In what is shaping up to be one of the most high-profile issues in the first year of the 111th Congress, health care reform is likely to be the top priority on Capitol Hill until lawmakers take off for the August recess. But what exactly does health care “reform” mean? As always, it depends on who you’re talking to. Although everything is up in the air in terms of viable solutions to the problems facing our health care systems, you can bet that NUCA and other business organizations are making sure that their ever-growing concerns with controlling spiraling and unpredictable insurance costs are known to lawmakers in front of the issue.

Small Business and the U.S. Economy

Although the small business community regularly faces overwhelming challenges in trying to provide quality health care to its employees, it appears that the situation is only growing more ominous. Health insurance costs for small businesses have increased by 130 percent since 2000, making it one of the fastest growing and most unpredictable financial variables facing small businesses.

At the same time, small business plays a critical role in America’s economy by employing more than half of the private sector. In fact, small business has generated 60 to 70 percent of the net new jobs in this country over the past 10 years. At a time when more than 45 million Americans are uninsured, there has never been a better time to drive down the costs of quality care.

Imperative Concepts to Consider

At press time there was a lot of talk about what should be included in a health care reform bill, but the widely anticipated mammoth legislation had yet to be introduced. NUCA’s strategy was to get out in front of the issue and advocate for what the association believes are fundamental concepts that should be a part of a large, comprehensive reform bill.

Over the past several years, NUCA has fully supported such legislation as Association Health Plans (AHP) and Small Business Health Plans (SBHP). Although these bills are no longer politically viable as stand-alone legislation, the association and fellow members of what is now known as the Small Business Coalition for Affordable Health Care (SBCAH) continue to push for the key provisions of prior AHP and SBHP legislation with the goal of increasing the access and affordability of health insurance for small-business owners, employees and the self-employed.

Right now the closest thing to an AHP or SBHP bill out there is the Small Business Health Options Program (SHOP) Act (HR 2360). This bipartisan bill, supported by both business groups and organized labor, aims to make health insurance less costly, more predictable and more accessible. The bill would, among other things:

• allow small businesses to band together in a statewide or nationwide pool;
  
• offer a range of private health plans that have to compete for business in order to keep prices low;
  
• provide small businesses annual tax credits and bonus tax credits if they provide health care and pay 60
• percent or more of their employees’ premiums;
  
• ban the practice of rating insurance based on health status to stabilize premium increases and make them more predictable; and
  
• establish accountability measures to ensure that health plans meet state requirements for financial solvency.

While the chances for passage of the SHOP Act as a stand-alone health care bill are anything but certain, NUCA and the SBCAH will advocate for several provisions that are under consideration during the development of a broader health bill.

Market-Based Pooling Arrangements achieve greater purchasing clout, spread risk and lower administrative costs.
This leads to increased affordability and choices for the purchase of private health insurance for business owners and their employees. Virtually all involved in the health care debate agree that more choices in health care policies are needed, as is innovation. However, innovation is stifled in a system where insurance providers do not face competition. Restrictions on interstate purchases limit choice and restrict innovation.

Tax-Based Health-Insurance Incentives can be used to supplement the cost of private health insurance for employers, the self-employed and individuals. Tax-equity for the self-employed and individuals is a significant step toward creating a more level playing field on the tax treatment of health insurance.

New Health Care Markets, Marketplaces and Products are needed so that small businesses have the flexibility to choose the health insurance packages that best meet the needs of their workforce. These products should be comprised of a range of choices that include traditional insurance products, account-based arrangements and cafeteria plan options that allow consumers the freedom to spend health care dollars as they see fit.

Understandable, Easy-to-Compare Health Care Information. Too often, health care information is difficult to obtain and incomprehensible to consumers. Improved transparency is critical to enhancing consumerism across the health care marketplace. All consumers, including employers, employees and individuals across all insurance markets need accurate and useful information on costs, quality and performance of products.

Reasonable, Predictable and Controllable Insurance Costs. Unpredictable fluctuations are all too common and unfairly cut into the take-home pay of both employers and employees.

Reform Measures Must Be Impartial with Regard to Company Size. Small businesses must be treated the same as large businesses, who currently are allowed to pool resources across state lines and enjoy a reasonable level of regulatory oversight. Small employers are denied the same opportunities. This puts the small business community, which employs millions of hardworking American families, at an unfair disadvantage.

Current Employer Mandates Kill Jobs. These mandates, which require that employers provide health care coverage, penalize small businesses, kill existing and future jobs, and force some to shut their doors. Employer mandates encourage part-time hiring, use of machines and/or outsourcing. The bottom line is that monetary contribution to health coverage by employers has traditionally been voluntary and should remain that way.

Additionally, “Pay-or-Play” provisions are nothing more than a form of employer mandate. This option — where states use their authority to tax employers that don’t provide health care coverage, but give employers the option to avoid the fee by providing coverage — essentially taxes those who can’t afford to pay the tax.

Finally, NUCA believes that although health care reform should proceed rapidly, Congress should ensure that adequate time is spent developing effective policy and incorporate mechanisms for periodic review and revision so that it remains effective.

Eben Wyman is NUCA Vice President of Government Relations.