Health Care Reform Affects on Business

Author: shawn shouldice Date: February 18, 2011

With the proposal to fold Catamount Health into Vermont Health Access Plan, rates paid to hospitals will be cut to the Medicaid rate, 55%, rather than the 110% rate that is currently set. By cutting these rates in half, the costs of care in hospitals will not be covered. Such a cost shift will result in higher rates for the privately insured. In addition to higher rates, the provider tax will increase and private insurers certainly will not be paying the increase in provider tax out of their profit margins. Neither providers nor insurers will pay for added taxes or reduced reimbursements. This will result in higher premiums and taxes placed on employers and their workers.
Dr Hsiao’s report proposes that those making between $19,000 and $120,000 will be subject to a 15.5% tax – 11% paid by the employer and 4.5% paid by the employee. An article by Cairn Cross on Vermont Tiger on February 7th clearly laid out how lower wage jobs will become a better deal for Vermonters. Today, the value of health care in Vermont is between $5,000 and $8,000. Therefore, employees with high income salaries will be paying more for health care than what it’s worth, with employers paying a majority. Companies with high income wages will no longer see the value in keeping high income jobs in Vermont when they can move those jobs out of state and reduce the cost of health insurance. In addition, those lower income wages will require subsidized health insurance, which in turn is placed on the shoulders of the already hard working entrepreneurs in Vermont.
NFIB/VT understands that the cost of health insurance has been the number one problem facing small businesses for more than 20 years. The status quo simply doesn't work anymore, so we're pushing for reforms that lower cost, increase choice and provide real competition for private insurance. This can be done by focusing on reforms tailored to small businesses:
o        Improve affordability by eliminating wasteful spending in the system (cost containment)
o        Enact insurance market reforms that spur greater competition
o        Create an easier way to shop for and purchase health insurance
o        Provide equity in tax treatment regardless of how insurance is purchased
In Vermont, NFIB/VT has opposed the addition of mandates to health insurance benefits. Without an honest discussion about reigning in health care costs the addition of mandated benefits will only further increase the cost of health insurance.
NFIB/VT defeated an amendment that would have allowed AARP to play a significant role in defining health care reform for small business in Vermont.
NFIB/VT opposed further expansion and the “employer assessment” (tax on employers) to the Catamount Health Plan (CHP), as it is not a financially sustainable program; this program costs taxpayers more and more each year because the health care benefit package is so rich; it is a better plan than most any individual or business can purchase for on their own.
Further information on health care reform in VT can be found here:
February 7, 2011

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