04/12/2007
by Michelle Bolton
The British and Canadians are all too familiar with the cruel joke played on them by their governments, which provide all citizens universal health care, but -- just as universally -- make it difficult to access.
America's health-care system is largely employer-based, but an equally cruel joke is being played on the medically uninsured here, a joke the Arizona Legislature now has an opportunity to rightly judge "not funny” when it takes up Senate Bill 1107.
First, however, a little background is needed.
Small businesses are at the heart of the 47 million Americans the U.S. Census Bureau estimates without health care. Nearly 63 percent of all uninsured workers are either self-employed or working in private sector firms with fewer than 100 employees (98 percent of all U.S. businesses), according to a study by the Employee Benefit Research Institute. The Kaiser Family Foundation found that while 99 percent of large corporations provided health care to their workers, less than half of small businesses could afford to do so. Those that can pay also pay 18 percent more in health-insurance premiums than the largest firms do -- for the same benefits! -- according to a Commonwealth Fund-supported study.
For more than 20 years, studies conducted by the National Federation of Independent Business, small business' leading advocacy organization, consistently find that the cost of health care the No. 1 worry of its members, and each time it widens its lead over the No. 2 concern out of 75 problems measured by NFIB.
Finding a solution, then, to America's top domestic crisis begins with small business.
While not the biggest players, states contribute to the problem of the medically uninsured, and, therefore, can help with the solution. As the Council for Affordable Health Insurance put it in its State Health Insurance Index 2006: A 50-State Comparison of the Nation's Health Insurance Market report, "Surveys of the uninsured consistently show that the cost of health insurance is the primary reason for their being uninsured … The general public and the media are largely unaware that state legislatures have a significant impact on the cost of health insurance premiums in the small group (i.e., 2 to 50 employees) and individual (i.e., individuals buy their own policies) health insurance markets. Because regulations vary from state to state, the cost of health insurance premiums can differ widely on the state where one lives."
The regulations referred to are legal requirements (mandates) put on health insurers by states to cover this procedure or that. Mandates are what drive up health-care costs, and with each increase comes a new wave of medically uninsured. Another CAHI report, Health Insurance Mandates in the States 2006, found Arizona with 29 such mandates, more than twice the number of Idaho, the lowest-mandate state, but not nearly as bad as Minnesota, the highest-mandate state with 62.
Last year, former state Rep. Doug Quelland authored House Bill 2698, which Gov. Janet Napolitano signed into law, giving health insurers the flexibility of offering essential-benefits plans to businesses with between two and 25 employees. These insurance products take the yoke of mandates off the backs off of seller and buyer, allowing them to better tailor needs and costs.
Earlier this legislative session, HB 2757 was drafted to provide more people with the opportunity to purchase an essential benefits plan to fit their needs and financial wherewithal. The bill had passed the Arizona House by a 32-25 vote, but not before coming in for some verbal abuse, the most ridiculous of which was a claim that it would take health care away from people. Unfortunately, the misinformation provided by the opposition allowed the Senate Health Committee to end the bill's life at the end of March.
Adding sting to this illogical and hypocritical slap in the face is a long-time state program, Health Care Group, for small businesses which itself offers reduced-mandate plans. But, apparently no one has a problem with government providing the very same product.
Thankfully, there are lawmakers that get this cruel joke and continue to work to ensure that more people have broader options in health insurance. On April 12, the House Appropriations Committee amended SB 1107 with the same language of HB 2757, the bill that failed the Senate Health Committee just a few weeks earlier. SB 1107 would extend the provision in last year's law to include individuals. The amendment authored by state Rep. Kirk Adams, a small-business owner, would also increase the group size to 50 employees in order to meet a federal requirement. All SB 1107 seeks to do is put some form of health care in the hands of people. It does not prohibit anyone from having health insurance with more benefits.
The root cause of America's medically uninsured is a small-business owner's inability to afford health care, and only three things will turn that around: more competition among insurance carriers in the small-group market, development of larger purchasing pools and mandate reform.
I remain optimistic that the Arizona Legislature and Gov. Napolitano will team up once again to lead the way for other states to follow by no longer finding humor in the cruel joke played on the medically uninsured.
Michelle Bolton is Arizona state director for the National Federation of Independent Business.
