Posted by Kristie Arslan - My days, and nights, have recently been spent reading through the 615-page draft version of the health reform bill
released by Senator Edward Kennedy (D-Mass.) and the Senate Committee
on Health, Education, Labor & Pensions. Talk about bedtime
reading. It is a monster of a bill, known as the Affordable Health
Choices Act, which will certainly change the way our health care system
works today.
According to Sen. Kennedy and his colleagues on the committee,
health coverage will be a requirement rather than a luxury. All
Americans would be required to purchase a “qualified” health insurance
plan. The government will determine what plans are deemed
“qualified”. You will be responsible for reporting to the government
that you have health insurance. Should you go without coverage, you
will have to pay a tax. All you employers out there will also be
mandated to provide insurance to your workers and if you do not, you
will also pay a tax. There will be a small employer exemption; however
a decision has not yet been made on whether it will be based on
revenue, payroll or number of employees. Depending on this exemption,
this legislation may push many micro-businesses back into the business
of managing health care for their employees. Only 18% of businesses
with ten or less employees are currently providing employer-based
health coverage [NASE Study, 2008].
While the majority of small business owners want to assist their
workers with affording health coverage, many businesses do not want to
administer a health care plan. For a micro-business owner this is a
cumbersome task and one they are not trained to do.
Significant market reforms, both positive and negative, are also
included in the bill. A plus for the self-employed is that the
Affordable Health Choices Act would require insurance companies to
provide coverage to all regardless of their health status, gender or
other factors. Many self-employed, due to an illness or health
problem, are denied insurance or only have available to them high
priced or shoddy coverage options. On the down side is that this
legislation will certainly get the government into the health care game.
A new government-run health insurance option will be created,
similar to Medicare, which individuals and small businesses could
select for coverage. Additionally, a new Medical Advisory Council
(MAC) would be created to determine what are those “qualified” plans
mentioned above. This federal body will determine what type of
coverage and the amount of that coverage that must be the minimum
included in all health policies. This may ensure that important
preventive screenings are included in all health plans. However, this
also means that business owners and individuals may not have as much
choice or flexibility in creating the type of health policy they think
is best for them, their business and/or their families. The
determinations of the MAC could have a profound affect on the cost of
health plans as well.
On the tax front, there is a tax credit for individuals to help them
purchase coverage and a small business tax credit mentioned, though it
seems the formula for determining how much of a credit a small business
will receive is very confusing. Disappointingly, the Kennedy bill does
not address many of the tax inequities faced by the self-employed. For
example, sole-proprietors will still not receive a business deduction
for health insurance and thus, will continue to pay extra taxes that no
other business has to pay.
Overall, my biggest concern about the Affordable Health Choices Act
and many of the other suggestions out there for health reform is the
complexity and additional bureaucracy these reforms will create in our
health care system. Shouldn’t the goal be to make the system easier to
access and understand? One of the best qualities about our legislative
process is that there are so many very smart people that are involved
with making an idea become a reality. Yet, when you have been part of
the process for so long, or as they say “in the beltway,” you can
easily overlook the practicalities of the outside world. Many of the
good ideas in health reform are becoming convoluted and many of the bad
ideas are starting to look good. We need these very smart people to
think about what it is like to be a small business owner or a
self-employed individual out on your own. Most importantly, we need
them to remember what my wise grandfather, an entrepreneur himself,
often imparts to me: Keep It Simple, Stupid!