The future of small businesses depends on affordable healthcare

By Marcie Strouse 

This is a lightly edited excerpt of testimony recently provided to the U.S. Senate’s Health, Education, Labor, and Pensions Committee hearing titled, “Making Health Care Affordable Again: Healing a Broken System.” 

Small businesses are the foundation of the American economy. They make up 99.9% of all businesses in the United States and account for 43.5% of our nation’s gross domestic product (GDP). Small business owners serve their communities every day, whether it is being there when disaster strikes to lend a helping hand or coaching the little league team that bears the name of their business on the back of a tee baller’s jersey. They hire hardworking men and women, and outside of providing them with a paycheck, they hope to pave a path to their overall well-being.

At the core of their promise to their employees is employer-sponsored healthcare. This single benefit is a large tool in the belt of Main Street businesses’ ability to attract and retain their workforce. Most everyone in the United States receives their healthcare from their employer, but sadly, that may not be the case for small business owners much longer.

According to NFIB, the number one problem that small business owners have faced for the last four decades has been providing affordable health insurance to their employees. This is because they have seen their health insurance premiums skyrocket more than 120% since the turn of the century, while the amount of insurance providers that even offer small group plans has been reduced significantly.

To say healthcare affordability for small business owners is a concern would be an understatement. It is a full-blown crisis. This is proven by a study that found that 98% of small business owners fear they will be unable to afford coverage in the next few years.

The underlying problem with our healthcare system is structural. For far too long, government regulations and industry middlemen have dictated coverage options. Today, nine out of every 10 dollars spent on healthcare flows through a third party. This has left employers and their employees with limited ability to shop for and tailor health care plans that meet the needs of them and their families.

It is now time for Congress to step up to the plate and enact real, longstanding reform that restores consumer and employer control. This could be accomplished by enacting CHOICE arrangements, reforming Association Health Plans, codifying Short-Term, Limited Duration Insurance Plans, expanding Health Savings Accounts, and repealing one-size-fits-all Obamacare mandates. This approach will allow the healthcare market to deliver more options at lower prices for our nation’s small business owners.

Some of today’s biggest healthcare cost-drivers come from rigid Obamacare mandates such as essential health benefits (EHBs), the medical loss ratio (MLR), community rating and the removal of the lifetime limits. These regulations failed to consider tools that could help control healthcare costs. Instead, they imposed limitations and reporting burdens on individuals and small employers, fueled industry consolidation, restricted access to coverage, and contributed to skyrocketing costs. This shifted control away from consumers and placed decision-making authority in the hands of regulators, applying a one-size-fits-all approach to problems that require flexibility.

Like many American families, small business owners must carefully budget each year to provide affordable healthcare for their employees. Rising premiums have made this increasingly difficult, leaving them feeling trapped. Innovators are already developing solutions — such as international drug sourcing, biosimilar programs, and negotiated surgery and imaging services — that reduce costs while protecting employees. 

However, rigid government mandates are thwarting innovation that could reduce costs, increase choices and empower consumers. When government restrictions and red tape are minimized, these flexible, effective and pragmatic solutions can benefit not only larger employers but also individuals and small businesses, including groups with fewer than 25 employees, ensuring broader access to high-value, affordable healthcare.

Read the full testimony here.

Marcie Strouse is the Owner and Partner of Capitol Benefits Group.

_{*The opinions expressed in this column are those of the author and do not necessarily reflect the views of HealthPlatform.News.}