09/20/2005
CONTACT: Martyn Hopper or Michael Shaw, (916) 448-9904
or Tony Malandra, (415) 664-9685
To a panel of California's two health-care-policy-setting agencies, the state Department of Insurance and the California Department of Managed Health Care meeting today at San Francisco City Hall. From Michael Shaw, assistant state director for the 35,000-member California arm of America's largest small-business group, NFIB. Shaw is available by cell for further comment (916) 717-1242
SAN FRANCISCO, Calif. -- "Many small-business owners were effectively pushed to eliminate health benefits as the costs rose at a rate well beyond resources. As a result, we now see that less than 50 percent of small-business owners offer any form of health care to their employees.
"In recent years, many small-business owners have found Consumer Directed Health Plans to be a reasonable solution to their cost-induced inability to offer health benefits to their employees. The creation of Health Savings Accounts in 2003 spurred this nascent product into high gear and, as data has begun to show, offered a glimmer of hope for the 60 percent of the medically uninsured population working in small businesses.
"Approximately 37 percent of individuals and 27 percent of small-business employers purchasing an HSA-compliant plan were previously uninsured. Additionally, small businesses that would otherwise have to eliminate benefits find, instead, a good, affordable health-coverage option.
"A predominant theme among criticisms of CDHP/HSA plans is the shifting of costs away from employers to employees and taxpayers. But much of this criticism ignores our current situations and laws. Even in the absence of a CDHP, cost-shifting exists today in the form of the uninsured visits to the emergency room where taxpayers and the insured foot the bill.
"Arguments that CHDP/HSA plans only benefit the rich are not true, since for 2005, more than 40 percent of HSA-eligible plan purchasers earned less than $50,000. Finally the criticism that Consumer Directed Health Plans are confusing and defer necessary care is just plain silly. There is no such animal as an easily understood insurance policy. Under more traditional plans, a consumer still faces co-pays, deductibles, co-insurance, and a variety of other conditions that apply in one case, but not in another. How does a person with no insurance handle the situation? They go to the emergency room without coverage, making taxpayers and the insured foot the bill. Under a CDHP, costs above and beyond the deductible are covered.
"NFIB believes that CDHP and HSAs provide an affordable product for small businesses and many other Californians. This market continues to grow and new insurance companies and other eligible entities are preparing to enter it. Additional regulations should be approached with great caution."
