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The Employer based Health Care System III

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The Employer based Health Care System III Powered By Docstoc
					The Breaking Point
Why health care reform is crucial to small business



                              By: Todd O. McCracken, President
  Why Does Small Business Matter?
• Small Firms:
   – Represent 99.7 percent of all employer firms
   – Employ half of all private sector employees
   – Create between 60 to 80 percent of all net new jobs
   – Produce 13 to 14 times more patents per employee than large
     firms

• The small business share of employment remains around 50 percent

• 78 percent of small businesses have fewer than 10 employees

• 61 percent of small businesses are micro-businesses with fewer than 4
  employees
         Total Premium Increase Compared
         Against Other Economic Indicators
                    2000 - 2006




Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2006
      Annual Premium Increase Compared
      Against Other Economic Indicators
                 2000 - 2006




Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2006
                  Annual Premium Increase by
                        Employer Size




Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2006
*2000- 2003 data uses firm size of 3 to 9, 2004-2006 reports consolidated very small businesses to 3-24 workers
   Comparison of Premium Increases
          by Employer Size




Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2006
*2001 and 2003 data uses firm size of 3 to 9, 2005 and 2006 reports did not distinguish between 3 and 24 employees.
    Percentage of Businesses Offering
      Health Benefits by Firm Size




Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2006; KPMG Survey of Employer-Sponsored Health Benefits, 1996.
     Overall Percentage of Firms
 Offering Health Benefits, 2000 - 2006




Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006
Percentage of Firms Offering Health
   Benefits, by Firm Size in 2006




Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005
Percentage of Businesses Offering More than
   One Health Plan Option by Firm Size
  Percentage of Small Employers Considering
      Changes to Employee Health Plans




Source: NSBA Member Survey, October 2005
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005
        Expected Changes to Employee
               Insurance Plans




Source: NSBA Member Survey, October 2005
    Percentage of Employee Premium
          Paid for by Employer




Source: NSBA Member Survey, October 2005
              Employee Premium Cost-Sharing Trend
                     Small vs Large Business




Source:Hewitt Associates, US Bureau of Labor Statistics
             Allowable State Variations Within a
                       Particular Plan




Source: National Association of Insurance Commissioners
                        Piecemeal Solutions:
                              Why They Won’t Work

•   Association Health Plans (AHPs)
     – Attempt to provide cost-cutting by allowing trade-associations to create a national pool for
       their members under a new set of federal rules
          • Would create adverse selection and segment the market due to AHP’s ability to skim off
            the healthiest individuals.

•   Small Employer Health Benefit Plans (SEHPB)
     – Patterned after federal employees’ health plan, SEHPBs would establish a federally-run
       insurance pool for small businesses
          • Would create adverse selection on part of the SEHPB due to a rich benefit package,
            guarantee issue and government subsidies on the plan


•   Enzi Health Care Proposal
     – Would allow for limited AHPs with state oversight and preempt certain states’ rating rules
          • Best of all three initiatives, but doesn’t go far enough in creating broad reform and
            enhancing consumer involvement
           NSBA Health Care Proposal
•   Individual Responsibility
     –   All individuals would be required to obtain coverage providing for the spreading of risk with all
         individuals in the insurance pool.
•   Broad Reform of the Insurance Market
     –   Establishment of a federally-defined basic minimum package that is truly basic in nature
     –   Actuairily-determined rate bands established within which insurance companies could price their
         products
     –   Insurance companies would operate under a guarantee issue system
     –   States would retain oversight and authority over all plans under the federal framework
•   Provide Subsidies for Low- Income
     –   Individuals and families would receive federal financial assistance for health premiums, based upon
         income
•   Reshape Health Insurance Tax Incentives
     –   Tax parity for all purchase of health insurance, whether purchased through an employer or individually
     –   Cap tax-preference on health expenditures at the premium level for the required package
•   Reduce Costs and Improve Quality
     –   Instituting increased consumerism requires ample information be available to consumers
     –   Increased IT in health care through electronic medical records and procedures to both reduce errors and
         increase efficiency
     –   Pay-for-Performance based on actual health outcomes and standards established through evidence-based
         indicators and protocols
ain states’ rating rules
• Best of all three initiatives, but doesn’t go far enough in creating broad reform and enhancing consumer involvement

NSBA Health Care Proposal
• • Individual Responsibility
–
– – – –

All individuals would be required to obtain coverage providing for the spreading of risk with all individuals in the insurance pool.
Establishment of a federally-defined basic minimum package that is truly basic in nature Actuairily-determined rate bands established within which insurance companies could price their products Insurance companies would operate under a guarantee issue system States would retain oversight and authority over all plans under the federal framework

Broad Reform of the Insurance Market

•

Provide Subsidies for Low- Income
– Individuals and families would receive federal financial assistance for health premiums, based upon income
Tax parity for all purchase of health insurance, whether purchased through an employer or individually Cap tax-preference on health expenditures at the premium level for the required package

•
•

Reshape Health Insurance Tax Incentives
– –

Reduce Costs and Improve Quality
– –
–

Instituting increased consumerism requires ample information be available to consumers Increased IT in health care through electronic medical records and procedures to both reduce errors and increase efficiency Pay-for-Performance based on actual health outcomes and standards established through evidence-based indicators and protocols


				
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posted:4/12/2008
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