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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legitimate surveyTed RoepilesPhilip Micali of bWell-informedMargalit Gur-Arie Recent comment authors
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legitimate survey
Guest

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.

Ted Roe
Guest

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… Read more »

piles
Guest

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.

Philip Micali of bWell-informed
Guest

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.

Nate
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Nate

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.… Read more »

Nate
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Nate

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.

Nate
Guest
Nate

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… Read more »

Nate
Guest
Nate

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… Read more »

Peter
Guest
Peter

“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.

Margalit Gur-Arie
Guest

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… Read more »

Eric Novack
Guest
Eric Novack

Matthew- I am an equal opportunity skeptic.

Matthew Holt
Guest

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… Read more »

Eric Novack
Guest
Eric Novack

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,… Read more »

Nate
Guest
Nate
Nate
Guest
Nate

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… Read more »