Small businesses recast reform role in hopes of health care cost relief

The small business lobby is retooling its image as it considers how health care reform will affect its standing, CQ Politics reports. For the National Federation of Independent Business the "health care overhaul, more than any other political issue, is how the trade association made its name. In the spring of 1993, the NFIB came out strongly against an employer mandate in the health care bill." Others worked with the Clinton administration, but the NFIB tried to kill it.

"This year, though, the NFIB has taken the opposite approach on the issue. While the trade group came out aggressively against the Senate health care bill earlier this month, the association had been quiet up until that point, trying to negotiate on several portions of the bill to make it more favorable for small-business owners." The move has frustrated Republicans and Democrats alike, who don't understand their willingness to negotiate and their hesitancy to support a bill, respectively (Palmer, 12/5).

Business Week reports that small business is trying to secure cost relief from insurers. "In 2008, five large insurers—WellPoint, UnitedHealth, Aetna, Humana, and Coventry Health Care — spent just 80 percent of the premiums they collected from small companies on actual health care. (The rest goes to items such as marketing, administration, and profits.)" The bill in the House would require insurance companies to spend 85 percent of premiums it takes in on care while the Senate version would require 80 percent for large and small companies and 75 percent on individual policies. "Some policy analysts worry that regulating (medical-loss ratios) might lead to some unintended consequences. To keep their MLRs at 85 percent, insurers might, for example, be inclined to reduce investments in areas such as information technology. They can also raise their MLRs just by paying doctors more" (Kendall, 12/4).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.