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A report issued by Health and Human Services (HHS) secretary Kathleen Sebelius in late October outlined the ways in which health insurance reform will lower costs for small businesses. The report, Lower Premiums, Stronger Businesses: How Health Insurance Reform Will Bring Down Costs for Small Businesses, noted how small businesses are struggling to offer care or grow their businesses due to the high cost of health care.
“Small businesses, the backbone of job creation in our economy, are disproportionately burdened by the financial strains caused by rising health care costs,” the HHS report stated.
According to the report, premiums for employer-based health insurance has more than doubled since 2000, a growth rate three times that of wages. The high cost of health care diminishes employee wages and business growth.
The report indicated that health insurance reform would bring down costs for small businesses by creating a health insurance exchange which pools small business and their employees with millions of other Americans to increase competition in the insurance market. Reform would provide a small business tax credit for an estimated 3.6 million small businesses nationwide and end the “hidden tax” of more than $1,000 added onto every family policy that covers the cost of care for those without insurance. A health insurance reform bill would also prevent arbitrary premium hikes for small businesses.
fAccording to the report, health insurance reform will also ensure employers and employees have stable, secure insurance coverage, a limit on out-of-pocket spending and an elimination of caps on benefits.
The report lists the number of small businesses potentially eligible for premium tax credits by state. But with a concrete health reform bill far from being finalized, every proposal or provision is up for debate and could be excluded from the final bill.
“I think there is a lot of interest and confusion at the point,” Anita Campbell, editor of Small Business Trends, an online publication for small business owners, said. “There are so many proposals. It is difficult to tell what will be in the bill. Everything is up in the air.”
In Campbell’s view, small business owners have grown weary of the political bickering on both sides of the aisle.
“There is a sense of being manipulated by all sides – both political sides,” Campbell explained. “Employers would like a reform bill that covers insurance without increasing the financial burden on their small business.”
Questions remain regarding the health insurance reform bill including concerns about insurance pools and employer mandates and penalties for those who do not offer coverage. But without knowing what the final outcome will be, small business owners can only watch as the contentious debate plays out in Washington, D.C.
“My sense is that [business owners] want reform,” Campbell said. “I think one of the questions that small business owners need to ask themselves is what will this mean to me?”
As a small employer, my rates are up for renewal every year and this year our existing insurance company is increasing rates at 30%. Obviously we are looking at other plans. But how can any business plan its’ needs for the near future when such a volatile market exists for basic expenditures that are influenced by things out of our control, such as weather, natural resources and volatile commodities, i.e. oil?
I do not know of any other business services that have such great price fluctuations on a yearly basis. Certainly wages, taxes and rents do not.
The fact is, in the Philadelphia metro area, as well as many other areas of the country, there are only three to four insurance companies providing health insurance. This kind of oligarchy can dictate the market price with little impunity. They are accountable to their shareholders to provide continued profitability. So far, the only system that seems to work well without a profit parameter is Medicare and the U.S. Department of Veteran’s Affairs.
— Jon Shreter, CPO
President, Allied Orthotics and Prosthetics and O&P Business News Practitioner Advisory Council member
