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EMPLOYEE BENEFITS

Small Business Not Left Out of Health-Care Reform
 

With the possible adoption of a national exchange program comes the benefits of buying in bulk.
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The debate over health-care reform – not so much about whether America needs it, as how exactly it should be executed – is filled with questions. Why are 46 million citizens still uninsured? If the government decides we need change, will doctors play along? What about insurance providers? Will competition and capitalism still be possible in a government-sponsored system?

And the answers continue to roll in: As costs rise, fewer employers offer health-care benefits. Many doctors have conceded that despite financial concerns, the patient is what's most important. Insurance providers have pledged to stop taking pre-existing conditions into account when quoting rates, and President Obama has promised that the option between public and private health care will endure, which some say would even encourage competition.

Still, at least one group was left wanting after months of media coverage and conversation. Without the buy-in-bulk benefit large corporations enjoy, small businesses and the self-employed have had to deal with astronomical health-care costs. Would they be saved in this new plan?

If the Affordable Health Choices Act, filed by Sen. Edward M. Kennedy (D-Mass.), is any indication, then small business might just have a fighting chance in the new America. (And when health-care spending represents 17 percent of the entire gross domestic product, trust that any significant changes will mean, on some level, a new America.)

Bearing this announcement is The Economic Impact of Healthcare Reform on Small Business, a June 11 report by a nonprofit advocacy group that focuses on health-care reform, the Small Business Majority. The SBM found that changes along the lines of what is being drafted in Washington (at least three more bills are expected in addition to the AHCA) will bring small business to a more level playing field with large employers.

Although small business has historically been opposed to mandated employer-based health insurance (citing the great burden it places on smaller employers), the report concludes that with reform, small businesses could save up to $855 billion over the next 10 years. Without it, health-care costs for small businesses are expected to approach $2.4 trillion over that same period.

The most notable feature of the proposed legislation is the Gateway, an exchange program that would allow individuals to buy into a group system similar to Medicare. "It is creating the opportunity to do bulk purchasing," says John Arensmeyer, CEO of SBM.

"The size of your business should not dictate the cost of your health care," Arensmeyer says, noting that the average cost of a health insurance policy for small businesses is 18 percent higher than that of big businesses.

"The real key is being able to spread costs out," says Joel Miller, senior vice president for operations at the National Coalition for Health Care, a Washington D.C.-based, nonpartisan organization. "That has been the beauty of the employment-based system."

The Gateway makes use of that exact cost-spreading principle by offsetting the expenses of heavily insurance-dependent employees with profits from healthier participants, who generally pay much more than they actually cost an insurance provider to support.

Arensmeyer says that what is important for business owners now is to define exactly what constitutes the "qualified individuals and qualified employer groups" mentioned in the bill.

Buried within the 615-page document are jargon-laden definitions that stipulate that a qualified employer allows all full-time employees to join a public program and meet any criteria still unset by the particular state. A qualified individual, according to the bill, is someone who is not eligible for any other government sponsored health-care programs such as Medicare or Medicaid, and meets the requirements of the state.

Sen. Kennedy's office was not available for comment.

Last updated: Jul 6, 2009




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