Health Insurance Exchanges: The single biggest help to small business

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Mar 14, 2012 No Comments ›› Admin

March 14, 2012

“Costs keep rising,” the small business owner told me. “The worst is health insurance. We got a 27% increase in premiums this year. Can you do something about that?”

The single biggest help the state can give small businesses is affordable health insurance. Business leaders across the state tell me out-of-control health insurance costs are limiting job growth. Would-be entrepreneurs say the fear of losing their existing insurance is the reason they haven’t started their new business.

Business owners say getting through the small print and making smart insurance buying decisions is very difficult. People buy insurance only to find out the reason they bought the policy isn’t covered in the small print. There is no predictability – except that costs will go up – the only question is ‘how high’.

My bill creating the Small Business Health Options Program would give business owners and their agents a virtual marketplace to make apples-to-apples comparison on health plans. Information would be available in an easy-to-understand searchable website; something like Expedia or Orbitz used to buy airline tickets.

But the exchange is more than a website. Behind the scenes,insurers are providing information to the exchange to make accurate and simple comparison of plans possible.

The idea behind the exchange is to make buying health insurance more competitive; and through competition, drive down costs. But to be a true marketplace, consumers must have clear and comparable information on both cost and quality.

For small businesses, farmers and others who buy insurance on their own, a well-run exchange does two things. First, exchanges give small groups big buying power. Instead of being all on their own, individuals and small businesses would be part of the larger group buying insurance through the exchange.  To make the buying group as strong as possible I expanded it to as many employers as allowed by federal law- all employers with 100 employees or less.

Second, the exchange provides information not now available to small businesses and people who buy insurance on their own. That information allows for a clear comparison of plans.

My bill intentionally keeps the information available to consumers simple and complete. The exchange will rate plans based on benefits.Other information on quality will be available for comparison.

Consumers could have confidence in the details because the state would play the role of the referee in the marketplace. Companies would be required to follow rules that allow the apples-to-apples comparison. Hidden costs and companies trying to wiggle out of commitments would be forbidden.

My uniquely Wisconsin approach to controlling rising health insurance costs would build on the work already in place to collect cost and quality information.  Today health providers report much information about quality. But the information rarely makes its way to health consumers. The Small Business Health Options Program would collect this information and make it available as part of the searchable website.

Here is how the exchange would work for two partners running a small business. One has breast cancer. She is recovering but realizes her special needs as she and her partner sit down to find a new health insurance-plan. She and her partner could easily compare the cost and benefits of each health insurance package. They also can compare the quality of the care on her particular health condition.

Critics of health insurance exchanges argue Wisconsin already has a competitive health insurance market place. But the playing field is uneven. The field is tipped in the direction of the health insurance plans,not consumers. The exchange can bring transparency to the product and make comparison-shopping possible. This is not an easy task given the complexities of health care in today’s world.

But it is possible. Wisconsin is one of only 14 states not making significant progress toward creating an exchange. This must change.

The homework is done and business leaders want the change.But the politics of key leaders in the state keep Wisconsin from moving forward.

The most important thing we can do to help encourage start-up business in Wisconsin and grow small businesses is to create a truly competitive marketplace for affordable health insurance.

Voters for Vinehout

P.O. Box 1274
Eau Claire, WI 54702