In a recent New York Times/CBS survey, access to affordable health care was identified as the primary issue on the public’s domestic agenda. According to the Times, a majority of respondents favor a federal guarantee of health insurance for every American, and they voiced a willingness to pay as much as $500 in additional taxes a year and forgo future tax cuts to accomplish this. The Times added that “Americans remain divided, largely along party lines, over whether the government should require everyone to participate in a national health care plan, and over whether the government would do a better job than the private insurance industry in providing coverage.”
Clearly, something needs to be done to streamline or overhaul health insurance coverage nationwide. The most current federal data notes that 44.8 million Americans are without health insurance. This is nothing short of a crisis, says Andy Stern, international president of Service Employees International Union (SEIU). SEIU is partnering with AARP and the Business Roundtable in a campaign called “Divided We Fail,” which is pushing for fundamental change in the health care system using the influence of their combined 50 million members.
While the “Divided We Fail” partnership seeks bipartisan solutions to the health care debate, others see solutions emerging outside the political arena. In late March, Richard Berner, chief U.S. economist for Morgan Stanley, wrote in The Wall Street Journal that he believes the solution is to “get health-care financing out of the workplace and require coverage, more personal responsibility and market incentives.” Berner believes that a consumer-driven health care model with universal mandated basic coverage would provide “a safety net for the disadvantaged.”
We recently surveyed some of our Best Bosses to get their perspectives on this complicated issue. Of the 16 leaders we surveyed – encompassing a wide range of industries, with IT and telecommunications being most prevalent – 63 percent feel that employees are most responsible for ensuring that they receive adequate medical coverage. Thirty-eight percent feel this responsibility falls on the shoulders of the federal government, and 25 percent say it is up to insurance providers.
The bosses’ comments related to this issue appear split between wanting the government and insurance providers to take responsibility and provide real solutions. The president and CEO of a hosted VoIP phone system provider on the East Coast says he would “make transparent the crappy service of insurance providers.” Meanwhile, the president of a New England-based custom publishing and creative services company says that “If the insurance and health care providers cannot solve the problem, then I do think it is the responsibility of government to do so on behalf of employers and employees alike.”
Despite the fact that rising health care costs have hit small businesses especially hard, these leaders are doing what they can to offset costs and keep their health care benefits attractive enough to retain employees. Sixty-three percent of the bosses provide a PPO benefit for their employees, 21 percent provide an HMO benefit and 8 percent allow employees to choose between the two benefits.
To minimize health insurance rate increases, 63 percent of the leaders we surveyed have increased employee co-pays in the last two years. Twenty-four percent have created health savings accounts (HSAs) for this purpose. One leader who put HSAs in place at his Midwest-based staffing agency also increased deductibles. This has helped manage costs while mitigating out-of-pocket expenses for his 12 full-time and 300 part-time employees.
One link in the chain of providing health care coverage that bridges federal government- and insurer-provided solutions is state-mandated health insurance benefits. According to recent data by the Council for Affordable Health Insurance, the number of state-mandated benefits grew by 3 percent in the last year. There are now over 1,900 such benefits nationwide. While Initiatives in Illinois, Massachusetts and California have been most visible, these benefits are quietly influencing how insurance companies cover specific health care providers and patient populations in every state.
Yet, without universal oversight and communication, many business leaders are left wondering how their employees are affected by their state’s mandates. Sixty percent of the Best Bosses said they were unsure as to the impact of state-mandated benefits on their business. One leader, the co-owner of a computer and peripheral sales firm in Vermont, says that “with greater enrollments better economies of scale would help with efficiencies overall.” However, he admits that state-sponsored health care is “not the ideal solution … since the burden of paying for this would in essence be a regressive tax on businesses.” The leader of the staffing firm previously mentioned, on the other hand, says he has “zero confidence” in his state’s ability to manage health insurance, since they have bankrupted their own unemployment insurance program.
One thing is clear: If state governments are unable to step up their efforts on the health care front, and if the federal government does not put forth universal direction, then the onus for providing adequate coverage for employees falls fist on employers, then on workers themselves. And considering that small organizations account for 99.7 percent of all employer firms (according to the latest Small Business Administration estimates), even if they remain partially responsible, it is an unduly large burden to carry.
“Health insurance is a basic right of every citizen and should not be affected by their current employment status,” the business manager of a professional services firm on the East Coast tells us.