It’s hardly news anymore when Wisconsin small businesses see their health insurance premiums spike. But with the health care law under fire in the U.S. Supreme Court, it’s worth noting that excessive rate hikes are exactly what the Affordable Care Act aims to remedy.
If the legislation is struck down, small business owners’ coverage costs will continue spiraling out of control.
Last month, the Department of Health and Human Services identified Wisconsin as one of nine states where, under Affordable Care Act guidelines, insurers had recently proposed excessive premium rate increases that should be blocked by the state. This provision of the law is just one of many that can help small businesses suffering from unfair rate increases.
The scenario is nothing new — small employers have dealt with astronomical rate hikes for years. Lani Madis, owner of Greater Midwest Mercantile in Eau Claire, Wis., is one of them.
Greater Midwest Mercantile has been in business for an impressive 30 years, but the anniversary seems bittersweet. In 2009, after 27 years of offering health insurance, Lani realized she could no longer afford it for the shop’s full-time employees — her son and daughter.
“Having provided employees with health coverage since opening, it was difficult to swallow costs when I saw premium rates increase by 18 percent in 2006, 26 percent the year after and a staggering 40 percent in 2008. My son’s deductible increased from $250 to $2,500 — with a $537 premium,” Lani said. “And those increases were due in part to an uncontrollable circumstance: my daughter has a pre-existing condition. That’s why I look forward to 2014. With full implementation of health care reform, insurers will no longer be able to deny coverage or jack up rates just because a group member has a health condition.”
The ban on pre-existing condition exclusions is just one of many reform provisions small business owners look forward to —and there already are other provisions hard at work. For example, the small business tax credits in the law are a first step toward helping small employers afford better coverage. But for them to reap the full benefits, the law needs to be implemented in its entirety.
The state’s health insurance exchange — an online marketplace where small groups can pool their buying power to drive down costs — can lower premiums while increasing choice if implemented correctly.
One-third of small employers who already offer insurance said the option of an exchange makes them more likely to continue providing coverage, according to national opinion polling released by Small Business Majority. Of employers who don’t currently offer insurance, one-third said having an exchange available would make them more likely to start.
The law leaves it up to state legislators to determine much of what an exchange looks like. If Wisconsin wants to support its chief job creators — which it should, since the state lost more jobs than any other in 2011, according to the Bureau of Labor Statistics — it must pass legislation to create an exchange and begin tailoring it to the needs of its small businesses.
In 2014, with full implementation of the Affordable Care Act, the Badger State’s health care market should change for the better. But there’s still work to do, and we’ll only be backtracking if the federal law is overturned.
Adding insult to injury, the myriad cost containment measures already starting to rein in premiums might be off the table if the law were struck down.
While there’s no sweeping solution to small businesses’ health insurance woes, the Affordable Care Act is a good start, and we need to work with what we have. That’s why we’re traveling all over Wisconsin this month holding events to educate small businesses about the law and how they can take advantage of provisions aimed at helping them.
But ultimately it’s up to the high court to decide the law’s fate, and for the sake of small businesses, we hope they make the right decision.
John Arensmeyer is the founder and CEO of Small Business Majority.