While traveling across New York, I’ve heard from countless small-business owners who are struggling with rapidly rising health care costs. One owner told me about seeing his insurance rate spike when an employee needed heart surgery. Others have had to drop insurance altogether, making it hard to attract and keep the best employees.
Over the years, health care costs have weighed heavily on all Americans, and they’ve weighed especially heavily on our nation’s small businesses. But the Affordable Care Act, the new health care law, is providing immediate relief for small employers and giving hard-working, middle-class families the security they deserve.
Today small companies pay 18 percent more on average than larger employers for the same health coverage for their workers. And one sick employee can send premiums soaring even higher. It’s no wonder that increasingly, small businesses say health care costs are among their biggest expenses.
Small-business owners want to provide coverage to their employees, whom they often view as family, but rising costs frequently make it impossible to do that.
This isn’t just unfair. In an economy where small businesses create two-thirds of our jobs, it’s a tremendous drag on the nation’s economic growth.
The good news is that the new health care law is making coverage more accessible and more affordable for New York small-business owners and their employees. It starts with a small-business tax credit, already available to many businesses, that can reduce insurance costs by more than a third for eligible small employers. This credit will rise to as much as 50 percent in 2014. And President Barack Obama has proposed extending this tax credit further as part of his 2013 budget.
At the same time, the law is giving states the resources to review and turn back huge premium hikes. And any insurer that wants to raise rates 10 percent or more now must explain the reasoning behind the increase.
But these steps are just the beginning. Starting in 2014, small businesses also will have access to state-based affordable insurance exchanges that will allow small firms to purchase insurance coverage just like their bigger competitors.
Exchanges will serve as one-stop shops where small employers can see all their qualified health plan options, compare prices and benefits, and pick the qualified health plan coverage that works best for their businesses and their employees. The marketplaces will also bring more transparency to the market, forcing insurers to compete for business by offering better prices and better service. And even though exchanges will allow small employers to offer employees a range of plans from different insurers, they’ll receive just one bill and write a single check.
Small-business owners are risk takers. They work hard to pursue their dreams. But they should not have to risk their health or the health of their employees in the process. That’s why bringing some fairness to the health insurance market is so important to helping New York’s small businesses achieve their potential.
For too long, small-business owners in New York and across the country have had to face high health insurance prices, unattractive plan options and tough choices. The health care law is finally giving them a health insurance market that works for them.
Jaime R. Torres M.D. is the regional director of the U.S Department of Health and Human Services, serving New York, New Jersey, Puerto Rico, the U.S. Virgin Islands and eight tribal nations.
4/27/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email firstname.lastname@example.org.