Posted by: John Tozzi on May 6, 2009
An idea I didn’t hit on enough in my story: small businesses need to be able to shop for health insurance on the national market. Says a reader by the handle Strategery:
Short of universal healthcare, we should allow small businesses to cross state lines and build pools and trust funds much like large companies already do.
The current system, with insurance regulated separately in each state, raises the cost and limits the options small business owners can choose from. More on this idea here from the NFIB.
Another business owner disagrees with the idea that insurers shouldn’t price based on workers’ age and health status. Writes Sam:
I am 55 years old and have seen my rates increase because of my age. Why shouldn’t they? I am sure statistically older people collect more benefits than younger people. Would you really want the government coming into your business and tell you you have to charge each of your customers the same irregardless of the cost of producing or servicing the customer. Someone has to pay for the medical costs incurred by the insurance company. If the premium cost is not increased as you get older and you use more of the services, then the burden will be shifted to the younger groups in higher rates to them. Doesn’t seem fair to me and remember I am in that older group.
The reasoning for restricting this in the SHOP act is that it makes premiums unpredictable for small businesses. If one or a handful of employees developed serious medical problems (and therefore have high costs of care), it could cause premiums to spike for the whole company. The market pooling mentioned above would soften this by having more people paying into the pool, spreading the risk more broadly. But one of the big things you hear in surveys of small business owners is that not only is the cost of health care too much, but it’s too unstable. Many business owners say even if they could afford to provide coverage this year, they don’t want to have to take it away next year if the premiums skyrocket. So reforms should be oriented around making costs predictable for small businesses.
Larry says he pays too much for too little coverage for his staff:
I tried providing 100% of my employee and spouse health coverage. After paying out many thousands of dollars for it, I found that the coverage benefits that were actually paid by the insurance company were practically zero. We found that the “Insurance” company made all decisions about what was actually paid with no input from us or our employees. If we had put the same amount of money into Health Savings Accounts, the employees could have paid almost, if not all, of their health related expenses and would have had money left over. Even if we had provided catastrophic coverage from the same account, they would have had much more coverage than they actually got under the regular plan. My question is, What are the insurance companies doing with the extra premiums they receive. More transparency is what is really needed right now.
And a doctor named Fred Thysell reminds us of the individual responsibility in good health when it comes to obesity and other factors that can be affected by lifestyle: “If you’re sick you’re probably doing something wrong (like eating too much of the wrong foods). If you don’t want to be sick you don’t have to be. The information is all there. Just do it. Quit blaming the system.”
Small businesses and their workers are among the biggest stakeholders in health care reform. I can’t think of other legislation that could have as big an impact on just about every small business in the US. And we’re having this discussion at a time when policy makers are actually focused on this. Congress plans to take up health care in June, and the president wants something passed by the end of the year. So keep weighing in on these threads, on our Business Exchange page, tell us on Twitter or plain old email as we continue to cover this. And thank you for all the thoughtful comments — they do inform our reporting, so please keep ‘em coming.