As the health care reform debate rages in the Pennsylvania legislature, small business is focused on two key issues, according to Eileen Anderson, government relations manager of SMC Business Councils, a leading small business association in the state.
Those issues are cost containment and small group health insurance reform.
“The costs will eat us alive,” Anderson says. She and others are concerned that many lawmakers are not recognizing that problem. Last week, the Pennsylvania House approved SB 1137 – called ABC, or the “Access to Basic Care Bill,” which aims to extend more-affordable health coverage to almost 300,000 additional Pennsylvanians.
The bill expands the state’s adultBasic programs to residents earning up to 200% of the federal poverty level. ABC also provides for grants to low-wage small businesses that already offer health insurance to help them cope with the cost.
The bill does not mandate that individuals buy insurance, but it does provide subsidies. In that scenario, Anderson says, “just the sick people will buy the insurance, which will skew things.” Anderson says.
Paying for those subsidies is another worry. Some Republicans in particular are balking at the program’s tab, which is expected to reach $1.1 billion by 2012-2013, according to an Associated Press report. As a result, the bill is not certain to pass the pending Senate vote.
Anderson points to Massachusetts as an example of what happens when you address coverage before costs. “They are facing double- digit rate increases,” she says. “Expanding coverage does nothing to slow cost increases.”
What would help, Anderson says, is for legislators to approve a reauthorization of Pennsylvania’s Health Care Cost Containment Council. “That is a ground-breaking institution,” she says. The Council collects , analyzes, and publishes data about hospitals, including quality and outcomes information.
To lower costs, “We need to get that kind of information into the hands of employers and consumers so they can act on it,” Anderson says. The bill reauthorizing the Council could be voted on by the House as early as next week.
Small business owners are also eager to see the state’s small group health insurance regulations reformed. That bill should also be near a House vote.
“We are one of only two states that have not yet reformed the small group insurance market,” says Anderson. And the volatility of insurance rates is one of the things that hits small business hard. “One year your rates can go up 5%, and the next year they go up 50%,” she explains.
Small business owners are hoping that new legislation will at least eliminate underwriting based on medical status (HB 2005). Insurers could still set rates based on age, family size, and geographic location. “It’s always a trade off,” Anderson says. “But this should reduce the volatility somewhat.”
Pennsylvania governor Ed Rendell has been aggressively pushing for health care reform. The governor’s office points out that a recent Economic Policy Institute report
shows that over the last few years, Pennsylvania has lost more employer-based health care coverage for people younger than 65 than almost any other state.
Most Pennsylvanians still receive their health care today through an employer, but the administration hopes to “…stem this erosion of coverage as quickly as possible,” according to a quote from Pennsylvania budget secretary Michael Masch in a recent press release.
Editor’s note: Read this related Blog , “PA House Rejects Real Health Care Reform,” at the PolicyBlog.
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