit of small business and the self employed.
• Provides individual tax credits on a sliding scale for about 25 uninsured million Americans.
• Implements many cost-containment provisions.
--electronic records,
--paperword simplification,
--changind the way doctors and hospitals are paid (better results not number of procedures and tests),
--new alternative system of statewide not-for-profit coops.

• Beginning in 20010 gives small business tax credits for those small businesses offering insurance.  This should help 3.6 million companies better afford health insurance for their employees.
• Provide new regulatory authority to prevent large, unjustified increases in premiums, as happened recently in both CA and MN.
• Ends discriminatory practices particularly injurious to small businesses and the self employed, such as raising rates based on health status, age, or pre-existing conditions.  
• Reduces the federal deficit by $130 billion over the next 10 years.

Given that there is no employer mandate in the health care bill, I am baffled at the behavior of some supposedly pro-business entities opposing reform.   Their behavior seems more political/partisan than rational.  Although there are shortcomings in this bill (particularly that it doesn't go far enough in reforming the system or provide a truly public option), hurting small businesses isn't one of them.  

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Gruber is on retainer to HHS, he's a WH flack
Citing him is the same as citing Rahm. It hurts you argument.

Although he is a noted consultant to Democrats
he is right about this.  I think Gruber is wrong on a number of things.  But I do not believe he is wrong about this.  The effort of this bill is to shift the mandate for health insurance onto individuals rather than corporations.  In the long run, this direction will help your company.  It will also likely help in the short run(as Elaine has noted).  I think the shifting of the burden onto individuals is wrong.  And it is likely to undercut the claim that "if we like the coverage we have we can keep it."  That may be true for a while.  In the long run, I doubt it.

Gruber declare that we will never have single payer in this country.  He purports that Americans so love their policies they would never accept single payer.  That's disputable.  You can rig a survey to come up with that.  But if you ask the question without biasing language, Americas are very open to single payer. They will be more and more so.  I am willing to bet that after the Baucus bill becomes law, Americans will be clamoring for single payer.

He claims that the health insurance market is well-functioning for most, but not all.  This is kind of laughable.  Nowhere is the market for health care well-functioning.  Even those of us who think we are OK (got ours) can find ourselves having to fight for payment of legitimate claims.  Americans should never, ever have to go into a surgery with a disclaimer by their insurer that "pre-approved" it, but that they might not pay for it.

Gruber's "Third Way" is just so much bull.  I also don't like his notion of incrementalism.  It means progress will be incredibly slow on so many issues.

Most of all I do not like his authoring MittCare.  Kinda shows you whose side he's really on.

Even so, I think he is right about small businesses being better off on average.

It's individual Americans I worry about.  Until some better cost controls are added later (if they can be), I remain concerned.

"One person, one vote" died at the hands of SCOTUS, January 21, 2010

[ Parent ]
One more thing...
the day after this passes, we have to begin the effort to fix some of the things that are wrong with it.  The work doesn't end tomorrow.

"One person, one vote" died at the hands of SCOTUS, January 21, 2010

[ Parent ]
There will be no appetit to deal with hcr until the next Democratic administration and I don't mean an Obama second term (god help us)
so whatever we get tomorrow we'll be stuck with until I'm on Medicare.

In the meantime, my company will probably be forced out of business by health premia that continue the roof.  

Too many of my employees are single mothers with sick kids.  I'll close the doors before I cut off their health benefits.

[ Parent ]
the regulatory authority has been dropped from the bill
my small business of 54 people, 22 of which chose to use our plan, the others had a spouse with a better cheaper plan, saw our premia increase 54% last year.

As I read the bill, my business won't be able to access the exchanges.

Not the Way I Read It
The way I read the bill, you would not be denied the use of the insurance exchange. You would, however, not be exempt from paying a portion of the premium for your employees.

Since you offer a plan right now, you should come out much better. The tiny group that only had 22 people in it makes you subject to the worst of insurance company excesses.

Also, unless your small number of employees all make rather large salaries, they will probably be able to get tax credits to help them pay for their insurance.

By the way, being on retainer to HHS doesn't necessarily mean that Gruber is dishonest or is a liar.

[ Parent ]
Neither Gruber nor the Wh disclosed the HHS contract when Gruber made some critiques of
public option & Medicaid buy-in at a time that Rahm was trying to bully progressives off those issues. Gruber's analysis didn't withstand scrutiny. WH was citing Gruber as an supposed independent expert without disclosing his HHS contract as an expert for hire.

Our company pays most, if not all, of the non-owner employees premia to the extent that I had to defer a month's pay and tell my kid that she might not be able to go back to college.

Do you have a section cite for you read of the bill?

[ Parent ]
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