Showing posts with label health care and small business. Show all posts
Showing posts with label health care and small business. Show all posts
Thursday, June 28, 2012
Supreme Court Ruling is a Major Blow to Entrepreneurship, Small Business Owners
In reaction to the ruling by the U.S. Supreme Court today on the "Affordable Care Act," the Small Business & Entrepreneurship Council (SBE Council) said the decision that keeps intact most of the law - including the individual mandate being deemed constitutional as a "tax" - will continue to impose a heavy burden on small business owners and entrepreneurs, thus harming the economy, U.S. competitiveness, job creation and the future of entrepreneurship.
"Most self-employed Americans and small business owners would purchase health insurance for themselves and their employees if they could afford it. The costly, tax-laden health care law with its individual mandate and intrusive regulations missed this entire point. Rather than providing Americans with affordable choices through better competition, the health care law coerces Americans to buy packages designed by government bureaucrats in markets micromanaged by government bureaucrats," said SBE Council President & CEO Karen Kerrigan.
"The individual mandate serves as a gateway to more coercion, where small business owners and individuals will be forced to purchase any number of goods or services that political elites deem in their 'best interest.' Today's ruling by the Supreme Court undercuts freedom, which is essential to economic growth and entrepreneurship. Entrepreneurship is on the decline in the U.S., and we need policies that will encourage risk-taking and start-up activity. Intrusive government policies and punishing taxes, like the Affordable Care Act with its individual mandate, work against a vibrant entrepreneurial ecosystem, " observed Kerrigan.
SBE Council Chief Economist Raymond Keating added:
"The U.S. Supreme Court's decision to uphold ObamaCare is an egregious, irresponsible decision that ignores the clear intent of the U.S. Constitution to limit the powers and reach of government. By allowing the government to force individuals into a commercial transaction just because they are citizens, it's hard to think of any limits that can be placed on federal power - as long as such action is called a tax. As bad as the regulatory environment has been in this nation, the federal government's power to regulate has now de facto expanded. It is critical that Congress step in, and unlike the Supreme Court, abide by the Constitution and repeal the monstrosity that is ObamaCare. If not, the ObamaCare mess of costly taxes and regulations and a vast expansion in federal spending will proceed, along with the threat of an unbridled federal government going on other activist sprees."
According to SBE Council, the U.S. needs a competitive health insurance market, which means it needs a national marketplace with ample choices for small business owners and entrepreneurs. A competitive, national marketplace will produce affordable and innovative choices for small business owners, not one controlled by government.
SBE Council will continue to urge Congress and President Obama to pare back many elements of the health care law that hurt small businesses including the employer mandate, the individual mandate, the health insurance tax, the litany of individual tax increases in the legislation, and "one-size-fits-all" regulations where the federal government is dictating the types of packages that must be offered in the marketplace. In addition, the group is pushing for improvements to Health Savings Accounts (HSAs), which have given small business owners more choice in health coverage but experienced a set back in the new health care law because it imposed various restrictions on usage.
Thursday, March 08, 2012
Grading the States on Health Care Costs
On the morning of February 26, the health committee of the National Governors Association met. According to The Washington Post, the goal was to come up with ideas to reduce state health care costs.
Temporarily putting aside deep divisions over the costly ObamaCare scheme, which faces attacks from Republicans on the presidential campaign trail as well as a Supreme Court challenge with arguments to be heard in March, there was a different emphasis. The Post reported that "both Obama's assistant health secretary, Howard Koh, and Iowa Gov. Terry Branstad, a major opponent who sued to block the law, focused Sunday on what they could agree on: cutting medical suffering and costs by encouraging disease prevention and healthier lifestyle choices."
Unfortunately, this is either political fluff, at best, or an expansion of government intrusiveness and busybody-ness, at worst.
A more substantive endeavor would start with a look at the SBE Council's "Health Care Policy Cost Index 2012," which ranks the 50 states and District of Columbia according to key public policies affecting health care costs and the costs of health insurance coverage.
For example, as noted in the report, the Kaiser Family Foundation/Health Research & Educational Trust reported, based on its "2011 Employer Health Benefits Survey," that the average annual premium for employer-sponsored family health coverage increased by 9 percent in 2011 to $15,073.
In terms of broader costs and spending, national health spending continued to rise, but at a slower rate in 2009 and 2010. The latest data from the Centers for Medicare & Medicaid Services noted that expenditures increased by 3.8 percent in 2009 and 3.9 percent in 2010. At the same time, though, government health care spending, and therefore taxpayer costs, have continued to rise rapidly - increasing by 9.7 percent in 2009 and 6.5 percent in 2010.
What drives health care costs higher? Part of the increase is positive, due to new and improved treatments and care. As for the negative aspects, though, costs are pushed higher due to third-party payments (e.g., when employer-provided insurance or a government program pays for treatment, neither the health care provider nor consumer needs to be concerned about costs, as a result prices and utilization increase); and more regulations and mandates, with government overruling the marketplace and forcing health insurers to extend coverage, or assess risk and price services based on political preferences.
The 2012 index ranks the states according to eight criteria. They include both negative measures, along with some positive reforms:
• Health Savings Accounts (HSAs). Health Savings Accounts provide much-needed choice, competition and consumer control in the health insurance marketplace. HSAs are tax-free savings accounts owned and controlled by individuals, with funds deposited tax free into the account by the employee, employer or both, and earnings accumulate tax free. The funds are used to cover regular, predictable medical expenses, and each HSA is tied to a traditional catastrophic insurance plan to cover large health care expenditures.
• Guaranteed Issue for Self-Employed Group of One and the Individual Market. Health insurance represents a significant cost for businesses. Taxes, mandates and regulations increase health care costs, increase the number of uninsured, and act as another disincentive to starting up or locating a business in a high-cost state. Guaranteed issue means that individuals may not be turned down for health insurance coverage no matter the condition of their health or risk status. So, incentives for people to purchase health insurance before they become ill are removed. A guaranteed issue mandate raises health care costs, in this case for the self-employed. The index looks at guaranteed issue for self-employed group of one and for the individual market.
• Community Rating for Small Group Market and the Individual Market. Community rating mandates that an insurer charge the same price for everyone in a defined region regardless of their varying health care risks. So, no matter what the risks involved, everybody pays the same price for insurance. That translates into higher costs across the board. The index includes community rating gauges for both the small group market and the individual market.
• High-Risk Pools. For individuals that cannot get health coverage due to pre-existing conditions, some states have set up high-risk pools. According to the Council for Affordable Health insurance, high-risk pools "provide a safety net for the ‘medically uninsurable' 1% to 2% of the population, who have been denied health insurance coverage because of a pre-existing health condition, or who can only access private coverage that is restricted or has extremely high rates." CAHI notes that "state high-risk pools are a much better alternative to providing coverage for the medically uninsurable than imposing guaranteed issue laws on insurers which eventually increase the cost of insurance for everyone."
• Number of Mandates. Beyond regulations like guaranteed issue and community rating, state laws impose a host of mandated benefits on insurers. These mandates, while often sounding reasonable, carry real and sometimes significant costs. Health care mandates are easy to impose, as politicians take credit for expanded benefits while denying the related costs.
• Per Capita Medicaid Spending. Taxes imposed on entrepreneurs, businesses and consumers are a reflection of the level of government spending. Medicaid spending is a significant cost for taxpayers, whether paid at the state or federal levels. For good measure, as government spends more on a service, in this case health care, the opportunities for waste, fraud, abuse, etc. increase, and spending accelerates faster than it otherwise might due to the incentives at work in government, which can best be summarized as elected officials and their appointees spending other people's money. In the end, as government spends more on health care services, the costs in those services accelerate.
According to these measures, the best 15 states in terms of state health care policies are: 1) South Carolina, 2) Iowa, 3t) Indiana, 3t) South Dakota, 5) Nebraska, 6) Utah, 7) Wyoming, 8) Montana, 9) Alabama, 10) Wisconsin, 11) North Dakota, 12) Oklahoma, 13) Kansas, 14) Alaska, and 15) Tennessee.
Meanwhile, the worst states are: 34t) Florida, 34t) Colorado, 34t) Maryland, 37) Michigan, 38) Pennsylvania, 39) Minnesota, 40t) Delaware, 40t) California, 42) Oregon, 43) District of Columbia, 44) Connecticut, 45) Washington, 46) New Jersey, 47) Vermont, 48) Rhode Island, 49) Massachusetts, 50) Maine, and 51) New York.
In the end, at the federal and state levels, three policy paths actually exist on health care. One is about political fluff and platitudes, which means the status quo. A second option is more government control and interference, and therefore increased costs and diminished care. And the third would mean pro-market reforms that expand choice and competition for consumers and businesses, and restraining the growth in negative costs. The choice is clear, but apparently many elected officials fail to see the obvious.
_______
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.
Temporarily putting aside deep divisions over the costly ObamaCare scheme, which faces attacks from Republicans on the presidential campaign trail as well as a Supreme Court challenge with arguments to be heard in March, there was a different emphasis. The Post reported that "both Obama's assistant health secretary, Howard Koh, and Iowa Gov. Terry Branstad, a major opponent who sued to block the law, focused Sunday on what they could agree on: cutting medical suffering and costs by encouraging disease prevention and healthier lifestyle choices."
Unfortunately, this is either political fluff, at best, or an expansion of government intrusiveness and busybody-ness, at worst.
A more substantive endeavor would start with a look at the SBE Council's "Health Care Policy Cost Index 2012," which ranks the 50 states and District of Columbia according to key public policies affecting health care costs and the costs of health insurance coverage.
For example, as noted in the report, the Kaiser Family Foundation/Health Research & Educational Trust reported, based on its "2011 Employer Health Benefits Survey," that the average annual premium for employer-sponsored family health coverage increased by 9 percent in 2011 to $15,073.
In terms of broader costs and spending, national health spending continued to rise, but at a slower rate in 2009 and 2010. The latest data from the Centers for Medicare & Medicaid Services noted that expenditures increased by 3.8 percent in 2009 and 3.9 percent in 2010. At the same time, though, government health care spending, and therefore taxpayer costs, have continued to rise rapidly - increasing by 9.7 percent in 2009 and 6.5 percent in 2010.
What drives health care costs higher? Part of the increase is positive, due to new and improved treatments and care. As for the negative aspects, though, costs are pushed higher due to third-party payments (e.g., when employer-provided insurance or a government program pays for treatment, neither the health care provider nor consumer needs to be concerned about costs, as a result prices and utilization increase); and more regulations and mandates, with government overruling the marketplace and forcing health insurers to extend coverage, or assess risk and price services based on political preferences.
The 2012 index ranks the states according to eight criteria. They include both negative measures, along with some positive reforms:
• Health Savings Accounts (HSAs). Health Savings Accounts provide much-needed choice, competition and consumer control in the health insurance marketplace. HSAs are tax-free savings accounts owned and controlled by individuals, with funds deposited tax free into the account by the employee, employer or both, and earnings accumulate tax free. The funds are used to cover regular, predictable medical expenses, and each HSA is tied to a traditional catastrophic insurance plan to cover large health care expenditures.
• Guaranteed Issue for Self-Employed Group of One and the Individual Market. Health insurance represents a significant cost for businesses. Taxes, mandates and regulations increase health care costs, increase the number of uninsured, and act as another disincentive to starting up or locating a business in a high-cost state. Guaranteed issue means that individuals may not be turned down for health insurance coverage no matter the condition of their health or risk status. So, incentives for people to purchase health insurance before they become ill are removed. A guaranteed issue mandate raises health care costs, in this case for the self-employed. The index looks at guaranteed issue for self-employed group of one and for the individual market.
• Community Rating for Small Group Market and the Individual Market. Community rating mandates that an insurer charge the same price for everyone in a defined region regardless of their varying health care risks. So, no matter what the risks involved, everybody pays the same price for insurance. That translates into higher costs across the board. The index includes community rating gauges for both the small group market and the individual market.
• High-Risk Pools. For individuals that cannot get health coverage due to pre-existing conditions, some states have set up high-risk pools. According to the Council for Affordable Health insurance, high-risk pools "provide a safety net for the ‘medically uninsurable' 1% to 2% of the population, who have been denied health insurance coverage because of a pre-existing health condition, or who can only access private coverage that is restricted or has extremely high rates." CAHI notes that "state high-risk pools are a much better alternative to providing coverage for the medically uninsurable than imposing guaranteed issue laws on insurers which eventually increase the cost of insurance for everyone."
• Number of Mandates. Beyond regulations like guaranteed issue and community rating, state laws impose a host of mandated benefits on insurers. These mandates, while often sounding reasonable, carry real and sometimes significant costs. Health care mandates are easy to impose, as politicians take credit for expanded benefits while denying the related costs.
• Per Capita Medicaid Spending. Taxes imposed on entrepreneurs, businesses and consumers are a reflection of the level of government spending. Medicaid spending is a significant cost for taxpayers, whether paid at the state or federal levels. For good measure, as government spends more on a service, in this case health care, the opportunities for waste, fraud, abuse, etc. increase, and spending accelerates faster than it otherwise might due to the incentives at work in government, which can best be summarized as elected officials and their appointees spending other people's money. In the end, as government spends more on health care services, the costs in those services accelerate.
According to these measures, the best 15 states in terms of state health care policies are: 1) South Carolina, 2) Iowa, 3t) Indiana, 3t) South Dakota, 5) Nebraska, 6) Utah, 7) Wyoming, 8) Montana, 9) Alabama, 10) Wisconsin, 11) North Dakota, 12) Oklahoma, 13) Kansas, 14) Alaska, and 15) Tennessee.
Meanwhile, the worst states are: 34t) Florida, 34t) Colorado, 34t) Maryland, 37) Michigan, 38) Pennsylvania, 39) Minnesota, 40t) Delaware, 40t) California, 42) Oregon, 43) District of Columbia, 44) Connecticut, 45) Washington, 46) New Jersey, 47) Vermont, 48) Rhode Island, 49) Massachusetts, 50) Maine, and 51) New York.
In the end, at the federal and state levels, three policy paths actually exist on health care. One is about political fluff and platitudes, which means the status quo. A second option is more government control and interference, and therefore increased costs and diminished care. And the third would mean pro-market reforms that expand choice and competition for consumers and businesses, and restraining the growth in negative costs. The choice is clear, but apparently many elected officials fail to see the obvious.
_______
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.
Thursday, February 16, 2012
SBE Council's "Health Care Policy Cost Index 2012" Ranks the States
The Small Business & Entrepreneurship Council (SBE Council) today released its "Health Care Policy Cost Index 2012." The index ranks the 50 states and District of Columbia according to public policy measures that impact the costs of health care and health insurance coverage.
SBE Council chief economist Raymond J. Keating, author of the report, said: "The employer costs of providing health care coverage and the overall cost of health care just keep rising. A big part of these rising costs have to do with unwise and unwarranted government intervention in the health care marketplace. These government-driven costs don't just come from misguided federal policies, but policies in the states as well."
The "Health Care Policy Cost Index 2012" ties together eight measures, including tax treatment of health savings accounts, various forms of guaranteed issue and community rating regulations, the number of insurance coverage mandates, whether or not states have high-risk pools, and spending on government health programs.
Among the 50 states and District of Columbia, the best 10 states in terms of state health care policies are: 1) South Carolina, 2) Iowa, 3t) Indiana, 3t) South Dakota, 5) Nebraska, 6) Utah, 7) Wyoming, 8) Montana, 9) Alabama, and 10) Wisconsin.
Meanwhile, the 10 worst states are: 42) Oregon, 43) District of Columbia, 44) Connecticut, 45) Washington, 46) New Jersey, 47) Vermont, 48) Rhode Island, 49) Massachusetts, 50) Maine, and 51) New York.
Keating added: "More government programs and spending mean fewer incentives to be concerned about prices and utilization of services. More mandates on insurers inevitably translate into higher insurance costs. And while increased regulation might sound good to many, costs rise as government overrules decisions made in the private, competitive, consumer-centered marketplace. Unfortunately innovation, competition and affordability are all hurt when government overly intrudes."
Keating concluded: "Elected official at the federal and state levels need to move away from more government controls and spending, and towards reforms that expand competition and choice in the private health care marketplace. Of course, this process needs to start with the outright repeal of ObamaCare at the federal level. But there's much that can be done to rein in government-related costs in the states as well."
To see the full rankings and to get a copy of the "Health Care Policy Cost Index 2012," please click here.
SBE Council chief economist Raymond J. Keating, author of the report, said: "The employer costs of providing health care coverage and the overall cost of health care just keep rising. A big part of these rising costs have to do with unwise and unwarranted government intervention in the health care marketplace. These government-driven costs don't just come from misguided federal policies, but policies in the states as well."
The "Health Care Policy Cost Index 2012" ties together eight measures, including tax treatment of health savings accounts, various forms of guaranteed issue and community rating regulations, the number of insurance coverage mandates, whether or not states have high-risk pools, and spending on government health programs.
Among the 50 states and District of Columbia, the best 10 states in terms of state health care policies are: 1) South Carolina, 2) Iowa, 3t) Indiana, 3t) South Dakota, 5) Nebraska, 6) Utah, 7) Wyoming, 8) Montana, 9) Alabama, and 10) Wisconsin.
Meanwhile, the 10 worst states are: 42) Oregon, 43) District of Columbia, 44) Connecticut, 45) Washington, 46) New Jersey, 47) Vermont, 48) Rhode Island, 49) Massachusetts, 50) Maine, and 51) New York.
Keating added: "More government programs and spending mean fewer incentives to be concerned about prices and utilization of services. More mandates on insurers inevitably translate into higher insurance costs. And while increased regulation might sound good to many, costs rise as government overrules decisions made in the private, competitive, consumer-centered marketplace. Unfortunately innovation, competition and affordability are all hurt when government overly intrudes."
Keating concluded: "Elected official at the federal and state levels need to move away from more government controls and spending, and towards reforms that expand competition and choice in the private health care marketplace. Of course, this process needs to start with the outright repeal of ObamaCare at the federal level. But there's much that can be done to rein in government-related costs in the states as well."
To see the full rankings and to get a copy of the "Health Care Policy Cost Index 2012," please click here.
Monday, April 26, 2010
Fight Over ObamaCare Not Over Yet
The fight over ObamaCare is not over yet.
Indeed, from a small business perspective, it better not be. After all, if the battle is over, the entrepreneurial sector faces the inevitability of skyrocketing costs, including higher health coverage premiums, reduced choices in the marketplace, and increased taxes.
But why wouldn't the debate be over? The bill passed, was signed into law, and that is that, right?
Well, there is the little matter that the American people are not happy with ObamaCare, nor with the overall jump in the size and reach of government...
Read the rest of this SBE Council Cybercolumn by chief economist Ray Keating here.
Indeed, from a small business perspective, it better not be. After all, if the battle is over, the entrepreneurial sector faces the inevitability of skyrocketing costs, including higher health coverage premiums, reduced choices in the marketplace, and increased taxes.
But why wouldn't the debate be over? The bill passed, was signed into law, and that is that, right?
Well, there is the little matter that the American people are not happy with ObamaCare, nor with the overall jump in the size and reach of government...
Read the rest of this SBE Council Cybercolumn by chief economist Ray Keating here.
Tuesday, December 08, 2009
Groups Outline Small Business Opposition to Reid Health Bill
The Small Business & Entrepreneurship Council (SBE Council) joined nine other business groups representing small business, to make Members of the United States Senate aware that minor changes to the Reid bill aimed towards “improving” its effectiveness for small firms will not mollify the organization’s grave concerns “about the bill’s far-reaching impact on business costs, the economy and our nation’s health care system.” In a letter sent to all U.S. Senators on December 7, the groups wrote that the Reid bill, HR 3590, will lead to higher costs and increased burdens on small businesses.
“Meaningful and serious reform legislation will reduce health coverage costs and bend the cost trajectory down – not only for public plans, but most importantly for individuals and businesses of all sizes. HR 3590 does not measure up to this key objective,” wrote the organizations.
SBE Council joined the Associated Builders and Contractors, Associated General Contractors, Independent Electrical Contractors, International Foodservice Distributors Association, International Franchise Association, National Association of Manufacturers, National Association of Wholesaler-Distributors, National Retail Federation and the U.S. Chamber of Commerce in signing the letter.
Above and beyond the fact that HR 3590 does not reduce health coverage costs for small businesses, the groups reviewed a range of concerns about the legislation including new taxes and regulations that will make health insurance more expensive, not less. The groups expressed opposition to new taxes, fees and penalties totaling nearly half a trillion dollars, which fall “disproportionately on the backs of small business.”
According to the letter: “Small firms are in desperate need of this precious capital for job creation, investment, business expansion and survival.” The letter questions the usefulness of the small business “tax credit,” conveying that “Even if the tax credit were substantially enhanced and lengthened, the overall cost of HR 3590 to taxpayers and the economy – combined with the specter of the status quo at best when it comes to premium costs, on top of tax increases, mandates, government-designed insurance and harsh penalties – far outweigh minor attempts to fix a bill that is flawed in its overall approach.”
The groups urge the Senate to “start over and begin work on a new legislative approach that addresses the concerns of America’s small businesses.” To read the letter in its entirety, please click here.
Karen Kerrigan, President & CEO
“Meaningful and serious reform legislation will reduce health coverage costs and bend the cost trajectory down – not only for public plans, but most importantly for individuals and businesses of all sizes. HR 3590 does not measure up to this key objective,” wrote the organizations.
SBE Council joined the Associated Builders and Contractors, Associated General Contractors, Independent Electrical Contractors, International Foodservice Distributors Association, International Franchise Association, National Association of Manufacturers, National Association of Wholesaler-Distributors, National Retail Federation and the U.S. Chamber of Commerce in signing the letter.
Above and beyond the fact that HR 3590 does not reduce health coverage costs for small businesses, the groups reviewed a range of concerns about the legislation including new taxes and regulations that will make health insurance more expensive, not less. The groups expressed opposition to new taxes, fees and penalties totaling nearly half a trillion dollars, which fall “disproportionately on the backs of small business.”
According to the letter: “Small firms are in desperate need of this precious capital for job creation, investment, business expansion and survival.” The letter questions the usefulness of the small business “tax credit,” conveying that “Even if the tax credit were substantially enhanced and lengthened, the overall cost of HR 3590 to taxpayers and the economy – combined with the specter of the status quo at best when it comes to premium costs, on top of tax increases, mandates, government-designed insurance and harsh penalties – far outweigh minor attempts to fix a bill that is flawed in its overall approach.”
The groups urge the Senate to “start over and begin work on a new legislative approach that addresses the concerns of America’s small businesses.” To read the letter in its entirety, please click here.
Karen Kerrigan, President & CEO
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