Looking for Small Business Health Insurance Solutions

Looking for Small Business Health Insurance Solutions

By Lt. Governor John C. Carney, Jr.

– Recent surveys estimate that the average cost of health insurance will rise by about 15 percent in 2004. For those owning or working for small businesses, these increases will be even higher and more financially painful.

Self-proprietors, small business owners and their employees are increasingly faced with a incredibly difficult decision: Continue paying for health insurance that costs dramatically more each year or roll the dice and join the ranks of the uninsured. Unfortunately, neither answer is satisfactory.

Those who choose to go uninsured leave themselves exposed to debilitating hospital and doctor bills should they need any major medical attention. Meanwhile, those employers and employees who have continued to pay for insurance have had to deal with health insurance premiums that have risen every year since 1996. In most years, those increases have been in double-digits.

This is not a new problem and there are no simple solutions. A multitude of factors drive the cost of insurance. Hospital and doctors costs, reimbursement rates, uncompensated care, administrative costs and the overall health, size and age of the insured group are just a few of the factors.

Rising premiums and an increasing number of uninsured is a problem nationwide and in Delaware. While programs like the Community Health Access Program, Medicaid and CHIP have reduced the number of uninsured in Delaware in recent years, more and more small businesspeople who have been forced to stop paying for insurance threaten to reverse that trend.

Not surprisingly, addressing the issue of rising premiums has become a priority for the business community. The state House of Representatives created the Small Business Health Insurance Task Force to examine this issue and to identify alternatives that might provide relief to small business owners and their employees. Along with myself as chair of the group, chambers of commerce from each county were represented along with the state House of Representatives, residents from each county and the state Insurance Department.

The Task Force, which met frequently over a nine-month period last year, heard story after story of small business owners struggling to find affordable health insurance for themselves, their families and their employees. While the Task Force did not have the time or the resources to conduct the kind of research and analysis necessary to recommend a course of action for the business community in Delaware, the group did narrow the focus on a few alternatives that it felt held the most promise.

And perhaps most importantly, the Task Force was unanimous in its belief that work on this issue must remain a priority.

On June 30, the Task Force submitted a lengthy report to the Speaker of the House that included five recommendations for continued work. These included an evaluation of Chapter 72 of Title 18 of the Delaware Code, which was the last attempt at reforming the small group market; a more extensive look at the concept of pooling; an analysis of the effectiveness of a medical management strategy; an update by an independent consultant of a 1995 study that looked at what effect a single-payer system might have in Delaware; and the creation of a forum that would include all the various stakeholders with an interest in health insurance.

The Task Force report suggested that the Delaware Health Care Commission might be an appropriate body to follow through on these recommendations. At its annual strategic planning retreat the Commission decided to follow through on those recommendations and created two committees to do so.

The first group is looking at the 1995 report on a single-payer system with an initial goal of developing recommendations for an updated look at how the system might work in Delaware, including its benefits and unintended consequences. The committee, which has a diverse membership with different interests in our health care system, has been asked to find an independent consultant to put together the study. The second committee has been charged with studying some of more conventional ideas, such as the concept of pooling and evaluating why the most recent reforms do not appear to be working.

Both committees have had an organizational meeting and plan to meet every few weeks over the next couple of months. What they will find or recommend is unknown. What is certain is that our small business community needs relief or at least some options when it comes to health insurance. They simply cannot continue to absorb the hefty premium increases they have been given in recent years. The current alternative, going uninsured, is also unacceptable.

Lt. Governor Carney is chair of the Delaware Health Care Commission