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Without repeal, expect a “HIT” from health care bill

The health care bill (the Patient Protection and Affordable Care Act) was basically crafted behind White House closed doors. Then, House Speaker Nancy Pelosi pushed it with her now famous statement that, “it’s good and we need to pass it so we can find out what’s in it!”  On the Senate side, Harry Reid proclaimed it would reduce health care costs, although he hadn’t read it, either. They were right and wrong – right that it passed so we could find out what’s in it, and dead wrong about lower costs.

So far, the promised declines in costs haven’t materialized. Moreover, no one in his right mind is betting they will, especially if you have a small business like a dealership, service firm, marina or small manufacturer. That’s because when they looked inside the health care bill the uncovered the HIT (health insurance tax).

In essence, the health care law will impose an estimated $87 billion HIT on health insurers beginning in 2014. The purpose of the HIT is simply to offset other costs in the law. It doesn’t take a master’s degree to predict the HIT will be reflected in higher premiums for health insurance and will, therefore, be borne by small businesses and/or their employees. Oh, did I mention large companies and unions won’t feel the HIT because they’re exempt?

The National Federation of Independent Businesses estimates the HIT will impact some 2 million small businesses, 27 million employees covered by their employer, 12 million more employees or self-employed individuals who purchase individual insurance, and up to 30 million currently uninsured who will soon have to purchase a plan through an exchange that includes the HIT. 

The good news is there’s a bill in Congress, H.B. 1370, that would repeal the HIT. Introduced by Republican Rep. Charles Boustany of Louisiana, it is now a bipartisan bill with the recent addition of Democrat Rep. Heath Shuler from North Carolina as a co-sponsor. The bill is currently in the House Energy and Commerce Committee as well as House Ways and Means.

Realistically, while the whole health care law is being challenged in the courts and is expected to eventually reach the Supreme Court, reasonable arguments on both sides make it impossible to predict the Supreme Court’s decision. Accordingly, as small businesses, we need to be ahead of the game and engaged in supporting any efforts to reduce the negative impact of the health care law looming ahead.

A letter, call or simple email to your Congress person, asking him or her to become a co-sponsorship of H.B. 1370, would be a proactive move for now.

Comments

15 comments on “Without repeal, expect a “HIT” from health care bill

  1. Steve

    Let me see if I get this right, but first my experience. My health insurance went up 2000% since 1993 till 2008 – before the health care bill passed. From$50 to $1000/month, roughly. (and I never used it once in those 15 years, and sitll haven’t. I am very healthy.)I’ve increased my deductible from $1000 to $6000 to keep my costs down in 2009 so I could afford it at $400. And it has gone up $35 since 2009. And people like you say it went up because of the new health care bill? Don’t you use logic in your analysis? It goes up for twenty years, they pass they bill and it continues to go up and you blame the bill? Come on. Use your head. Plus, the U.S. spends 17% (and it’s going up and has been for decades) of their gross per capita expenses on health care and we are unhealthier than all other developed nations who all have universal health care and they spend at the most 12% (Switzerland, by the way). Quit thinking about the short term costs and how they will affect your short term profit and think of how the long term health of our society will improver everyone’s physical AND financial health. Quit thinking so narrowly and small. With the new health care law, we go from the developed world’s worst health care insurance system to the improved worst health care insurance system. And as long as private insurers, who are getting extremely wealthy right now while the society suffers financially, are in charge, it will get worse.

  2. mike

    This is the miss-informed miss-informing.
    The guaranteed acceptance health insurance now available under the health care bill has dropped our insurance cost for our 30 employees by more than half. We took some of that savings and used it to by an Aflac wrap around policy. The net result is better cheaper insurance.
    If you do a little homework there is great benefit to this health care bill.
    The legal cost of opposing the bill will in the end be where the money for health care ends up if we continue to pursue Norm’s fantasy.

  3. dave

    sorry to disagree, but nothing in this new law has worked so far…why do we think it will get better or cheaper? In VA, the “high risk pools” were to expensive for the state, so those of us with “pre-existing conditions” can only participate at the Fed level, which requires you to be WITHOUT any healthcare for at least 6 months to qualify…by then you are bankrupt…but can get high risk for $1200-1500 a month..if you have it.

    Secondly, several hundred corporations have already asked for and received waivers to NOT participate…what gives…

    then Norm gives us some fairly realistic figures, at least verifiable and still

    you guys support higher costs, more bureacracy(sp), etc, etc.

    And if you think health care is actually better in Canada and England, then why do so many come here for treatment? My mom worked in a large MD hospital for over 30 years and has first hand experience with why health care is so expensive here….EVERYONE uses the ER as a runny nose doctor and then walk out on paying.

    The system is repairable, with out this Affordable Care fiasco.

  4. AnonymousBob

    Dave:

    The fact you live in Virginia explains a lot about your understanding of the bill. Your Governor and Attorney General were some of the first politicians in the country to come out against the bill without any substantial understanding of the bill. They wasted your tax money suing the Feds and didn’t give the bill any time to be implemented so you could realize the benefits Mike and Steve highlighted. You can’t go based on what Norm wrote because he has shown a dislike of the current administration and repeats some of the talking points you did. The National Federation of Independent Business is a right-leaning trade association (look it up), so, of course, their report is going to be biased that way – which is why Norm quoted it.

    I don’t know that health care in Canada or England is better than ours, but it’s been proven time and again that their systems are much better than ours. You provide no proof that “so many come here for treatment” because you can’t. It’s another talking point without merit. And “my Mom worked in a hospital” isn’t proof, either.

    Do your own research, read the health care act, read the House proposal, and then make up your mind based on facts. Whatever you choose to believe is your choice; at least make the effort to understand what you’re believing.

  5. Kurt Hoehne

    The health care bill was a mistake, but only because it was a completely compromised, insurance dictated gesture at reforming a broken system. The bill has delayed the needed change. It’s the proverbial bandaid on a gaping wound that will help some and hurt others and not solve the problem.

    Our care is expensive beyond compare, and the money is not going to the right people. Market economics can’t and shouldn’t be expected to do everything. Adam Smith would be the first to say so, btw.

    And as far as that tired old refrain goes, “Why does everybody come to the US for care?” there are some important things to note. First, for serious but routine surgeries and other procedures, medical tourism FROM the U.S. TO other countries is now becoming prevalent. Secondly, and just as importantly, the care that foreigners DO come to the U.S. for is largely for treating rare diseases or utilizing cutting edge technology which was funded by the public through higher education or by the medical industry in an effort to make money. None of that is evidence of an effective health care system.

    The health care fiasco is like a hull covered by barnacles. Ultimately, they’ll destroy the boat. In the meantime they just make it slower and slower. And the longer you let it go, the harder it is to fix. My sons will look back at this time and shake their heads and ask me questions I won’t have good answers for.

  6. Jim M

    Great post Steve. The people writing things like this generally don’t have a clue or they conveniently leave things out to match their agenda. Things like how small businessses can get a tax cut (yes, almighty tax cut) to help pay for employees premiums, or how a lot of the plan hasn’t kicked in yet, and like you said, how insurance has been going up dispoortionatly for decades and on and on. Plus, not everybody in the Marine Business is automatically a Republican.

  7. Fred Blanton

    Bill, It is time to get off the tea party band wagon and look for the positives. Healh care cost, driven by obscene profits for insurance companies and select specialists who are the money grubbers of the profession, have driven the needy out of heath care entirely. Poor people use the emergency room as their regular doctor because that is all that is availabe to them. Let get on with the implemtentation of the law and fix the parts that dont work well. Turn off Rush and Hanity.

  8. C. Moore

    Other than Dave & Kurt, I don’t believe any of these posters are working in this industry, let alone own a business in it. Everytime Norm or anyone brings concerns of, or about this admin’s programs or policy’s these slammers pop up with the same stereo typical attack responses like those above. “Because your mom worked in a hospital isn’t valid”, “Because you live in Virginia”, “get off the tea wagon”, etc. Who died & gave these libs the authority to define what is valid & what isn’t??
    It is they who plug their ears & yell I’m not listening, like children unable to face the facts let alone reality.
    If you like the way the other “Developed” Nations work & hate ours so much then go there, Please, go…

  9. AnonymousBob

    C. Moore:

    Did you even read Kurt’s post?? Because he stated the health care bill was flawed because it didn’t do enough and continued the money grab by the greedy insurance industry. If you’d read that, you’d realize Kurt’s post actually contradicts Norm’s post and Dave’s rambling. The posts by everyone but you and Dave are very cogent, well thought out, and present personal anecdotes or facts that respectfully contradict Norm’s biased post. And then you show up with your personal attacks and typical pablum – all while presenting no facts whatsoever.
    Your hypocrisy is laughable. Example: “Who died & gave these libs the authority to define what is valid & what isn’t”? Well, isn’t that the pot calling the kettle black??!! You’re doing the exact thing you claim the “libs” are doing, so maybe you shouldn’t throw such stones in your glass house.
    As to who works in the Marine industry, does it really matter? Why? If you really need to know, I do work in the industry and know quite a few others in the industry that own dealerships, run boat manufacturing plants, and are heavily involved in the industry and they don’t (thank goodness) think like you. I’ll hang out with them here in the USA, thank you very much.

  10. C. Moore

    Abob
    The answers are:
    No its not the pot calling kettle black.
    I Do not live in a glass house. Even though throwing stones is very green I know you must assume I am gun crazy- lead goes farther than rocks & are more acurate LOL.
    Yes it does matter as this is a MarineDealer/ Industry Blog.
    As to what do you do in this indusrty? Yea theres a question you will never answers as you are anonymous.
    Congrats on knowing a few (not a lot) like thinkers. Bottom painters & lot boys are hard to find.

  11. Jim

    I don’t know of any Canadians who come here for health care but busses are lined up to cross the Canadian border to get reasonably (less than 25% the cost) medicines. Canadians are afraid to come here because of lousy to not at all health system here. Americans by a wide majority want to have universal health care. The rest of the industrialized world has better health outcomes at roughly half the price. In all or those countries, for profit health insurance in illegal, as it should be. The priority should be health, not profit.

  12. CaptainA

    I think Steve articulated the facts quite accurately. The new health care law so far has not increased the cost of health care in this country at a rate faster than the history has shown it to increase.

  13. Fred DeFinis

    As a small businessman in Massachusetts, I have followed this issue very closely from the small business perspective. We in MA have had “reform” aka Romneycare for several years now and the cost falls disproportionately on small businesses.

    The key issue is not in the legislation itself but in its enabling format that puts unelected bureaucrats in charge of making decisions on the health care system and process. Each year, they (The Connector Authority) add mandated coverages that the consumer neither wants nor needs but must pay for anyway. Our costs are the highest in the nation and our rate of increase is also the highest in the nation. To be fair, we probably have the best health care in the nation and the best always costs more but we are out of control.

    There is no provision for cost containment in the legislation and no desire for cost containment among the bureaucrats who administer the system. As overall health care costs go up, they must be divided among the users via rising insurance premiums. HERE IS HOW THIS DIVISION WORKS:

    The State is the largest purhcaser of health care so they have volume buying clout. They also administer the program so they have implied threat to the insurers. The insurers must come to the table or end up on the menu. The result is that the annual increase in costs for the state-sponsored programs (called Connector Plans) is under five percent.

    Next come the state’s large employers–they also have volume puchasing clout and their premium increases typically run seven to ten percent per year. This is not great but not insurmountable

    Last, we have the small business (Why are we always last?). All the increased costs did not go away and they did not get picked up by the state or large employers. Guess who gets to pay? YOU! Premium increases for small businesses in MA are nearly always double digit and increases of over thirty percent per year are not uncommon. I have personally had two years with increases over twenty five percent per year and know people who have fared much worse. There are plenty of family plans that top $25k per year and those are not the best plans.

    You can haunt discussion boards like this which are full of opinion or read some solid information at NFIB, especially the MA division. Bill Vernon of MA NFIB has written extensively on this situation over the years. Anyone who studies the MA experience will have a few sleepless nights.

  14. C. Moore

    Jim,
    You need to come to the west coat of Florida in the winter & check out the various doctors & clinics in the area- cars & RV’s with Ontario plates are everywhere.
    I don’t know about the so called drug busses going to Canada, but I understand there are a large number of party busses in western New York & Detroit that are destined nightly for the “bare all do all” female nude establisments that abound in WINDSOR & TORONTO….

  15. C. Hudson

    Regardless of whose health care is better or the cost in each countries system, the most relevant point to me is whose decision this should be. I’ll argue that this is my decision, not any governments (federal, state or local) to make as to what if any insurance I need. You only need car insurance if you want to drive a car. No one is going to tell me that I need health insurance to breath, eat, etc… . This is a huge overreach by the federal government, not supported by the constitution. Reforms are needed for the businesses that choose to be in the health care industry, not mandates or fines for millions without the money to provide for food and shelter, much less health insurance. I’ve lived it and I know!

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