Business Trends

U.S. Health Care Plans Ignites Mixed Reviews

In Uncategorized on August 3, 2009 at 6:00 pm

Health Care And Small Businesses

According to market research firm IBISWorld, around 162 million people – 61% of the U.S. population under 65 years of age – currently receive health insurance coverage as part of employee benefit plans.

Currently, small businesses are paying up to 18 percent more for coverage compared to large firms.  These higher costs spell out lower profits for the firm, and lower take-home wages for their employees.

Because of the higher costs they face, small-business owners are far less likely to provide health insurance for their workers. Less than half of firms with three to nine workers offer any type of coverage, while 99 percent of firms with 200 or more employees offer employer-sponsored insurance. With costs continuing to rise, more small-business owners have either reduced or dropped coverage.

With the health care reform debate in full swing, proposals working their way through Congress have included the creation of an “insurance exchange,” where both small businesses and individuals can purchase coverage, to including a tax credit for small businesses providing health care coverage for workers.

Concerns continue to be raised over the so called “pay-or-play” fees that are designed to encourage firms to maintain employer-sponsored insurance coverage.  But the current proposals exempt small businesses from these fees. For example, the draft bill from the Senate Health, Education, Labor, and Pensions Committee exempts firms with fewer than 25 workers, which is more than 90 percent of all firms in the United States. However, if a small firm decides not to provide coverage, the exchange provides a way for its workers to get quality coverage at affordable rates.

Mixed Opinions About Health Care Plans

reformAccording to an online survey conducted by Harris Interactive® between July 9 and 13, 2009, there is a 5-to-3 majority supporting the idea of a public or government health plan to compete with private insurance.

In addition to the 5-to-3 majority support of the plan, the survey tested the strengths of three arguments in favor of a public, or government plan and three against it. The three arguments in favor elicited the support of majorities between 68% and 55%:

•A 68% majority thought a public plan would be a valuable alternative to private insurance;
•A 63% majority thought that it would help to keep insurance costs down; and
•A 55% majority thought it would help patients to get better care.

Arguments against a public plan generated mixed reactions:

•A 55% majority agreed it would reduce the freedom of patients to choose the doctors and treatments they want, but
•A 54% majority disagreed that it would be “too much like socialism,” and
•A 56% majority disagreed that it would drive insurance companies out of business.

Putting Patients First Should Be Top Priority

Dr. Donald Palmisano, former president of the American Medical Association and current spokesman for the Coalition to Protect Patients’ Rights (Coalition) and over forty doctors from across the country today urged Members of Congress to slow down health system reform and do it right. The Coalition held a press conference at the National Press Club to urge legislators to put patients first when developing a system overhaul.

“The healthcare system is never closed in the United States. Hospitals never have a holiday and there are no vacations for Emergency Rooms. There are always patients who need care and we must ensure that care is always available,” said Dr. Donald Palmisano. “We are very concerned about the rush to pass healthcare legislation – we want Congress to take their time and do it right. When I was performing surgery, I wasn’t worried about finishing the operation quickly, I was concerned about getting the job done right. Lives depended on it. Now, we’re asking Congress to take their time and do health reform right. Lives are depending on it.”

Also participating in the press conference was Dr. Todd Williamson, a neurologist from Georgia and the president of the Medical Association of Georgia. In addition to serving as a member of the Coalition to Protect Patients’ Rights, Dr. Williamson is leading a group of 11 state, specialty, and county medical associations who are speaking out against key elements of the tri-committee bill.

“We believe that America’s physicians deliver the best medical care in the world and we are united in our resolve to preserve the patient-physician relationship,” Dr. Todd Williamson said. “Patient choice must be a key tenet of any health reform proposal. Implementing a government-backed insurance program will not give a patient added choices – it will eventually allow him or her only one option, the public option.”

After voicing their concern about rushed legislation at the press conference, doctors met with Members of Congress on Capitol Hill to talk about working towards a bi-partisan solution that would help the uninsured obtain coverage without negatively affecting the 250 million Americans who have health insurance. The doctors expressed their fear that a government-controlled “public option” would have an inherent advantage in the marketplace because it would ultimately be subsidized by American taxpayers and a government takeover of the American healthcare system would result. Consequently, millions of Americans would be forced from a private plan of their choosing to a government controlled plan, which would lead to long waiting lines to see a doctor, substandard care, and the slowing of medical discovery and innovation.

Dr. Marcy Zwelling-Aamot, an internist from Southern California and a patients-rights advocate said, “Patients must be kept at the center of healthcare reform. As Congress takes the important steps to reform our current system, we need to remember that at the end of the day it is the patient that should be the decision maker about their healthcare, not the government.”

Health Bill Could Benefit 6.6 Million Illegals

A new analysis by the Center for Immigration Studies estimates that 6.6 million uninsured illegal immigrants could receive benefits under the House health reform bill (H.R. 3200). While the bill states that illegal immigrants are not eligible for the new taxpayer-funded affordability credits, there is nothing in the bill to enforce this provision. Congress defeated efforts to require the use of the Systematic Alien Verification for Entitlements (SAVE) program. More than 70 other programs of this kind use SAVE.

Among the findings:

In 2007, there were an estimated 6.6 million illegal immigrants without health insurance who had incomes below 400 percent of poverty, which is the income ceiling for the new affordability premium credits.

If all uninsured illegal immigrants with incomes below 400 percent of poverty received the new credits, the estimated cost to the federal government would be $30.5 billion annually.

The current cost of treating uninsured illegal immigrants at all levels of government is an estimated $4.3 billion a year, primarily at emergency rooms and free clinics.

On July 16 an amendment by Rep. Dean Heller (R-NV) that would have required the use of the Systematic Alien Verification for Entitlements (SAVE) program to prevent illegal immigrants from receiving the affordability credits was defeated by the House Ways and Means Committee.

At present 71 other means-tested federal programs require use of the SAVE system to prevent illegal immigrants and other ineligible non-citizens from accessing them.

Even though there is no mechanism to prevent enrollment, it is likely that many income-eligible illegal immigrants would not enroll out of fear or lack of knowledge of the new programs. Thus the actual costs would be less than the maximum estimate of $30.5 billion. However, if illegal immigrants are legalized and could receive affordability credits, a much larger percentage would be expected to enroll, with a corresponding increase in costs.

Uninsured illegal immigrants tend to use less in health care on average than others without health insurance because they tend to be young. This fact is incorporated into the current cost estimate of $4.3 billion. However, government-provided affordability credits paid to insurance companies are the same for everyone regardless of age or preexisting conditions. Therefore, the younger age of illegals does not result in lower average costs for taxpayers for this program.

It is also worth noting that the report estimates that 38 percent of illegal immigrants had health insurance in 2007. Additionally, the report estimates that there are at least 360,000 uninsured illegal immigrants with incomes above 400 percent of poverty who would not qualify for benefits under H.R. 3200.

It is also possible that illegal immigrants could benefit from the expansion of Medicaid under H.R. 3200. The bill does not require identity verification for those claiming U.S. birth. Of illegal immigrants with incomes under 400 percent of poverty, about half live under 133 percent of poverty, which is the new ceiling for Medicaid eligibility.

On July 30 an amendment by Rep. Nathan Deal (R-GA) that would have required identity variation for those claiming U.S. birth was defeated by the House Energy and Commerce Committee.


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