I wrote this piece for two small business owners to sign. It was originally published on 2008-04-02 in the Philadelphia Daily News
By PETER HANDLER & KAREN SINGER
NOBODY will benefit more from HB 2005, the health-insurance reform bill now wending its way through the state Legislature, than the commonwealth’s small businesses.
Yet the official lobbyists in Harrisburg for small business – the Chamber of Commerce and the National Federation of Independent Businesses – are fighting to block it.
These so-called “representatives of business” don’t actually represent most small businesses in the state. And what’s worse – and this is the dirty little secret of health-care lobbying in Pennsylvania – the leaders of these organizations are fighting insurance reform out of their own self-interest, not out of a concern for their own members.
The chamber and NFIB provide health insurance to their members. Indeed, a chunk of their budgets comes from this. The reforms contained in the bill – which would protect small businesses and consumers – will cut into their profits.
The Health Insurance Reform Bill will help small businesses and individuals buy affordable health insurance in many ways.
Right now, too many insurers make money not by spreading the risk of illness to all, but by denying affordable coverage to those who most need it. And that often raises insurance rates for small businesses and individuals to unaffordable levels. If, for example, a small business with five or 10 employees hires an individual with a pre-existing medical condition, its insurance rates will skyrocket. (This is known as “medical underwriting.”)
The same thing can happen if too many of those employees are women in childbearing years. HB 2005 prohibits the practice of medical underwriting and discrimination on the basis of sex.
While the bill still allows insurance rates to vary with the age, geographic location and family size of the insured, it sets “rate bands” that limit the extent of the variation. Premiums for the most expensive policy can, at most, cost a third more than the average premiums.
The bill also addresses the shockingly high administrative costs associated with the insurance in the small-business and individual markets. It will drive down those costs by requiring that 85 percent of premium revenues go to health care.
And, finally, the bill gives the state insurance commissioner the power to approve health-insurance premiums just as the commissioner must approve auto premiums. Recent changes in medical practice in the state, like an expanded role for physician’s assistants and regulations on payment for hospital-acquired infections, should reduce health-care costs.
And a new program to insure the uninsured will stop the costs of uncompensated care from being passed on to those who have insurance. Giving the commissioner the power to approve these rates will guarantee that these cost savings are passed on to consumers.
Many owners of small businesses like ours want to provide health insurance for our employees both because it’s the right thing to do and because we know that providing the insurance makes good business sense.
No worker wants to stay in a job without health insurance. So if we can provide health insurance, employees turn over less frequently. That helps us because it takes some time for our employees to learn their jobs.
In addition, the longer our workers stay, the less time we spend training their replacements, which saves money, too. And employees with health insurance are less absent from work due to illness.
The bill will enable small businesses like ours to provide insurance to our employees. Every small business in the state will benefit. So it’s time we small business owners stand up and speak out. Maybe we can drown out the voices of those who claim to speak in our name while only standing up for themselves.
Peter Handler owns the Handler Studio and Karen Singer owns Singer Tileworks, small businesses in Philadelphia.