EDITORIAL: SMALL BUSINESSES NEED HEALTH REFORM NOW

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Many politicians and pundits claim that efforts to reform our health system are moving too quickly. Yet for millions of small business owners like me, health reform cannot happen soon enough.

 

By Vince Mudd

 

For 15 years, I have not only provided access to health insurance for my 45 employees and their family members, but also paid 100 percent of their premiums. I do this because I believe that when employees do not have to spend time dealing with the “problem” of health insurance they are more productive in the workplace. My employees live healthier lives. This benefits them, their families, and ultimately my business and society.

 

Despite these mutual gains, providing health insurance to my employees is simply unsustainable. Last year my small business premiums skyrocketed 18 percent. I wish this were surprising. But the truth is my premiums have risen significantly every one of the 15 years I have been buying coverage for my workers. Unfortunately, my health-care-related stress does not end there. Every year I pay tens of thousands of dollars in medical riders on other business-related policies like liability and property insurance, adding further to my health care costs. I want to focus on my business, not health care. The status quo makes this impossible.

 

Unlike other aspects of my business, I am powerless in the face rising health care costs. I have limited options to solve the problem within the confines of my business model. None of them are satisfactory. I can stop paying my employees’ premiums, cut back or the generosity of the benefits I offer, or change insurance companies every year seeking a “better deal.” (To be clear, there is no such thing as a “better deal” in the world of small business health insurance.) These choices feel forced and out of balance, especially as we try to grow our economy in the face of economic turmoil. No business owner should have to choose between a healthy workforce and a successful business. No American should have to choose between a job they love and their health.

 

Reforms that will relieve me and my colleagues from the stranglehold of an unworkable small business insurance market and rising health care costs are within reach. Proposals in Congress would prevent insurers from charging me more if one of my workers gets sick and would allow me to easily compare and purchase insurance online without limiting myself to the choices offered by my local broker. Most importantly, health reform will provide small business owners with something that is often elusive today – a choice of quality insurance products.

 

Increased choice and competition are two reasons I think that an alternative to private insurance – like a public health insurance option – could be helpful to small business owners. Given the opportunity, I do not know if I would choose to enroll in either a public health insurance option or co-op. I do know, however, that I would like that choice. Finally, health care reform will begin to slow the rate of system-wide health care cost growth, bringing health care cost increases closer to changes in economy-wide productivity, making health insurance more affordable over time.

 

I have heard many detractors say that it is impossible to provide health insurance to every American without costing the system even more than it spends to date. This is not an accurate statement. The fact is that every person paying for health insurance is already, in effect, “paying for” the erratic and dysfunctional care being received by other non-payers. There is so much waste and duplication in the design of the existing system that reform will solve.

 

I will give you a specific example of direct savings every business will realize once we have universal care. Your homework assignment is to pull out your auto insurance policy and premium statement. Note that you are currently being charged between 5-7% of your premium value for “medical”. You’ve been paying this fee for years yet never noticed it - and more than likely - never used it. Once we have reform and everyone is covered, “medical” will be removed from your auto policy and you will save that 5-7% of premium. This is true for boat, RV, home owners, professional liability, general liability and a number of other insurance products that businesses as well as individuals purchase every day. From my rough analysis, I believe we, (businesses and individuals), will see a reduction in premium of between $10 - $30 billion dollars per year. I have demonstrated just one of the many specific savings that will result in health insurance reform.

 

These improvements will allow me to continue to provide insurance to my workers and grow my business. Small business owners do not want a free ride. We want to share in the responsibility for a healthy workforce and a prosperous economy. But we need help. Act now. We have waited long enough.

 

Vince Mudd is a San Diego businessman and owner of San Diego Office Interiors. This piece was originally published in the Congressional Quarterly. The views in this editorial reflect the views of its author and do not necessarily reflect the views of East County Magazine. If you wish to submit an editorial for consideration, contact editor@eastcountymagazine.org.


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