The Three C’s of Healthcare Reform

090915 at 6:37 pm Leave a comment


What Small Business Wants From Healthcare Reform

What Small Business Wants From Healthcare Reform
Small Business Matters in the Debate, And the Debate Matters to Small Business
  • The cost of health insurance has been the No. 1 problem facing small businesses for more than 20 years.
  • About half of the nation’s uninsured are people who are self-employed or work for a small business.
  • Small businesses buy in the individual and small group markets – the two most broken and expensive markets.
  • A June 2009 New York Times story noted “Policy analysts and others say, unless the insurance industry is willing to give some of the same ground to small businesses that they have ceded to individual policy holders, a big part of what is wrong with the nation’s health care system may not get fixed.”
Healthcare reform for small business must address the 3 C’s:
Cost, Choice and Competition
Cost: The cost of insurance for small business and their employees must come down. Small business pays more (than big business) for less.
  • For too many small business owners, healthcare is one of their fastest growing and most unpredictable costs.
  • Since 1999, health insurance costs for small firms have increased 113 percent.
  • Employees in our nation’s smallest firms pay an average of 18 percent more in health insurance premiums for the same benefits the largest firms provide.
  • Small business and the self-employed want equity in tax treatment – regardless of how or where insurance is purchased.
Choice: Owners and employees need more choices of insurance plans and options, and an easier way to “shop” for these plans.
  • Today, among firms with 1-199 workers, 86 percent of those who offer coverage can only offer one plan.
  • Small business desperately needs a more efficient marketplace in which to purchase health insurance.
  • A well-functioning connector-exchange can be an answer to these needs. It is critical that exchanges guarantee all small business owners access to more choices of plans.
Competition: Lack of competition makes it easier for insurers and providers to raise prices. We need greater competition in the marketplace.
  • A 2009 General Accounting Office report found that competition in the small group market has become further concentrated with less competition amongst carriers.
    • When combined, the five largest carriers in the small group market account for 75 percent or more of the market in 34 of the 39 states.
  • Small employers benefit most from reforms that spur competition, such as those reflected by the SHOP Act (H.R. 3260), legislation targeted to small business that utilizes insurance market reforms, tax -based incentives and personal choice for health insurance – in a voluntary setting.

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