Friday, May 28, 2010
Health care reform passed Congress in March and now small businesses in San Diego are wondering what's in it for them. Business people and members of the insurance industry met yesterday at the San Diego Regional Chamber of Commerce to take an account of the changes.
SAN DIEGO Health care reform passed Congress in March and now small businesses in San Diego are wondering what's in it for them. Business people and members of the insurance industry met yesterday at the San Diego Regional Chamber of Commerce to take an account of the changes.
The windows of the conference room of the Chamber of Commerce, offer spectacular views of San Diego Bay. But when the conferees turned their attention to health care costs, the picture was not so pretty.
Small businesses pay 18 percent more for their health insurance than big businesses. In fact, a survey by the LA Times shows five major insurers are raising rates up to 23 percent for businesses with 50 or fewer employees.
So, can health care reform make a difference? Micah Weinberg, who studies health care for the New America Foundation, said he thinks it can.
"I'm excited about the exchanges," he said. "I think they really will save money."
Weinberg was one of the speakers at the conference. The "exchanges" he talks about will allow small businesses to team up into buying pools to negotiate better rates.
"I think you can look at the purchasing power of large businesses. You can look at the purchasing power of the people in exchange, like the one run by the public employees and you can see they are in a better position than people in small businesses are," said Weinberg.
Tax credits are another way the health care reform bill, passed by Congress, helps to lower or subsidize the cost of health insurance for small businesses. Starting in 2014, businesses with fewer than 25 employees can receive credits to pay for half of their contributions to employee health insurance plans.
Reactions of people, who gathered at the chamber of commerce, were mixed. Some conferees were downright skeptical.
Richard Blaisdell is a health insurance broker in San Diego. He fears health care reform will not save much money because it doesn't control the rising costs of drugs and hospital care.
"Serious cost containment requires some very difficult decisions that the present national administration or the administration in Sacramento can't make," said Blaisdell.
The CFO of the Chamber of Commerce, Bill Scarfia, said health care reform could actually backfire for small business employees. He points out that businesses that employ 50 or fewer people will face no penalty for not offering health insurance. At the same time, individuals will be required to carry policies and they'll have access to their own buying pools.
"So it is ironic that because there is no penalty and there is no incentive, perhaps you don't need to offer health care," said Scarfia.
But Weinberg, with the New America Foundation, said a similar health reform plan in Massachusetts led to more businesses offering benefits. As for cost containment, he admits American health care reform has a ways to go.
"The most important element is changing the way that we compensate doctors and hospitals." said Weinberg. "That's going to be much more important over the long run for bringing down costs for small business, than these short-run issues related to the tax credits."
The State of California will soon begin working to create insurance buying pools, for small businesses. They must be ready to go by 2014.