Obama's Healthcare Plan

Wait and See
by Liz Larson
Health Alliance Medical Plans

Small businesses expect big changes if Congress passes President-elect Barack Obama’s healthcare proposals. Campaign promises often do not amount to improved policies, but some change seems imminent when it comes to healthcare coverage. Here in central Illinois, companies who provide healthcare coverage for employees, like Eureka-based Cox Transfer, are wondering how they will fare under the new administration. Cox employs about 130 people, mainly truck drivers, and covers around 100 people on their plan.

Cox Transfer owner Robin Honeg says quality health insurance is a priority for the company. “As a small business, we want to give our employees the best, most affordable healthcare coverage. I’d like to see tax incentives for businesses our size who offer health plans and even more incentives if the plan targets employee wellness,” Honeg says.

Employee wellness programs are helping many businesses cut healthcare costs and increase productivity. Cox participates in the Health Alliance program Better Health By Choice, which offers internet-based health coaching and financial incentives for participation. Investing in employees’ good health saves plan sponsors and participants money because premiums remain more affordable when claims are lower. Obama’s plan includes financial support for workplace wellness programs and expansion of health promotion activities by schools, communities and federal, state and local governments.

Reducing the number of uninsured is a top priority for Obama, who suggests doing so in three ways: increasing access to private insurance; expanding existing public health insurance programs such as Medicaid and the State Children’s Health Insurance Program (SCHIP); and creating a new public health plan. The public plan would offer benefits similar to the Federal Employees Health Benefits Program (FEHBP) and would be part of a National Health Insurance Exchange. The exchange would allow anyone to enroll in the public plan or a private plan that meets FEHBP standards and charges reasonable rates which do not depend upon health status. Obama says this exchange would benefit small businesses by allowing them to take advantage of better rates based on a larger risk pool.

Health insurance coverage of some type would be required for all children younger than 18. Increasing Medicaid and SCHIP eligibility means more low-income families would qualify for free or low-cost public coverage. Obama claims the income-based, sliding scale subsidies laid out in his plan would also allow more Americans to purchase private insurance.

Financial incentives for businesses that provide health insurance for employees are at the heart of the Obama-Biden plan. Small businesses would receive tax credits for sharing the cost of employee health plans, given the plans offer quality, affordable coverage. Large employers who do not share the costs of employees’ healthcare coverage would be required to contribute a percentage of their payroll to fund the new public plan. Businesses in between, like Cox Transfer, are unsure where they stand. “We don’t know the size of business that would qualify for tax credits, or which businesses would be taxed, which is the big concern,” Honeg said.

America’s Health Insurance Plans (AHIP), a major health insurance industry association, backs tax incentives for those who purchase insurance through their employers or on the individual market because the measures keep health insurance affordable for more families.

Obama seeks to insulate small businesses from “catastrophic costs”—situations when one employee with a very expensive illness can cause premium increases so high a company and/or its employees are priced out of the health insurance market altogether. Small businesses that sponsor employee health plans would be reimbursed for some catastrophic costs if they apply the money toward reducing employee premiums. Again, it is unclear what size of business would qualify for this assistance.

Congress will play a major role in the passage of any healthcare reform package. Senator Max Baucus of Montana already put forth a proposal similar to Obama’s plan, but the major difference between them may prove to be a deal-breaker: mandated coverage for everyone. AHIP supports mandated coverage along with guarantee-issue individual plans regardless of pre-existing conditions. Obama seeks only to mandate coverage for children. Massachusetts Senator Ted Kennedy’s proposal will also impact the debate.

Owners of businesses like Cox Transfer are left to wait and see. “I imagine that by the time Congress gets a hold of his plan, what has been proposed by Obama and what might be approved will be extremely different,” says Honeg. iBi

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