(by SBAM’s Vice President Small Business Services Scott Lyon)
The Small Business Association of Michigan (SBAM) and our members – 8,500 business owners and their 100,000+ employees – from all across the state, understand the need for health care/health insurance reform. We recognize that the health care system is a problem for companies who purchase coverage in the small group or individual market – it is a problem because health care simply costs too much. The ways these costs manifest themselves to a small business owner are via premiums. But, it is very important to understand that the cost of delivering health care and the frequency of use drive premiums, not the other way around. The current health bills being reconciled in Congress seem to miss this point.
Therefore, as the Senate and House leadership continue its work toward health care/health insurance reform, SBAM has many concerns and four overriding questions:
- Whatever happened to the goal of lowering health care costs? CBO estimates that the change in the average premium per person resulting from the legislation would be negligible (relative to current law). The individual market fares much worse, and is estimated to increase an additional 10% – 13%. Remember that normal health care inflation runs on average about 10% a year. In other words, this legislation badly misses the point that President Obama has been trumpeting; that is, the legislation must bend the cost curve, or in layman’s terms, must slow or reverse the rising cost of health care.
- When the tax credits, grants, etc. – that simply mask the actual cost to provide insurance to employees – end, will small employers be able to afford coverage or the fines? How many small businesses will close their doors as a result of this legislation?
- Is the Michigan economy really in a position to spend our tax dollars funding healthcare for other states, each of which enjoy a better economy and lower unemployment?
- As a candidate, President Obama promised us that healthcare negotiations would be covered by C-SPAN “so that the American people can see what the choices are.” Really, when should we tune in?
The uninsured need a solution, but the solution being considered has the real potential to economic disaster for everyone attached to the health care system including employers, employees, providers and patients. The danger is that it will cost many times the $1 trillion price tag now estimated. Outside of Washington, who in their right mind would consider such a thing? We urge Congress to reject this legislation.