- Important: All passwords were reset on 06/15/11. Old passwords will no longer work. Click here to retrieve your password.
- Subscribe to Our Free Dewsletter
We are non-commercial, all volunteer and supported by our readers. Please help sustain the Dew by making a donation.
Study: Small Businesses Are Unlikely to Opt Out of Health Reform
- This article was created by the Center for American Progress Action Fund.
According to findings published in health policy journal Health Affairs, few small businesses are likely to take advantage of two options allowing them to avoid new regulations under President Obama’s Affordable Care Act. Researchers believe that most small employers will likely eschew the two rules because opting to self-insure or maintain grandfathered insurance plans would leave them open to substantial financial risk should the medical expenses of their employees surge unexpectedly. Furthermore, researchers predict that the majority of small businesses won’t be able to grandfather existing health plans after 2014, as they will fail to meet the necessary requirements.
A report released by the Center for American Progress points out the momentous challenges small employers face in providing affordable, high-quality health insurance plans for themselves and their employees:
Small businesses, which employ 42 million Americans, continue to struggle with the rapidly escalating costs of health insurance. Over the past decade, small-business owners have watched their health insurance premiums rise 133 percent—the same kind of premium growth large businesses have experienced. But because of their smaller scale and thinner margins, they are less able than larger businesses to absorb these increasing costs.
Other factors make it more difficult for small businesses to offer coverage than large businesses. For instance, on average, small businesses pay 18 percent more than big businesses for the same coverage—often due to high broker fees, fixed administrative costs, and adverse selection, which is the upward price spiral that occurs when one plan or market disproportionately attracts high-risk employees.
To combat this obstruction, the ACA has introduced the Small Business Health Options Program (SHOP), which is intended to create a marketplace for small business owners to purchase health insurance for their employees. These proposed SHOP exchanges will allow small businesses to consolidate their buying power so they can purchase high-quality insurance with substantially reduced premiums. By spreading the financial risk associated with insuring high-cost enrollees across a wider pool of employers and employees, the exchanges will keep costs affordable, limit the burden posed by the insurance process, and reduce administrative expenses.
“The exchange is the most important component of health care reform for small businesses and it’s critical states set them up correctly so small businesses get the relief a strong exchange can provide,” said Terry Gardiner, Vice President of Policy and Strategy for Small Business Majority.
Under the ACA, open enrollment for SHOP exchanges should commence sometime in late 2013, while small employers and their employees can expect the exchanges to officially open for business on January 1, 2014.
- Editor's note: This story originally published Feb 9, 2012 at ThinkProgress.org. Photo: licensed by LikeTheDew.com on iStock.com - © DNY59
Worthy of Comment
Also on the Dew
My beloved colleagues in Teh Media sure get on my last damn nerve. Most of the time it's just from sloppy work or jumping on whatever bandwagon is rolling by at the time, something along the lines of a pet peeve. Like when my Twitter list of political reporters blows up with some hashtag meme instead of actual reporting. Today it's #Obamacareinthreewords, launched by that icon of credibility, Rep. Darrell Issa. It's the second time around for that one -- Rep. Kevin McCarthy launched it the first time last June. (@WhiteHouse even got in on it, tweeting "It's.The.Law." Republicans responded with "arrogance Read on →
If you're a head of household in little Nelson, Georgia, you're about to be required to have a gun and ammo. If you want to, and if you can afford it. But not if you're a convicted felon or have certain physical or mental disabilities. The law is just a stupid as the reasons for it. The police chief, also the town's only police officer, said he hoped the law would make Nelson safer. But he didn't have any stats on just how unsafe Nelson is now, before the law. "Very minimal," he told ABC. "I couldn't even give you a percentage." Read on →
Or rather, helped build. Partially. Last week I attended a straw bale house building workshop in West Virginia. The workshop was hosted by Andrew Morrison of StrawBale.com, who runs similar workshops all over the world where one can go and assist with the building of a bale house and learn all about it to go home and build one's own. He's really great, super knowledgeable, funny, and an excellent teacher. He seemed to be everywhere at once, always available for questions, but never hovering or breathing down anyone's necks. Wait, straw? What kind of crazy person builds a house out of straw? Actually, Read on →
For some reason, a letter from the lobbying arm of the Heritage Foundation was characterized as having been received by NBC News, as if it were some sort of privileged communication. In fact, the thing was a press release and rather obviously designed to change the conversation about the Heritage Foundation from trying to defend the indefensible "study" of Hispanic intellectual insufficiency to food stamps, a real two-fer issue. Two-fer in the sense of being offensive on two fronts since the dollars doled out represent a subsidy to industrial agriculture, even as they serve to remind the indigent that, if they're Read on →