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Small businesses paying the price for government’s health care failure

🕐 4 min read

In the debate over the U.S. Supreme Court’s ruling on the health care exchanges, the most important point has been lost — the Affordable Care Act has done nothing to reform the continually rising cost of health care for individuals or employers. What it has accomplished is extending coverage to 16.4 million Americans for a 35 percent reduction in the number of uninsured, according to the U.S. Department of Health and Human Services.

Remember that the genesis of the Affordable Care Act (Obamacare) was an overwhelmingly partisan effort by the Democrats to push the bill into law – not a single Republican voted for it.

Although billed as “reform,” the Affordable Care Act doesn’t address the structural flaws of the health care system. Bottom line – the cost of health care is unsustainable.

According to Consumer Reports, since 2000 incomes have barely kept up with inflation and health care insurance expenses, with premiums more than doubling. The average plan cost employers $6,438 per employee in 2000, but that shot up to $16,351 by 2013. The Commonwealth Fund, a private foundation supporting independent research on health and social issues, reports that we have the highest per capita health costs in the world but don’t seem to be getting our money’s worth, as the United States ranked fifth in quality when compared with 10 other developed nations.

What we have is a system consisting of those with insurance subsidies and those paying higher premiums to offset those subsidies. People who get their insurance through employers or on their own often must contend with high-deductible plans to afford their monthly premiums. The result is that they are paying for their actual health care services out-of-pocket, so what they have in effect is catastrophic coverage.

Compounding the problem is that hospital chains are merging and doctors in solo practice are selling to bigger organizations or getting out. This consolidation means less competition and fewer choices, which usually results in higher prices.

I’m afraid that small businesses like ours will be especially hard hit in the years ahead as the failure of Obamacare to lower costs becomes more evident. Our company is experiencing significant premium price hikes – 18 and 35 percent the past two years alone. There’s no reason to believe it will be any less for 2016. Due to their size, big companies can self-insure and take advantage of larger risk pools that can lower premiums. Small businesses, however, have more limited risk pools to contend with and, therefore, can be subject to higher insurance costs.

What we need is a real discussion about what real changes should be made to health care coverage – and not quick legislation railroaded through Congress. True reform is the answer.

I am not a health care or insurance pundit. I don’t have all of the answers. However, as the chief executive of a business employing Texans providing for their families, I am a consumer of insurance plans and have a point of view about the current sorry state of health care.

I don’t want to be in the insurance business, yet I am. Why do we primarily rely on employers for health care insurance? It’s the only form of insurance that does so; we can get life, auto, home, even flood insurance on our own.

What would true health care reform look like? From my point of view, certain changes would help small businesses and the population in general. First, create larger risk pools. Allowing small businesses to be part of larger pools would spread the risk and most likely lower costs.

Second, open health care to interstate competition. I realize that this is a political longshot because of the complex bureaucracies and lobbying efforts in each state to preserve the status quo. However, I point to the open market as a more efficient and cost-effective mechanism for health care than the current over-regulated environment. The needs of a Texas cardiac patient can’t be too much different than one in Oklahoma.

Now that the Supreme Court has ruled on the future of Obamacare, there is little chance that the legislation will be altered through the judicial system. Therefore, it is time for politicians in both parties to do their jobs and accomplish something toward actually reforming health care and its ever-escalating costs.

James Thompson is the CEO and president of The InSource Group, a technology staffing and placement company with an office in Fort Worth. He can be reached at JT@insourcegroup.com.

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