Your Health Policy Has Been Canceled
We got a letter earlier this month from our company health-insurance provider, informing us that our policy had been canceled for late payment of the premium. No warning or notice, just a cancellation letter. After lots of begging and pleading, a $3,700 check, and four days of heartburn for yours truly, we got it reinstated.
I suspected that the real reason for the cancellation was that we had the audacity to actually file some significant claims. The policy has a $5,000 deductible, but I had an appendectomy last year (about $18,000) and a few other claims as well. The insurance company assured us that this was not the case: Lots of small businesses had gotten cancellation notices, because lots of companies are falling behind on their premiums in this economy and the insurance company is cracking down.
Somehow I didn't find that very reassuring. On the contrary, this incident reinforced my strong conviction that the idea that health care reform isn't good for small businesses is arrant nonsense. If there is one thing the federal government can do to help my company, health care reform is it.
Consider the position we're in with the above-mentioned incident. Unlike almost anything else we buy, health insurance is not something we can simply get from another vendor. In writing policies, insurance companies require that you have continuous coverage, or else they will exclude coverage for all pre-existing conditions (which when you get to be my age can be a lot of things). Thus cancellation of the policy would have permanently undermined our ability to get insurance.
I'm not saying we should be able to pay late with impunity. But a system in which we are subject to the shifting policies of an all-but-unregulated private insurance company that effectively has the power to deny our ability to get coverage anywhere is absurd.
Further, I had to spend several days sweating this issue, working with our office manager to fix it, trying to decide whether to tell people about the problem or wait until we got it resolved. This was time and energy not spent on anything having to do with what NewWest.Net is in business to do.
While the final components of the reform package remain in flux, it appears certain to include a health insurance exchange in which individuals could choose from an array of plans—probably including a government-sponsored "public option." As an employer, I could choose—or, rather, we collectively as a company could choose—whether to keep our current group plan or use the exchange.
It's more than likely that the exchange would provide better options than our current, minimalist group policy. The company could decide whether to pay a portion of the premiums. If we didn't, we could be subject to a penalty tax, although very small businesses like NewWest.Net would probably be exempted. Either way, we'd compensate people in some fashion—just as we currently pay 50 percent of the group plan premiums even though we're not obliged to provide health insurance.
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In short, the costs to NewWest.Net almost certainly would not go up, and they might go down. The insurance options for employees would improve. Most importantly from my standpoint, the whole issue would go away as something that I had to spend a lot of time worrying about. No more calls from employees wondering why, say, the pharmacy isn't accepting the insurance. No more wrangling with the insurance company and the doctors over why they couldn't agree on the appropriate reimbursement for a particular service.
I fail to see the downside.
The National Federation of Independent Businesses says small businesses should oppose the legislation because it "fails to lower" health care costs, ignoring the fact that there are a lot of issues here besides cost (see above).
It also exaggerates the burden of the "mandate" that would be imposed; it's a non-issue if you already provide health insurance, and if you're too big for the exemption, it's only a matter of equity that you do your part in sharing the costs (your competitors will be similarly obliged). Businesses are already subject to all kinds of mandates, and this one hardly looks especially burdensome.
There is, of course, the issue of how all of this would be paid for, which is a legitimate concern. But that relates to small businesses only insofar as what's bad for the country would be bad for small businesses.
I can understand why insurance companies, pharmaceutical companies, and doctors and other health care providers would oppose reform; it will reduce their pricing power, and thus possibly reduce their income. I can understand why rich people might oppose it, too: Health care isn't a problem for them, and they'll probably have to pay more taxes to solve it for other people. And I can understand why Republicans, as a political strategy, would oppose reform: Failure would be a big defeat for Obama, and a successful reform would be a big feather in the Democratic cap.
But the notion that health care reform is bad for small businesses is little more than a purposefully misleading bag of rhetoric that has nothing to do with the real issues facing small businesses. I desperately hope that most business owners see through it and communicate with their elected representatives accordingly.
Jonathan Weber is the founder, publisher, and CEO of New West, a media company covering life and business in the Rocky Mountain West.