Reprinted with permission from the Richmond Times-Dispatch
Our health care system is broken, but for Virginia’s small, family businesses, health care reforms that saddle them with higher taxes and burdensome mandates would make things worse, not better. Unless changes lead to more affordable insurance, more choices for employers and employees, and more competition among health plans, reform legislation will hurt small business — and that, in turn, will hurt all of Virginia.
Small business, after all, accounts for 98 percent of all employers in Virginia and employs nearly half of the commonwealth’s private-sector work force. Dysfunctional health insurance markets threaten the capacity of workers to find and afford health insurance. If you’re going to make things better for Virginia, you have to make things better for small business.
So, how could Congress help Virginia’s small businesses?
Provide greater competition.
Small business needs a health insurance market that is simple to navigate and provides more efficient ways to buy health insurance. With no human resources department, decisions fall to the owner, who is already stretched for time and probably doesn’t know much about health insurance. Small business owners burn hours talking with brokers, reading reams of documents, and filling out forms.
Several states have established or are planning to establish health insurance exchanges as a way to lighten the small firm’s logistical load. It could work a little like the online travel site Travelocity. You could go online, click some buttons, and the exchange enables you to conveniently compare policies that fit your criteria. Additionally, with defined contributions, an employer can provide an employee with funds he can use in the exchange to buy the policy of his choice — kind of like a 401(k). This means one less confusing task for the employer and greater choice and portability for the employee.
Level the playing field.
Small business needs more sensible insurance market rules that put them on similar footing with big businesses. Today, insurance laws give big business powerful advantages over small business.
Many state governments micromanage the details of small business insurance policies, weighing them down with expensive mandates – rules saying they must cover specific conditions. Large, self-insured businesses are exempt from these state requirements. Small business needs the same power as big business to form large, stable risk pools. Large firms can pool risk across state lines, while small firms are prohibited from doing so. Small businesses in Virginia and many other states can’t join together with other firms or trade associations to negotiate for a lower price or a better a package.
As state director of the National Federation of Independent Business, Virginia’s leading small business association, I hear from members constantly who say their insurance premiums continue to climb in the double digits, year over year, leaving them with few affordable choices from which to choose.
Finally, current tax laws bias the market toward employer-sponsored insurance and away from individual policies — a marketplace where small entrepreneurs often purchase insurance. These biases must be removed to give small business and individuals some of the benefits that current law already gives to big business.
Make healthcare more efficient.
Changing the way providers practice medicine means changing the way we pay them.
Reimbursement rules today pay individual doctors to poke, prod, and cut us, but not to make us healthier or keep us well. The rules pay each provider to work in isolation, rather than in teams working together for the patient’s benefit. For better, less costly care, we need to reward the best practices by bundling payments for doctors, nurses, and hospitals who work together. We need to reward providers who produce better medical outcomes. And we need to ensure that providers have adequate data and information technology to make rational decisions.
Congress must decide which path to take: Pass these types of reforms and strengthen small business, or pursue changes that ignore the needs of small businesses, further burdening them and destroying jobs.
Choosing the path that helps small business may require political courage by lawmakers, but the decision shouldn’t be a difficult one considering the consequences at stake for our nation’s job creators.