OP-ED

OP-ED: Small Business and Health Reform

Small businesses are among the groups hit hardest and left most vulnerable in our current health insurance system.  Yet, the small business community has been almost uniformly typecast as down on reform.  So goes the conventional wisdom.  But is it true?

This is not solely an academic question.  Where small business stands on health care is critically important to the prospects for meaningful reform in 2009.  As the debate over reform heats up, a whole lot of people – from Members of Congress to the media to the public – will be looking to hear from small business owners to find out where they stand on health care.

Rather than stand around and pontificate about what small business owners are thinking about health reform, we decided to go out and ask them.  To get a beat on small business owners’ priorities, we conducted a survey project in 2008 where organizers in twelve states around the country went door to door, got face to face with local small business owners, and surveyed them about their experiences with health insurance and their perspectives on different reform proposals.

 

Today we released the results in a report titled Taking the Pulse of Main Street: Small Businesses, Health Insurance, and Priorities for Reform (available online at http://mainstreetalliance.org ).  The report addresses a series of key questions, like: what kinds of reforms do small businesses want in health care?  Are small business owners willing to contribute… if so, how much?  And, what role should government play?
The results outlined in this report challenge the conventional wisdom in three arenas:

Willingness to Contribute: When asked if they’re willing to contribute for health coverage for their employees, more than two thirds (73 percent) of small employers said yes.  Furthermore, 63 percent of small employers indicated they would be willing to pay 4-7 percent of payroll or more to guarantee quality, affordable coverage for themselves and their employees.

Support for a Public Alternative: When asked to choose between a proposal with a public insurance alternative and a proposal with more private market choices, small business owners chose the proposal with a public alternative by a margin of more than two to one (59 percent to 26 percent, with 14 percent undecided/other).

Role of Government: When asked about public oversight and the role of government, small business owners more public oversight of the insurance industry by a margin of almost six to one (75 percent to 13 percent), and support for a stronger government role in guaranteeing access to quality, affordable health coverage by a margin of over four to one (70 percent to 16 percent).

These findings may sound surprising because they challenge the conventional wisdom, but really they make a lot of sense.  Small businesses have been caught between a rock and a hard place on health care for a long time, and it’s only getting worse: businesses with less than 25 employees that offer coverage have seen their average costs for health insurance grow to 11 percent of payroll as of 2005.  Their median cost of health insurance relative to payroll rose by 43.5 percent from 2000 to 2005.[i]  At this point, the cost small businesses can’t afford with health care is the cost of doing nothing and allowing this trend to continue.  Small business owners are willing to pitch in their fair share – they just haven’t been offered anything that delivers good coverage and decent value.

That’s where the next point comes in.  Small business owners are tired of being held hostage by private insurance companies that treat them like a captive audience, jacking up rates every year and refusing to cover claims at their own whim.  Small business owners recognize that the only way to stop this routine hostage-taking is to create a public alternative that gives those who are tired of the industry’s game another option.  That means government is going to need to step in and play a role.

The issue of health care for small businesses is ever more important now, in the face of the economic recession.  Small business holds the promise to create jobs, help revitalize the economy and bring us out of the recession.  But to clear the way for fulfilling that promise, we’ve got to fix this health care mess, and do it right.

To sum up the beat we got from Taking the Pulse, in 20 words or less: small business owners want real health reform, are willing to contribute, and want a quality public alternative to private coverage.  Move over, conventional wisdom, because small business is ready to ante up to make real health care reform happen in 2009.

Sam Blair is the Director of the national Main Street Alliance, a new network of state-based small business coalitions giving small businesses a new voice on the issue of health care.

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33 replies »

  1. Oh…it’s not good to hear that the worker’s are not employed they don’t have also their benefits it’s so difficult for the people those who don’t have money.

  2. We are a law firm based in Portland, Oregon.
    I recently met with several individuals living in Oregon who have had health insurance through HealthMarkets Inc., North Richland Hills, Texas, and subsidiaries MEGA Life and Health Insurance and Mid-West National Life Insurance.
    We are in the process of investigating the potential for a class action lawsuit in Oregon against these companies for unfair and deceptive practices in marketing and administering limited-benefit health plans sold to small businesses and individuals in the state.
    The carriers appear to have targeted the self-employed along with small business owners with products packaged as part of memberships in the National Association for the Self Employed, Washington; Americans for Financial Security, Irving, Texas; and the Alliance for Affordable Services, Dallas.
    These companies may have used unfair and deceptive marketing and other practices to convince Oregon residents to buy health plans with limited benefits. Oregon health care consumers must be fairly told what they are buying, and their premium dollars should be used predominantly to pay health care benefits and not inflated commissions, overhead and profits.
    If you or a loved one is an Oregon resident and has had health insurance with any of these companies please contact us to discuss your experience with them and your potential options.
    Roe & Associates, LLC
    333 SW Fifth Avenue
    Suite 505
    Portland, Oregon 97204
    503/796-3006 tele
    503/235-3005 fax
    troe@tmroe.com
    http://www.tmroe.com

  3. Well, I believe the impact on small businesses has become a flashpoint in the increasingly raucous debate over health care reform. Because most of those workers are employed by small businesses that don’t offer them health benefits or offer coverage that they can’t afford.

  4. Small businesses are plagued with the problem of how best to communicate and educate on the health coverage options they choose for their employees. Even larger companies find it hard to convey what the options are and how to use them. Small business owners would make a tremendous statement if they took power and control away from the health insurance companies and handed it, with support tools, to the consumers. bWell-informed Health Plan Forecaster (www.bWell-informed.com) provides personalized, health plan neutral, guidance so employees of any size company can take control back.

  5. http://www.pubaffairsco.com/naschip/naschip_position_paper.pdf
    interesting paper on state high risk purchasing pools. Besides a fairly honest discussion of the effects of adverse selection, HIPAA, and guarantee issue the funding is interesting.
    “Funding mechanisms include assessments on health insurers and state appropriations from a state’s general fund.”
    I would think if the carrier is going to be paying the premium through an assessment they would be further ahead caring them on their books as a normal client. Lacking risk equalization maybe this is the best way to handle uninsurable risk.
    “about 20% to 25% of enrollees in high risk insurance pools leave each year. In other words, about a quarter of enrollees in a high risk insurance pool use it for one year or less and move on to group coverage through a new employer, individual coverage, Medicare, and Medicaid.”
    This is similar to the issue with the 46 million uninsured. Most are only uninsured for a portion of year then enroll in other coverage. The uninsured is mainly made up of those that are entitled to care and choose to not enroll and those betweem jobs that choose to not elect COBRA. What if we mandated individuals elect COBRA until they provide proof of other coverage? If you are concerned about the cost then build COBRA into the normal rates so it is pre-paid. It could work like state unemploment, those employers that terminate more works or have a more transient workforce would pay more.

  6. Matthew if my rebuttal to your claims/insults are not going to be posted, in fairness shouldn’t your comment making the claim? One might get the mistaken impression you where correct and I had no responce.

  7. Lets do a very simple test. You claimed;
    “Meanwhile, you really mean to tell me that if it run by legitimate insurers and not the con artists, the AHP will take all employer groups at the same price? And I thought you were the insurance expert? I look forward to you founding such an insurer and discovering the concept of adverse selection.”
    Ignoring you twisting my comment and adding at the same price portion you seem to be claiming AHPs would cherry pick. Go to http://www.chamberib.com/benefits.html and open the health plan bochure. I have sold this plan to sick groups so I am very familiar with it. Page 18 reads;
    “As a result of the Health Insurance Portability & Accountability Act of 1996 (HIPAA), employers with two or more employees joining the Chamber Plan after July 1, 1997, may not be declined coverage due to the health conditions of their employees. Employer groups that were previously ineligible due to health status reasons may now be able to offer their employees some of the most competitive coverage available. In fact, we are now offering big employer benefits to the small employer.”
    This is an example of an Association plan that guarantees coverage to every member of the association. Almost every state ha similar plans.
    Please correct your comment or show how this is not true.

  8. I has become clear debate with you is futile Matthew, it’s impossible to do the subject any justice when you are so dishonest. Why anyone would read a blog and believe anything said on it when the writer so openly distorts the truth is beyond me.
    “I catch you again in one completely ridiculous statement–that small business are not dropping health insurance.”
    I never said that, I specifically said the small employers I work with and quote in the states I do business are not dropping insurance. That is a factual statement about my experience. I never claimed that my business reaches the entire country or encompasses the entire market. The only employer I have had contact with that I thought might drop insurance instead purchased a 2K deductible so employees had catastrophic insurance. My statement is 100% accurate as your twisting of it is 100% dishonest.
    “whining on and on about HIPAA which has done nothing to increase the number of Americans with health insurance,”
    I never claimed that HIPAA increased the number of American’s with insurance. I specifically said your and Sam’s claims that small group insurers cherry pick risk was incorrect as it is outlawed by HIPAA. You have refused to prove or support how small group insurers sherry pick when it is clearly not allowed. You have provided no proof instead you once again twist my comments to cover up your factual error.
    I have a much clearer and practical understanding of HIPAA then you ever will. I work with it every day how about you?
    “Great you pose the straw man of how an unpassable bill says AHPs might work.”
    You are the one that made the specific claim that the AHP bill would allow AHPs to cherry pick risk. I pointed you to the parts of the legislation that specifically forbid that. You clearly don’t understand the concept of a strawman argument. I responded to your specific claim, the only strawman was your rebuttal to hide your error in claiming they would cherry pick.
    I don’t need to read John’s book I work in the industry and know far more then John ever will about the subject. Speaking of straw men this was a perfect example of one. Fraud was a problem before MEWAs where effectively outlawed in most states. There are still a number of very successful MEWAs across the country. Phony MEWAs that are the result of poor state regulation can hardly be used to indict honest ones. Knowing that MEWAs where illegal in their state why did so many state insurance commissioners allow Mega Life to conduct business in their state? Anyone of them could have sent a cist and decease order and shut their doors. Further as a huge proponent of regulation it is odd you are against further regulating a market. The AHP bill would have provided greater and clearer regulation of the MEWA and small group market. The problem is your speaking on a subject you have no exposure to or understanding of outside of Cohn’s book. This shows in more inaccurate statements and generalizations.
    “Meanwhile, you really mean to tell me that if it run by legitimate insurers and not the con artists, the AHP will take all employer groups at the same price?”
    No that is not what I said, STRAWMAN warning, I linked you directly to the bill, how could you butcher it already? It’s almost like your trying to be misleading. The bill said all members have to be allowed to participate in the insurance plan. No one said underwriting for age/sex and geographically won’t be allowed. Again my understanding of adverse selection is far greater then you will ever achieve. They intended AHPs to act similar to small group reform passed in most states. Almost every state, I can’t name one that doesn’t but leave open the possibility there is, has small group guarantee issue. Any employer in that state meeting the definition of small group can purchase a policy. Their intention was any employer in the Association can purchase a policy. I ask you Matthew if hundreds of insurers can deal with the adverse selection of small group reform why could they not do it with AHPs?
    “health insurance is largely distributed and paid for not by employers–as that’s clearly irrational,” Yet most of these systems have secondary insurance provided by employers. Largely as the percentage is not as great but misleading in they also have substantial employer provided benefits.
    “And when a group produces data that shows that at least some small businesses agree with that, Nate, Erick & Deron seem to view it as impossible that they could think such things.”
    I won’t speak for the others but that again is not at all what I said. I am sure there are many employers that feel that way. But I am sure many of them don’t have the knowledge base for me to care what their opinion is. Someone living in CA or NY complaining their small group insurance market is not sufficiently regulated is either a communist or a socialist. Many business owners have no idea what state regulation is already in place. If they don’t know where they are standing their opinion on the surroundings don’t really count for much. That also doesn’;t change the fact there are factual errors in the study, the questions where misleading and bias, and the sampling and state selection was questionably skewed. All are legitimate concerns about the results, it was your projections about our denials of them.
    “Still I’m sure the fact that a rational social insurance system would force Nate to find a real job has nothing to do with his opinions.”
    Again another illustration of your limited comprehension of our healthcare system. Any government reform creates work, it always has. Every time the government passes any bill it creates a new revenue stream for me. COBRA Admin, HIPAA Admin, Ohio Quantitative Health Measures for school districts. Contrary to your new BFF Strawman a new social insurance system would most likely be a boon for my business. I think we would all agree it’s not good for you to be passing judgment on the realness of my job when you don’t even know what it is, how it works, or what it’s role is, sorta makes you look uninformed and foolish.
    Are you wishing my daddy dead? Ya I have pointed out your numerous factual errors, misleading blog post, and minimal comprehension of the US health care system but that is hardly justification for wishing my dad dead. Even more so as I don’t have any inheritance to look forward to. Why do you view everything through such a selfish prism? You assume if I am opposed to the death tax it’s because I have money coming to me. You assume if I try to have an honest discussion on insurance instead of taking the intellectually easy route of blaming them for everything I am one of them. Is the concept of doing the right thing so foreign to you that you can’t comprehend it?
    For a change could you honestly respond to any of the complaints about your accuracy. Specifically how do small group carries cherry pick when most states have guarantee issue and HIPAA has rules against it. Simple question, shouldn’t be hard to answer.
    Margalit Gur-Arie,
    “The only reason healthcare is tied to employment is the existence of commercial, for profit, health insurers.”
    uuuuum no! Try WW2 wage controls started it and current tax code perpetuated it. The rest of your comment is even sillier. Carrier profits are roughly 6% of premium. Medicare fraud and waste is 10% of expenditures(higher number then premium). The calcualtion should be done in absolute dollars not as a % but your already 4% in the hole.
    Further Medicare and single payor claims are all actually paid by insurance companies, who will still want their profit.
    You really should learn how the current system works before wasting your time.

  9. “There can be no conclusions from a study that sampled 5000 and only got 1200 responses.”
    Actually samples of about 1200 are statisically valid IF the sample is truely random and the question(s) is not leading. Of course here the fight is between those who want their incomes protected (Eric Novac, MD as Hell, insurance companies, drug companies, etc) and those who want lower costs and better access, which will mean price controls and budgets for providers.

  10. This entire discussion is preposterous. The opinion of small businesses and\or big business should be irrelevant to the healthcare debate. Healthcare should have nothing to do with employment. The only reason healthcare is tied to employment is the existence of commercial, for profit, health insurers. Commercial health insurance companies are nothing but one big burden on our healthcare system.
    Commercial insurers collect money from members. A portion of that money goes to pay providers for care. Another portion goes to an immense bureaucracy whose goal is to minimize the size of payments to providers. The last portion of the collections goes to the payor’s pocket in the form of profits.
    A national payor, even if it cannot cut bureaucracy costs, will still benefit healthcare by not funneling “profits” out of the system. Did anybody do the math to figure out what the savings would be if no “profits” were allowed to leave the system? I bet the savings would be orders of magnitude higher than all HIT reform put together….

  11. Nate you are too funny. I catch you again in one completely ridiculous statement–that small business are not dropping health insurance. You ignore that and spend valuable electrons whining on and on about HIPAA which has done nothing to increase the number of Americans with health insurance, and clearly doesnt work the way you thnk it does, or everyone would be covered. Except you of ourse seem to think everyone is.
    You then start in about AHPs. Great you pose the straw man of how an unpassable bill says AHPs might work. Instead the reality is (and go read John Cohn’s book Sick if you want the scales to fall from your eyes) that MEWAs and other cross state sold insurance products were and are hotbeds of fraud. Similar products sold to small businesses by “associations” are essentially fraudulent too–do I need to mention Mega Life and Health?
    Meanwhile, you really mean to tell me that if it run by legitimate insurers and not the con artists, the AHP will take all employer groups at the same price? And I thought you were the insurance expert? I look forward to you founding such an insurer and discovering the concept of adverse selection. (Or did you not even ready the parens that you quote from me?)
    But in Nate’s perfect world none of this happens and every small business is happy.
    Whereas in the system suggested by Sam, and most rational people, and used in every sensible country, health insurance is largely distributed and paid for not by employers–as that’s clearly irrational, not to mention expensive–but by some form of social insurance system.
    And when a group produces data that shows that at least some small businesses agree with that, Nate, Erick & Deron seem to view it as impossible that they could think such things. And then Nate wonders off into discussion of a 1996 Act that did nothing to improve the health care system.
    Still I’m sure the fact that a rational social insurance system would force Nate to find a real job has nothing to do with his opinions.
    Never mind Nate, if you’re lucky you can inherit daddy’s money in 2010 before the estate tax goes back up. By the way, great quote from the black chamber of commerce–that one even made it into the West Wing you might remember. Unfortunately when we’re talking about organized propaganda, the left has nothing on the Waltons and their friends–as the piece I referenced shows.

  12. Sam– you can see the concern here— your organization would like to see a much greater role of government in the control over everyone’s health.
    It has been an often refrain from critics of the current administration that their ‘studies’ and ‘science’ are suspect due a preconceived point of view.
    ‘Good’ studies are transparent and reproducible BEFORE significant changes are implemented: one only need to look at the breast cancer- bone marrow transplant fiasco of the 1990s and, to borrow from the energy world, the ‘cold fusion’ hysteria from the same era.
    You are, of course, entitled to your opinion, but to think that the general public should take your tiny study (again, out of the many hundreds of thousands of small businesses in ALL 50 states) as more than merely an attempt to dress up your preconceived notions is a bit overly optimistic.

  13. speaking of lieing how about this whopper, you lied to your readers and claimed;
    “In contrast most AHPs will likely offer stripped-down benefits and underwrite their prospective beneficiaries so that sick people (or employers with disproportionately sick employees) can’t access the plans.”
    If you actually read the bill you would know;
    Eligible employees may not be excluded from the plan because of health status.
    Employers may not exclude employees from the plan by purchasing an individual health insurance policy for the employee based on his or her health status.
    All employers who are AHP members must be eligible for participation under the terms of the plan.
    Must be sponsored by a permanent, bona fide trade or industry organization established for substantial purposes other than to provide medical care and that does not make decisions with regard to membership, payments, or coverage based on health status.
    Must charge dues to its small business members and must not condition membership, dues, or health coverage on the basis of health status.
    Curious Matthew, when you are shown, beyond doubt, that you made a factual error in your writing do you admit to it and correct the error, or like most people on your side ignore it and leave it buried in the comments? There is no question your statement was borne of ignorance, sloopy research or outright dishonesty, now that you have been called out on it what do you do?

  14. Maybe they didn’t have google in 2006 when ou wrote your piece, you might want to look here then reconsider your position;
    http://www.policyandtaxationgroup.com/html/stories.html#stories
    Why does the National Black Chamber of Commerce support the permanent elimination or the reduction of the estate tax? Because many of our family businesses are first generation businesses, where children work along side their parents, in these businesses. They would like to see their children continue the business for the benefit of their community and the family. They do not want to sell the business to pay the estate tax and eliminate the livelihoods for the next generation in addition to the jobs for those who they employ.
    It is a deceptive rationale to represent that “only 1 percent of Americans are affected by the estate tax.” That is the percent of decedents whose estates will actually write a check each year to the IRS. The Polling Company has found that “twice as many family businesses sell out early, rather than pay the tax.”
    “My name is Abby Jensen. My father, Roger Jensen, died June 30th. He was only 54. I am only 19 years and starting college. My brother is only 24. My parents were divorced when I was 8 years old and I have lived with and depended on my father completely.
    Beginning to think your just a big fan of propoganda and shoddy research.

  15. Matthew I see once again you dodging the light. I would like to see a responce from the study sponsors how their claims mesh with HIPAA. They made some very specific claims about carriers cherry picking and dening coverage to sick groups. That is in direct violation of HIPAA. How do carreirs manage to do as the study claims without any press reports or lawsuits?
    Opinons are meant to be debated, facts are not. How can you have a meaningful debate on heathcare reform when one side are telling blatant lies? Further if what you propose is the answer and the solution we need then why must you lie about it? I would think you could support the benefits of reform without having to make up stories to scare people into supporting you.
    That goes to show why studies based on polls and interviews like this one are completly worthless. There is a large majority of the population that have been so mislead and lied to their opinion really has no value. If you pound in someones head that insurance companies cherry pick small groups then ask them if they want a public plan that is guarantee issue of course they are going to say yes. That opinion is based on the lie that insurance companies cherry pick risk whenin fact HIPAA is guarantee issue thus private plans are already guarantee issue.
    Why are you so willing to mislead the public to advance your cause? Can’t it stand on it’s own merits?

  16. Deron et al. A few comments
    1) this is an OP-ED. So yes it has an opinion. Just because it doesn’t agree with yours doesn’t mean it doesn’t have merit.
    2) THCB routinely publishes pieces we don’t agree with. Have you ever noticed us agreeing with Eric Novack or Don Johnson?
    3) And I have to laugh at Nate yet again accusing others of talking BS when he says “I haven’t seen a single small employer, either client or prospect, drop insurance” If Nate has never seen a small business drop coverage he’s, shall we say it politely, outside of the statistical norm, as every major study shows both the absolute number of small employers dropping coverage increasing and the share that they pay of their employees coverage falling too. Not to mention that he criticizes a survey of 1200 for being opinionated and replaces it with a survey of one. But I guess we know what to expect from him already
    4) I run a small business and I would LOVE it if there was ZERO payroll contribution for health care, and there was a progressive tax supported social insurance program that would cover me & my employees’s health care like there is in virtually every other sensible country. I’m happy to pay personal income tax or VAT to cover it.
    5) While philosophically those like Nate with their fingers deep in the till might not like what this study is saying, the current confused political stance of NFIB shows that there is a significant group of the small business community that realizes that it would be MUCH better off under a Federalized Social Insurance system. It’s simple math and i wrote about it a while back here http://www.spot-on.com/archives/holt/2006/05/small_businesses_that_cant_do.html As John Mellencamp once said “most Republicans I know ain’t rich enough to be one” and most small businesses are in the same camp. They helped kill Clinton’s health reform and congratulations as a consequence are paying double the amount for a crappier product than they would have done if that bill had passed.

  17. It is I, the disrupter of blogs on healthcare. There can be no conclusions from a study that sampled 5000 and only got 1200 responses. Again no definition of terms, eg. “healthcare”, “reform”, “small business”.
    I am small business; I am a group of 10 physicians and 8 PA-C’s along with our clinical and clerical support. You have nothing good in mind for my small business. What no one is saying is they all want a free lunch.
    Ravi, if you think reforming healthcare will cut costs, improve wellness and unleash innovation I take it you are advocating less healthcare; healthcare is proven to kill people. The less you have the less it costs. The sooner people die the less they cost to care for.
    IT is a pipe dream in terms of saving money. “Prevention” is not the pervue of healthcare, but rather primary and secondary education. One does not need a codtor to tel them to eat right, get exercise, wear seatbelts, practice safe sex, wash your hands. Early detection (of disease) does require healthcare, but adds tremendously to the total cost. What are you people thinking?!

  18. Matthew/Sarah/et al. – How did you let this submission make the cut onto THCB? It’s dripping with ideology and bias and I think the questions in Eric’s first comment are very appropriate. This is not the pulse of the “small business community”. It is the pulse of the small business community that supports a total government solution.
    You want to know what my small business is doing? We’re investing in wellness programs that actually have the potential to make our employees healthier. We’re paying for gym memberships, offering free yoga and free nutritionist consults, among other things. That’s how you address issues directly.
    Full disclosure: I didn’t read all of the responses on this one because I was so blown away by the original submission.

  19. You claim carriers cherry pick, federal law says;
    First of all, the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires that health insurance be guaranteed issue for all employer groups.
    How does a carrier cherry pick when the policy is guarantee issue?
    http://www.nahu.org/legislative/containing_costs/revised_markets_paper.pdf
    THis is what real studies look like, full of facts and verifiable data, not surveys and opinions.
    “The most common type of state small-group rating law is based on a variation of model legislation developed by the National Association of Insurance Commissioners (NAIC) and allows groups to be rated X % above or X % below an “indexed” rate.
    “Even with these initial rate fluctuations for a new group, small employer rates in these states tend to be much lower than in states where health status rating is not allowed.”
    “1 Maine, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington all either require community rating or modified community rating in their individual health insurance markets.
    2 Connecticut, Florida, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington all allow for either modified community rating or community rating in their group markets. However, New Hampshire will return to modified community rating in their small group market on January 1, 2006 .
    3”
    Did you try to pick the states with the most regressive reform? No wonder employers want change so bad, their legislatures have already destroyed their markets. Why did you not make a single mention of the market these various employers are in? This study pretty clearly shows how much of a failure reform has been to date.

  20. http://en.wikipedia.org/wiki/Health_Insurance_Portability_and_Accountability_Act
    “Title I also limits restrictions that a group health plan can place on benefits for preexisting conditions. Group health plans may refuse to provide benefits relating to preexisting conditions for a period of 12 months after enrollment in the plan or 18 months in the case of late enrollment.[1] However, individuals may reduce this exclusion period if they had group health plan coverage or health insurance prior to enrolling in the plan. Title I allows individuals to reduce the exclusion period by the amount of time that they had “creditable coverage” prior to enrolling in the plan and after any “significant breaks” in coverage”
    “Hidden exclusion periods are not valid under Title I ”
    Are you claiming their is widespread and rampant violation of Federal HIPAA laws?
    Under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), an individual or employer cannot deny coverage based on health status or claims experience.
    http://www.healthamerica.cvty.com/content/items/13317/SmallGroupReform.pdf
    Increasing The Number of Uninsured
    Eliminating an insurer’s ability to set rates based on health status shifts the cost burden to
    younger, healthier members. This may provide artificial, short-term costs savings for highrisk groups. But over time, low-risk groups are priced out of the market – increasing the number of uninsured. This has happened in New York, Rhode Island, Florida, and Colorado when they restricted or eliminated health insurers’ ability to consider health status.
    However, most states passed small group reform measures before the Health
    Insurance Portability and Accountability Act (HIPAA) was passed in 1996. But, as we know, HIPAA includes several provisions to protect the small group market such as guaranteed issue of coverage and guaranteed renewability.
    HIPAA was passed in 1996, your article and study was done in 2008. How did you not know about HIPAA and the numerous changes in law that invalidated almost everything you said?

  21. Eric, thank you for your thoughtful and constructive questions about the methodology and details in the survey used to produce the Taking the Pulse of Main Street report.

    Here is some additional information I hope you will find helpful:
    About the survey questionnaire: good point – we’ll work to get it up on the publications page where the report is posted. In the meantime, you can download the PDF of the questionnaire directly here.
    On the question of defining “fair share”: we asked two questions about small employers’ willingness to contribute for health care, one general and one specific. Here is the exact wording of these two questions:
    General: “M1. As a small employer, are you willing to contribute financially to achieve quality affordable health coverage for your employees?”
    Specific: “M2. What percentage of your total payroll costs would you be willing to contribute, in place of your current health care costs, to guarantee quality health coverage for yourself and your employees: 0 percent, 1-3 percent, 4-7 percent, 8-11 percent, or 12 percent or up?”

    More on methodology (see page 5 for the methodology statement in the report): The whole goal of this survey project and report was to let real small business owners speak for themselves. The surveys were collected primarily through door-to-door outreach – getting face to face with small business owners in their places of business and inviting their input on health care – in downtown business districts and other areas with a high density of locally-owned businesses. Because of the primarily door-to-door nature of the approach, storefront businesses are highly represented compared to other sectors, but respondents did include an impressive array of business types: for instance, auto mechanics, flower shops, hardware stores, small manufacturing, engineering firms, accountants, interior design, restaurants, hair salons… and the list goes on. As to another poster’s comment/question, I can assure you that every completed survey was counted in the analysis.

    And finally, about the funding for the report, the Main Street Alliance commissioned and paid for the report. We are currently operating with start-up funding from donors and foundations, and working to develop a self-sustaining funding model.

  22. There was selection bias in who responded to your survey or selection bias in who calls asking for insurance quotes because what I am hearing every day is 180 degrees different then what you claim.
    I haven’t seen a single small employer, either client or prospect, drop insurance. We agree that small employers want to offer insurance and are willing to pay for it.
    The 12 states worries me. Ya, after seeing what states you surveyed there is no way you can extrapolate these over the country.
    The correlation between quality coverage and high deductibles is wrong, a properly designed high deductible health plan is just as good as any other health plan. Dental should not be insured anyways.
    Just because they have a higher deductible doesn’t mean they have high out of pocket cost, what study do you have that shows OOP is higher in the small group market?
    Sorry just lost all respect for you, this study is trash. HIPAA doesn’t allow preexisting conditions exclusions and hasn’t for years. Your rehashing Urban myths and obviously don’t understand your subject. Group policies also can’t reject applicants for health conditions. Those are basic facts you blow and can’t get right. You wont have any clue or chance of grasping the more complex fact that insurers love bad risk because they charge more for it. If you knew anything about insurance you would know carriers make 6% profit margins, if everyone was healthy they would make 6% of a low number. They love unhealthy groups because they charge more and thus make 6% of a much higher amount.
    “Furthermore, there has been increasing
    attention to the problem of “post-claims underwriting,”
    in which insurers review enrollees’ pre-application medical
    histories after enrollment to retroactively cancel their
    coverage based on claims of preexisting conditions.11”
    Wrong! They cancel coverage when they found out the person hid or lied about information to either get a lower rate or get a policy issued that otherwise would not be.
    Odd that you completely fail to mention the Association Health Plan bill that Democrats have blocked for 12 years that would have allowed small employers to band together and get all the same benefits as large employers and Taft Hartley Union plans….why did you fail to bring that up? Political bias?
    How do you Guarantee Proposal A as affordable? You couldn’t write a more slanted question if you tried. I find anything over $1 unaffordable, there your whole study was just disproved. Besides the connotation how are those participating in your junk science supposed to know what a bare bones policy is? It could be the same plan as your public alternative minus homeopathic care, would that be called bare-bones? Why doesn’t Proposal A say if it is mandatory or people can choose no incurance like proposal B? Some people construe the ability to opt out as a negative so you just biased your study more.
    Did you intentionally avoid states with intrusive small group reform to increase your percentage of respondents that want more? MA, NY, NJ, CA have the highest small group rates and insurance cost in the world, due mainly to small group reform, what did they think of even more regulation?
    Why don’t you do an honest study on CalChoice then explain how we should overlook the failure of small group reform and enact more of it.
    Study is pure BS written by people with no knowledge of insurance.

  23. As the person who did the surveying in Montana, I can you there was no pre-screening of businesses in our state and every survey that was completed was turned in and counted.
    Personally, I thought the language leaned toward the terminology preferred by health insurance corporations (for example, using the term “free market” to describe the offerings of the insurance industry, when prospective customers are often dealing with an oligopoly).

  24. I am a SBO. I believe I would like to be removed from the burden of healthcare. In one of the article, I wrote on blogs.biproinc.com/healthcare, I have proposed a tiered health system.
    I firmly believe that a redesign of healthcare system and policy will not only cut cost down, it will also improve wellness and UNLEASE innovation.
    rgds
    ravi
    http://www.biproinc.com

  25. Even if the report did not select the 1200 sample size based on the results, if the authors tried to get in touch with 5000 firms and only 1200 responded it’s likely that the 1200 that responded have a higher probability of being in favor of health reform since they will feel it’s more worth their time to participate. Looking into how the sample was winnowed down and why or why not that selection might exist would be useful to support the interesting results.

  26. Rick- possibly so– are you against all associations selling insurance?
    if so, you will have a big problem with AARP, which generates hundreds of millions of dollars of revenue per year from selling insurance products.
    Do you have a problem with them?

  27. This is awesome stuff. I think many have taken the word of the National Federation of Independent Business as the barometer of small business desires, and this data shows that’s clearly a false assumption. The NFIB has stood foursquare against most common-sense reforms, and given the results of this study, that would seem to be in opposition to the sentiments of the organization’s own members.
    Don’t wonder too long at why. The answer is pretty simple. One of my co-workers used to work for NFIB, and the key motivation of that organization is this: NFIB wants to sell insurance.
    It is against any reform that will not produce that revenue stream for the organization. And it favors anything that allows groups like itself to sell health insurance.

  28. Sam- a few questions:
    1. of the hundreds of thousands of small businesses, how did you decide on the 1200? i.e. methodology for that is missing from report
    2. release the questionnaire used — it will be instructive as to any bias in the results
    3. specifically which groups paid for this report and who is funding the Alliance?
    4. did you define “fair share” in your questions, specifically?
    I, and the rest of the policy community will take the report more seriously, if the very nice looking report can be substantiated and potentially repeated by other groups, rather than yet another ’emperor has no clothes’ health policy study.

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