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Locke: Fixing Health Care Is Good For Business

Healthcare coverage and the hastle of forms
Healthcare coverage and the hastle of forms

A new push for President Obama’s healthcare planis underway.

Commerce Secretary Gary Locke joined Maria Bartiromo in an exclusive interview after putting out his OpEd in The Wall Street Journal on Monday outlining why “Fixing Health Care Is Good For Business”.

Locke has been speaking to businesses all across the country for the last several months, and one of the biggest issues they're concerned about is the rising cost of health care for them. That number has doubled in the last ten years and it's expected to double again, rising almost 10% a year. As a result, some small businesses are forced to drop health insurance for their employees because they simply can’t afford it.

Would businesses benefit from a public option? Locke believes it's very important that we try to provide competition to the insurance companies, and that's why the president’s proposal and the proposals considered by the House and the Senate are calling for insurance reform.

BARTIROMO: The reform plans on the table look to lower health care costs, and look to insure those 47 million people, or you could say it's 20 million of course, the number is up for debate. But if we are going to insure more people, bring costs down and obviously have fewer doctors, we're already looking at insuring doctors, how is that possible? Can you give us some detail on how it's possible that we could have more people in the pool to insure for less money with fewer doctors? How does that work?

LOCKE: I'm not sure we're calling for fewer doctors; we're talking about smarter delivery of care. We don't have enough family doctors. We don't have enough people who are seeing people for preventive medicine, and the rates that they're being reimbursed at for seniors on Medicare are too low. And we have too many people using emergency rooms when they really should be going to their family physicians, or a primary care physician to really get the preventive measures and early diagnosis, to keep costs low. And that's how we're going to achieve savings. We have so much waste and inefficiency in the current medical system.

If we don’t fix our healthcare system, twenty years from now almost one-third of our entire GDP will be going for health care related costs.

BARTIROMO: The president has three main principles, lower the cost of health care, insure choice of both insurance companies and physicians, and number three, provide quality affordable health care for all Americans. And how?

LOCKE: One way we do that is, for instance, to provide incentives, tax breaks for medium and small businesses to provide care for their employees.

Companies with less than about 20 employees, those companies right now, 78% of those companies offer health care insurance to their employees. But the fact is that those companies pay almost 20% more for the same - to cover their employees, compared to large corporations for exactly the same coverage. So what we really need to do is allow those companies to pool together, so they can have almost as large of a purchasing power to drive down costs, and have the same efficiencies as large companies.

Second of all, for very small companies, we need to give them tax breaks to offer health insurance to their employees, reward them for doing the right thing. But under the proposals on the hill, if they don't want to offer that health care insurance, they would not be required to. But if they do, they would get a tax break. And then the individuals, if they don't offer health care insurance to their employees, those individuals would be able to be part of this large pool.

Locke said, “We are in a twilight period, that previous moment before a problem becomes a crisis”. We will need to wait and see what will happen in the months ahead.

Send us your thoughts. Much more on healthcare reform to come.

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Questions? Comments? Write toinvestoragenda@cnbc.com

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