Help on the Way for Small Businesses Struggling With Health Care Costs
This week marks the third anniversary of the health care law’s passage. Given the amount of airtime the law still gets, it’s hard to believe the Affordable Care Act has been on the books that long. The law continues to generate controversy from the corridors of Capitol Hill to the sidewalks of Main Street, but in fact many important provisions impacting our country’s primary job creators have been quietly helping small business owners better afford health insurance. However, next year when the bulk of the law’s provisions go into effect, we’ll see even more changes that will help rein in insurance costs for small employers and the millions they employ.
The most important provision coming online in 2014 are the health insurance exchanges, which are the cornerstone of the new law for small businesses. In a nutshell, the exchanges will be a one-stop shop where small businesses can find the right health insurance policy for their needs and budget. It will enable them, for the first time, to band together and leverage their buying power, giving them the kind of clout large businesses currently enjoy.
In the past, the high cost of health insurance made it difficult for many small business owners to offer health insurance to employees. In fact, Small Business Majority’s opinion polling found of those small business owners who don’t offer coverage to their employees, seven in 10 say it’s because they can’t afford it. Additional research found that 56 percent of small business owners offered health insurance to their employees in 2011, which is significantly less than in years past. The Affordable Care Act, and exchanges in particular, will help change that. Our polling found 66 percent of small business owners say they would use an exchange or at least consider using it, compared to a mere 8 percent who say they would not.
Besides allowing small business owners to pool their buying power, the exchange will give them access to support tools enabling them to compare plans and make meaningful choices. The current health care market is incredibly difficult to navigate. Bringing transparency to the costs of services and products in the exchange will enhance entrepreneurs’ decision-making ability, pushing insurers and providers to be more upfront with price information and giving entrepreneurs much-needed clarity as to where their health care dollars are going.
With open enrollment for the exchanges fast approaching in October, it’s important to note that small business owners are also supportive of specific elements of this new marketplace. Three-quarters would want the exchange to provide plans offering prevention and wellness programs and 74 percent hope the exchange educates employees about their plans and helps them enroll, which would do a great deal to cut down on business owners’ administrative duties.
Despite what some politicians or talking heads might say, entrepreneurs support many elements of the law in addition to the exchanges. Our polling found nearly 8 in 10 small business owners support prohibiting health plans from denying coverage based on preexisting conditions, and 72 percent support requiring insurance companies to spend at least 80 percent of small group premiums on patient care and quality improvement, as opposed to plan administration, marketing and profits. Additionally, 65 percent support allowing states to review and potentially reject excessive premium rate increases.
It’s critical small business owners are aware of the many benefits the new law offers. The fact that small businesses have been suffering from high health care costs for decades isn’t front-page news, but that something is coming online soon to help them is.