- 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
Readers of my articles on LikeTheDew will know that I’m not an advocate of defying the law, but I’m about to encourage this where necessary. Often focused on the joys of my grandchildren, this time I’m focused on yours too. I’m talking about Climate Change and our need to DO something about it. I was heartened to read about two activists who set an example in May 2013, protesting about the burning of coal in an attention-seeking move, by taking a small lobster boat named “The Henry David T,” (a reference to Thoreau) to picket the Brayton Point Power Station off the Massach Read on →
I came across this blog written by Gina Crosley-Corcaran titled “Explaining White privilege to a Broke White People." Well, after hearing a few African Americans who have succeeded say that racism and “white privilege” does exist and did not block their ability to achieve, I thought I would review Peggy McIntosh’s “White privilege: Unpacking the Invisible Knapsack” and share a few thoughts and questions about “white privilege.” These are paraphrased from what was asked by Gina Crosley-Carcaran in her article. Mr./Ms. African American who has succeed can you turn on your television or open the front page of your local and/or national newspa Read on →
If you ask me what makes the world spin around, I'll tell you it ain't love or money or even oil from the Middle East. I swear to God, it's irony -- sheer good old-fashioned, unadulterated irony. Sometimes I get the impression the thing has jumped on my back, attached itself like a leech and hung on like the hot Georgia sun in the Dog Days of summer. Irony seems to stalk me wherever I go. Of course, I'm getting a little ahead of myself... *********************************** Man, I wish I could take credit for that look on her face! I'd like to Read on →
A friend of mine, who is liberal, told me recently, "Having grown up in the South in the 1950s, I know something about how it feels to be part of a group you're told is superior. It feels really good. It's a feeling that shouldn't be under-estimated." That got me thinking about the anger of many white men, and why they've lent the force of that anger to the political right. Imagine you're a white man, particularly in a region where racist ideology and patriarchy have been especially powerful. By virtue of being white instead of black, and male instead of female, Read on →