Thinking About Health Care: PPACA's Impact on Small Business
Many of Hyde Park's small businesses are doing their budget and tax planning for the year ahead. For some, the issue of health care insurance looms large, either as a current expense or as something they'd like to begin offering their employees.
I'm a physician and longtime advocate of a highly efficient, equitable and affordable system of financing care known as single-payer national health insurance, an improved Medicare for all. Under a single-payer plan, everyone would be covered, there would be no co-pays or deductibles and everyone would have free choice of physician and hospital. The single plan’s bargaining clout would help us rein in rising costs.
Today, under our present arrangements, private insurance firms can (and do) suddenly jack up premiums 20 percent or more, playing havoc with a small company's balance sheet. Other health costs are also rising precipitously.
In contrast, a single-payer plan would be characterized by a modest and predictable expense based on a payroll tax (smaller than what they pay for premiums now) that would help finance truly universal coverage and allow small companies to plan ahead with confidence. Costs would be subject to greater control. Canada has something like this and it generally works well.
But that's not what we got. Instead, Congress passed the Patient Protection and Affordable Care Act, which, while preserving (and actually strengthening) the wasteful, inefficient and profit-hungry private insurance industry, also offers some modest benefits around the edges.
Given this less-than-stellar picture, I nonetheless believe small business owners should take advantage of whatever benefits the new law has to offer. But a word of warning: Sudden premium hikes are still possible and, in my opinion, quite likely under the new law. Costs will continue to rise, and the federal government estimates that 23 million people will remain uninsured in 2019.
So what are some of these benefits?
First, if you have less than 50 workers (or the equivalent in employee hours) there's nothing in the new law that forces you to do anything right away. You aren't penalized if you don't offer coverage to your employees, for example. So don't get too agitated; keep your blood pressure low.
Second, if you have less than 25 employees, you might want to start offering coverage to your workers now. Why? Because you may be eligible for a tax credit ranging from 35 percent (25 percent for nonprofits) of your share of premium costs. That tax credit will increase to 50 percent (35 percent for nonprofits) in 2014, if you buy your company coverage through an exchange and otherwise quality.
Third, if you have been offering insurance to your workers since March 23, 2010, your existing plan can largely be retained, or grandfathered in, until major changes are required in 2014. Some new consumer protections kicked in near the end of September, but again, most big changes don't take effect until 2014.
There are other benefits too. You can research these at the Kaiser Family Foundation (kff.org) and at the Department of Health and Human Services (healthcare.gov). Business journals like Crain's also offer helpful tips.
However, if you want to learn more about a more fundamental, equitable and sustainable solution to our health care woes -- a single-payer Medicare-for-all system -- visit Physicians for a National Health Program (pnhp.org).
Dr. Claudia Fegan is associate chief medical officer for the Ambulatory and Community Health Network for the Cook County Health and Hospital System and a past president of Physicians for a National Health Program. She resides in Hyde Park.