NEW Government Report Identifies Challenges and Solutions for America’s Health Care System

By at 6 December, 2018, 10:25 am

Advocate for Entrepreneurs Praises Recommended Steps, Urges Congress to Help Small Businesses Right Away Thru Health Insurance Tax (HIT) Relief


Washington, D.C.A new report from the U.S. Departments of Health and Human Services, Treasury and Labor offers a hopeful title “Reforming America’s Healthcare System Through Choice and Competition” along with substantive analysis of key reforms that will help make health care more affordable and accessible for entrepreneurs and small businesses. According to SBE Council president & CEO Karen Kerrigan, the report identifies problems plaguing the health care system as a result of layered governmental policies enacted over many years, and offers productive ideas for reform. Kerrigan said the solutions outlined in the report, which require further action by the Administration, Congress and the states, build upon what has already been advanced to help small businesses with high health coverage costs.

“Regulatory actions to date have been very positive, including the establishment of small business health plans and changes to transition health insurance that will give entrepreneurs, small business and their workers more affordable options. In addition, forthcoming changes to health reimbursement accounts will make a significant difference for small businesses. Other solutions and actions promoted by this new report are very important to moving our health care system in a direction that is responsive to consumers’ needs and improving access by lowering costs,” said Kerrigan.

Read SBE Council’s summary of the report here.

According to Kerrigan, as reflected in a post-election Small Business Roundtable survey, health care is a top concern for small business owners and the self-employed. By an overwhelming margin, small business owners selected “health care” in response to the question: “If you could have Congress or the Administration deal with just one issue next year, what would it be?”

“Health care and the costs of coverage continue to gnaw at small business competitiveness. That is why they need immediate action to lower costs to help them grow and compete for workers in 2019.  Thankfully, an immediate solution is at-hand. Congress can advance the 2019 reprieve from the health insurance tax through 2020, which in turn will provide small businesses with significant relief. This simple action is supported on a bipartisan basis, and Congress needs to make it a priority,” said Kerrigan.

Just last week, a bipartisan group of Senators sent a letter to Majority Leader Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY) urging such action.

The letter stated: “Unless Congress acts, insurance carriers will include re-imposition of the tax for 2020 as they begin the process of setting rates early next year. Absent further congressional action, the tax will result in higher health insurance premiums throughout the insurance markets.”

With some uncertainties now emerging about the outlook for the economy in 2019, immediate cost relief for small businesses would be welcome news, according to Kerrigan.

“Small business optimism is high, but in order to maintain that outlook entrepreneurs need to see that Congress remains on their side when it comes to addressing pain points. Health care is a big one, and extending the moratorium on the health insurance tax through 2020 would provide some degree of certainty and relief,” added Kerrigan.

A recent report by Oliver Wyman Actuarial Consulting found that 2020 premiums would likely increase by 2.2 percent due to the return of the health insurance tax (HIT). The increase would remain for subsequent years. For the self-employed and small businesses, that means increases ranging from $154 to $479 depending on the enrollee and product. Projected increases will amount to $196 per person in the individual market, and $154 per person and $479 per family increases in the small group market.

According to the report: “Over the next 10 years, this equates to premium increases ranging from $2,473 per person in the individual market to $5,824 per family in the small group market.”

SBE Council is advocating that Congress address the HIT 2020 reprieve during the lame duck session, or in early 2019. Congress must act quickly in order to have an immediate, positive impact for small businesses.

Read Kerrigan’s letter to President Trump here.

Read Kerrigan’s letter to congressional leaders here.

CONTACT:  Karen Kerrigan,

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: Follow on Twitter: @SBECouncil 

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