I was going to leave this topic alone for a while, but like a moth to the flame, I return to the discussion on Health Care Reform.
I’ve been eavesdropping on a variety of newsfeeds and comments from “small business” folks regarding the proposals being discussed in the Senate as well as President Obama’s “Kroger Chat.” What I found interesting is that no one has discussed one of the major reasons why small business struggles with today’s system – government regulations!
If you live in Texas, as I do, or other states with small business “reform” regulations, you may have watched these regulations work against small employers rather than assist. When these “reform” laws were passed over a decade ago, they were created so that “small” employers had options and could not be refused coverage. We would have a competitive marketplace where no business could be denied coverage. Yet, over the years these regulations have become a chain around the neck of businesses and has stymied competition. Why?
Under small employer reform in Texas, insurance providers must provide coverage to a small business, but they can also upcharge in excess of 60% if the account is considered “risky.” What eventually happens to many small businesses (like many printers) is that no other provider is willing to take a small “sick” group without tacking on the surcharge – which in most instances makes switching carriers financially impossible. Thus, the employer is faced with reducing coverage, transferring more and more costs to the employee, and all of the above. The last option being the one most often chosen. The worse case scenario, which is occurring too frequently, is to drop all insurance coverage.
Here’s the law of un-intended consequences in action. The State of Texas passed regulations to supposedly help create a competitive environment for small business. Over time these regulations have created a system which is probably a major reason why Texas leads the U.S. in the un-enviable category of individuals with no insurance coverage.
And here’s what concerns me – where are the questions dealing with the issue of existing state laws which could still be in place after the feds create their “sausage?” Are the state regulatory agencies going to readily give up their hodge-podge of regulations which have always kept the concept of “co-ops” from being reality? No one is talking about the reasons why we should have community rating rather than group rating (although the President has suggested it) . The folks on the left side of the aisle insist that business pay for health care — why shouldn’t EVERYONE be party to bearing this cost. And don’t even get me started about all the government and municipal plans which will probably be exempt from this so called reform. Hmmmm. The more I think about it, maybe socialized medicine isn’t such a bad deal.