Small Business Minnesota Takes a Stand on Affordable Care Act
September 14, 2012 Plymouth, MN — An emerging voice for the 99 percent of businesses in Minnesota that have 100 employees or less, Small Business Minnesota has taken a strong stand in support of the Affordable Care Act (ACA). Today it released its position paper and will host a “no-spin” discussion on the ACA on October 9, 11:30-1:30 at the University of Minnesota Radisson Hotel.
“Small businesses are subsidizing large businesses in the form of tax breaks and higher insurance premiums, said Clark Dircz, chair of Small Business Minnesota’s policy group. “The Affordable Care Act will substantially level the playing field for small businesses. It will lower costs and accelerate growth.”
The ACA puts small businesses in a vastly larger risk pool, so the overall cost of insurance to small business owners will decline.
It will dramatically help to control cost through standardization of benefits and reimbursement rates to providers, and by only paying for treatments that have evidence of being effective.
It will make available affordable health insurance to a large majority of the uninsured today, reducing the subsidy already being paid through insurance premiums by the insured.
Insurance exchanges will make the purchase of insurance simpler and more competitive, putting downward pressure on the price of insurance.
Finally, the ACA will help small businesses attract high quality employees who choose larger companies because of their healthcare benefits. According to a Georgetown University Institute for Health Care Research study, as much as 75% of all employees view health insurance as a major job selection factor.
The U.S. has the highest cost and highest rate of increase of all developed countries.
The United States spent $7,960 on health care per capita in 2009, more than two-and-a-half times other countries in the Organization for Economic Cooperation and Development (OECD). This includes Germany, France and South Korea, for example.
U.S. healthcare costs are also increasing faster than the rest of the developed world. During the last 10 years, according to the US Bureau of Labor Statistics, healthcare costs increased over 100% while incomes have remained essentially flat.
Small businesses are at a big disadvantage when it comes to healthcare premiums.
On top of the overall higher cost in the U.S., small businesses pay much higher health insurance premiums compared to large corporations. For example, the after tax cost of healthcare premiums for a large corporation in a 40% tax bracket is about $6,300 per family. A small business owner in a 15% tax bracket will pay $8,925 for the same coverage, all other factors being equal. This is a difference of $2,625, 40% more than a large employer pays – per family.
Large corporations also have large numbers of employees across which insurance risk is “pooled” or spread, lowering premiums.
The uninsured are expensive to small business owners providing health insurance.
Cost shifting from the uninsured to the insured added to the cost of insurance premiums in 2009. According to U.S. government statistics, this adds an average of $1,100 to the annual premium a family pays. Healthcare for the almost 600,000 uninsured individuals in Minnesota is a cost the insured are already subsidizing through their premiums.
“Small businesses are paying the highest price for the political football healthcare reform has become, said Dircz. “Republicans were the first ones to propose ACA legislation in the Wyden-Bennett Healthy Americans Act in 2007, but are now attacking the Affordable Care Act as a ‘federal takeover of the health care system’ and ‘an affront to liberty’.
About Small Business Minnesota
Small Business Minnesota is a statewide, non-partisan, non-profit association that provides education, advocacy and support for the real needs of small businesses.
The Small Business Minnesota forum on the Affordable Health Care Act will be held October 9th at the University of Minnesota Radisson Hotel from 11:30 to 1:30. For details and to reserve a seat, click here.