Health Care Reform Today and Tomorrow

Small businesses need health care reform that will truly contain skyrocketing costs

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NSBA opposed the Patient Protection and Affordable Care Act [PPACA, P.L. 111-148] and the Health Care and Education Reconciliation Act of 2010 [HCERA, P.L. 111-152] due to its failure to truly address health care costs and insurance premium prices. New legislative activities and agency regulations should prioritize and expedite health care cost-reduction and containment initiatives that reduce rates of medical utilization and trend inflation while improving health care quality and empowering consumers.

Legislative Initiatives: Health Care Cost-Reduction and Containment
Despite PPACA’s passage, reducing health care spending growth remains an urgent and unresolved issue, especially with an expansion of insurance coverage to 32 million people in 2014. NSBA supports greater health care cost-containment initiatives by speeding delivery and payment system reforms, comprehensive reform of medical malpractice laws, and providing economic incentives that encourage prudent consumer behavior.

• Delivery System Reform: NSBA supports an aggressive system-wide public sector implementation and private sector adoption of the Centers for Medicare and Medicaid Services’ (CMS) pilot and demonstration projects that transform the health care delivery system into a value-based, not quantity-based, purchasing model (e.g., bundling, accountable care organizations, medical homes, etc.) that rewards quality (i.e., prevent costly medical errors, hospital readmissions, and geographic variations) and coordination of care (i.e., better management of chronically ill patients and IT adoption).
• Medical Malpractice Reform: Congress must pursue a comprehensive approach to tort reform that embraces health courts, limits medical malpractice awards, and subsequently reduces the phenomenon of defensive medicine that results in higher health care costs and inflated health care premiums.
• Consumer Behavior: PPACA does nothing to encourage cost-conscious consumer behavior, aside from the unnecessarily blunt “Cadillac tax,” which will not begin to have an effect until at least 2018, and which is insufficiently transparent and imposes unintended administrative burdens on small businesses. The lack of consumer responsibility and empowerment causes both prices and utilization to go unchecked. In order to address this pitfall, Congress must reshape employer provided tax incentives to match the essential benefits package, regardless of whether health care is purchased through an employer or individually. Such incentives would be capped at the premium level for the required package, and additional coverage would be purchased using after-tax dollars. This will curtail over-insurance and ease demand for health benefits in lieu of other compensation. Additionally, in order to allow consumers to have “skin in the game,” Congress must repeal the restrictions and limitation placed on health savings accounts and flexible spending accounts. Finally, increased price transparency and greater availability of information will support stronger consumer behavior.

Regulatory Initiatives: Health Insurance Exchanges and Essential Health Benefits
Regulations from the Department of Health and Human Services defining federal parameters for health insurance exchanges and the essential health benefit package will have a significant long-term impact on small businesses ability to provide affordable insurance to their employees. Small businesses are gravely concerned that misguided health insurance exchange regulations or excessive mandated essential benefits will exacerbate past health insurance woes while doing nothing to change underlying health costs drivers. Both regulatory requirements provide an opportunity to put downward pressure on health care costs for small businesses.

• Insurance Exchanges: Health insurance exchanges should make it easier for individuals and small businesses to shop, compare, and enroll in health insurance coverage. NSBA supports insurance exchanges established through states, not the federal government. Additionally, true competition necessitates legislative changes that allow individuals, small businesses, and their employees to utilize federal subsidies and tax credits outside the insurance exchanges.
• Essential Health Benefits: Small businesses and their employees fear that the design and scope of the “essential health benefits package” will be too costly and restrictive. Small business consultation throughout the development of the basic benefits package is necessary to ensure the package reflects the needs of small businesses, their employees, and families. Flexibility in plan design that includes a truly minimal set of essential benefits to comply with the actuarial value requirements will provide small businesses with more options to offer affordable coverage to their employees.
   
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