The Insurance Problem

Yeah. We do have a problem in this country with health insurance. Not quite the one my statist friends imagine, but one nonetheless. Mostly, between the litigiousness of our culture and the activism of various special interests groups, it's hard to get basic care; the state tends to mandate that every possible health-care scenario be covered under any plan. Meanwhile, the insurance companies are subsidized, and few people feel like they are paying "real money" for their care.

So costs rise, and a lot of the self-employed are priced out of the market. My husband and I wouldn't have insurance at all if we couldn't get it through his corporation, but that means we have to keep the corporation open, though it's no longer cost-effective to have it in other arenas.

Therefore, I'm intrigued by the latest from Olympia Snowe's office about a new act that might (might) make insurance more affordable and portable, and put it within reach of some self-employed types who don't have catatrophic coverage right now:

SHOP Act One-Pager

Small businesses find it difficult to afford health insurance for their employees:

• SHOP will allow small businesses to band together in a statewide or nationwide pool to obtain lower health insurance prices by spreading their risk over a larger number of participants.

• SHOP will keep prices low by offering a range of private health plans that have to compete for business.

• SHOP will provide small business owners with a tax credit of up to $1,000 per employee ($2,000 for family coverage) if they pay for 60% of their employees’ premiums.

• SHOP will provide small business owners with a bonus if they pay for more than 60% of the premiums.

Small business owners pay higher prices when they have older workers and face large premium hikes when even one employee experiences a serious illness:

• SHOP would make insurance rating based on health status and claims experience illegal so that premium increases will be more stable and predictable.

• SHOP ensures that the variation in premium rates will be reduced so that small businesses will be better able to afford coverage without facing as much of a competitive disadvantage if they have older workers.

Selecting a health insurance plan is confusing and choices are often limited:

• SHOP will provide a web site with comparative information about a variety of private health plans.

• SHOP will allow new health plans to be offered nationwide but will continue to rely on state insurance commissioners to ensure that all health plans meet state requirements for financial solvency, network adequacy, and claims and appeal procedures.

SHOP helps the self-employed:

• Self-employed individuals face extremely high costs when trying to purchase health insurance in the individual insurance market:

• SHOP will allow the self-employed to purchase insurance in the same pool as small businesses.

• SHOP will provide self-employed individuals with a $1,800 tax credit ($3,600 for family coverage) to purchase health insurance.

Anyone have any thoughts on this? Here's a snippet from the press release:

A bipartisan group of senators, with the support of small-business and labor union lobbyists, on Wednesday unveiled legislation they said would go a long way toward expanding healthcare coverage for the largest segment of the uninsured.

Senate Majority Whip Dick Durbin (D-Ill.) said that he has been working since last January with the National Federation of Independent Business (NFIB) and the National Association of Realtors (NAR) to develop the legislation. He hopes it will break a deadlock that has stalled past efforts to facilitate access to health benefits for small-business owners, their employees and the self-employed.

Durbin has found support from Republicans, most notably Maine Sen. Olympia Snowe, the ranking member on the Senate Small Business and Entrepreneurship Committee who is also the bill’s lead co-sponsor. And in addition to the business groups, the Service Employees International Union (SEIU) has endorsed the bill.

According to the nonpartisan Kaiser Family Foundation ’s 2007 employer health benefits survey, 59 percent of companies with fewer than 200 employers offer health insurance to their workers, compared to 99 percent of larger firms.

“Contrary to popular belief, most people who don’t have health insurance are not out of work,” said Durbin.

“We have to find a reasonable way to help small businesses that want to provide good health insurance to their owners and their workers, and also the self-employed, who’ve been left behind too many times,” he said.

Standing with Durbin Wednesday was NFIB President and CEO Todd Stottlemyer, who represents an organization that traditionally leans toward Republican ideas.

“This is the largest portion of the uninsured population in the United States,” Stottlemyer said. The Durbin-Snowe bill could “break the decades-long logjam that has blocked small-business [healthcare] reform legislation,” he said.

Snowe, who has sponsored small-business health-insurance legislation in past Congresses, echoed the bill’s importance. “Indisputably, rising costs of health insurance has been the No. 1 issue of concern for small businesses, and rightly so,” she said.

Sen. Blanche Lincoln (D-Ark.) joined Durbin and Snowe at the announcement. Sens. Norm Coleman (R-Minn.) and Amy Klobuchar (D-Minn.) also are original co-sponsors, Durbin said. All but Klobuchar sit on the Finance Committee. Executives from the NFIB, the NAR and the SEIU also spoke at the event.

Although only about 75,000 of the SEIU’s 1.9 million members are self-employed or work for small businesses, reducing the number of uninsured “can’t just be about our members,” said Mary Kay Henry, the union’s executive vice president.

The legislation would combine annual tax credits up to $2,000 per worker for small-business owners and $3,600 for the self-employed with state- and federally based insurance pools designed to spread risk for insurers and reduce premiums for workers. The measure also limits insurers’ ability to use patients’ medical histories to exclude them or drastically hike their premiums. The bill would leave most of the regulation of the insurance plans to state authorities.

The senators highlighted the diversity of interests backing the bill: The NFIB has traditionally aligned with Republicans and the SEIU with Democrats.

Underscoring this point, Durbin joked about his first meeting with Stottlemyer about the bill, which took place shortly after Democrats assumed control of Congress. “It was a rare visit by the NFIB in my office. I think it was the first … in my congressional career,” Durbin said.

In essence, the situation right now is that a lot of people are being forced to buy the "extended warranty" on the human body, or do without any sort of help at all if they get into a jam. And we all know who benefits from extended warranties . . . don't we?