Health reform needs voiced by businesses

One in four Americans is without comprehensive health care. Health insurance costs, in particular premiums, have been increasing at a rate that is leaving small businesses and individuals with either limited or no access to affordable insurance through their employer. According to a 2008 report issued by the Center for Medicaid Services, health care spending is growing three times faster than wages.

President Barack Obama has pushed for health insurance reform and has asked Congress to draft legislation. In a speech presented to a joint session of Congress on September 9, Obama said, "Of the five committees asked to develop bills, four have completed their work, and the Senate Finance Committee announced today that it will move forward next week." Maine Senator Olympia Snowe is a member of the Senate Finance Committee "Gang of Six" working on a health reform plan. The four members of Maine's congressional delegation have stated that they support some type of reform, but what that national reform will look like is up for debate over the next few weeks and appears to hinge on a few issues, including a public health care option, a public health option that could be "triggered" after a few years, and cost and funding. In the president's speech, three basic goals to reform were outlined: continue to provide "security and stability" to those already insured; provide insurance to those not covered; slow the growth of health care costs.

John Gentzel, director of communications for Senator Snowe, says, "The American people C and certainly Mainers C are nervous about the reform process. Senator Snowe has received more than 18,000 calls and e-mails voicing varying points of view on this subject in the last three months alone. Comments from Mainers have ranged from support for affordable, quality, health insurance for all, to concerns regarding the cost of an overhaul, to advocates for a full public option plan." He notes that this is on par with the rest of the nation; however, he did not give specific percentages of the breakdown in categories of support.

"Frankly, our nation's health insurance markets are in need of serious reform," says Senator Snowe. "Last March, the Government Accountability Office (GAO) released a report that I requested... The GAO's report highlights an alarming trend of consolidation in the state small group insurance markets. The combined market share of the five largest carriers represented 75% or more in 34 of 39 states surveyed, compared to 26 states in 2005, and 90% or more in 23 of these states, including Maine (96%). The sad truth remains that small group insurance markets continue to lack real competition among insurers. No competition means higher costs, and higher costs translate to no health insurance."

Denying pre-existing conditions

The House Committee on Ways and Means has outlined six areas of concern that its bill version targets. They are coverage and choice, affordability, shared responsibility, controlling costs, prevention and wellness, and workforce investments. Maine is one of a few states that require health insurance providers to cover pre-existing conditions. A total of 45 states in the country allow insurance companies to deny coverage to those with such conditions. This could include cancer reoccurrence to asthma and diabetes.

Steven Griffin, associate state director of advocacy for AARP Maine, says, "Guaranteeing affordable coverage means [denying] pre-existing conditions has to go. Most folks in Washington seem to agree on this." Griffin notes that AARP's 236,000 Maine membership is comprised of people age 50 and over. "People aged 50 and over are not retired," he says. AARP, while not endorsing a position because "there's no plan yet," has created a six-point list of concerns formulated around affordable healthcare. "Many pay high premiums to cover catastrophic conditions, which mean they're not getting any preventative care." Of the membership, Griffin says, "Our members do not just care about themselves."

Requiring that all insurance providers cover pre-existing conditions would place Maine on a level playing field for a competitive insurance market. Many of the current health insurance reform proposals consider the non-coverage of pre-existing conditions discriminatory, and they would protect individuals by requiring coverage of pre-existing conditions and by limiting an insurer's ability to charge higher rates that are based on health status, gender and a number of other factors. Some of the reform proposals in House and Senate bills favor the coverage of pre-existing conditions. President Obama also has stressed the importance of changing this practice.

Small businesses struggle with costs

Susan Corbett, founder and CEO of Axiom Technologies and Morning Glory Enterprises, both in Washington County, is a small business owner with 25 employees. She has increasingly felt that the lack of insurance options in Maine is causing duress to both her businesses and her employees. Right now, she says, she has four insurance companies to choose from. "Every year I do a search, but they are all pretty much the same. This is very frustrating that the competition isn't let in." She feels strongly about offering health insurance to her employees because "it's the right thing to do," but also because the benefits attract quality employees.

Corbett is not alone. While she is still able to offer insurance to her employees, the Kaiser Family Foundation found that, of the approximately 46 million who are uninsured in this country, 26 million of that number are small business owners, employees and their dependents. The U.S. Small Business Administration has found that 79% of all new jobs created are by small businesses. Washington County, known for its "micro-business" models, will recognize similarities close to home. Of those new jobs created, 80% are within the smallest businesses, or those with less than 20 employees.

The Maine State Chamber of Commerce conducted a survey of its members and found that health care was a primary concern. Increasing the deductible as a way to keep costs level was used by 69% of survey respondents, and 81.8% have had premiums increase over the last 12 months. A deductible of between $1,000 and $2,500 was the most often used, at a rate of 23%. Senator Snowe remarks on the issue, "The national Small Business Association recently reported that, without enactment of broader health reform, 10% of small businesses will drop their coverage next year C that's alarming."

Corbett has worked in the health care industry since 1972. In 1998 she moved Morning Glory Enterprises to Maine and in 2000 hired her first employee. It cost her $150 per month to insure her employee. Nine years later it costs $450 per month. "That's a lot of money," she says and explains that at a certain point she is not able to transfer her rising costs to her customers. "I can only charge my clients so much before they take their business elsewhere." She notes that an employer who does not provide health insurance will have a cheaper cost than her business and those savings they enjoy by not insuring their employees are then passed on to the customer.

How the U.S. measures up

The Robert Wood Johnson Foundation's Urban Institute created a 2009 report entitled, "How Does the Quality of U.S. Health Care Compare Internationally," analyzing the quality of U.S. health care with its international peers. The legitimacy of America's supremacy in health care was looked at using "amenable mortality," a measurement that is used "to cast light on the relative effectiveness of health care systems by calculating the rate of deaths prior to a certain age which are considered by experts to be avoidable through appropriate health care." The U.S. ranked last out of 19 countries when it came to deaths due to conditions that were preventable if treated early.

The study found, however, that the U.S. excels at the health care of those 65 and older, with survival rates much higher than peer countries in cancer care, suggesting that Medicare provides a better system of care of the country's elderly than many other countries' universal health care systems. The rising cost of insurance premiums and the expectation that without healthcare reform an increasing number of the country's population will be uninsured could result in a population that either dies earlier or that reaches Medicare in an increasingly unwell state, thus putting an additional strain on the system.

In a separate study, the Urban Institute used a policy simulation model to project costs and outcomes if federal reform efforts fail. A best case scenario saw individual health care costs rise 46% by 2019, with worst case projecting 68%. Business owners such as Susan Corbett could see premium costs double or in a best case scenario rise by 72%. The report echoes Corbett's concern about "far fewer Americans being offered or accepting employer-sponsored health insurance," because of high costs. Enrollment in Medicaid and the Children's Health Insurance Program could increase by 20% in 10 years, and the number of uninsured Americans could rise to almost 66 million.

Griffin notes that one of AARP's areas of concern, if addressed, could save $71 billion over a 10-year period. Currently, he explains, chemical drugs have a legal pathway to becoming generic, but biological drugs do not. Biological drugs include insulin as well as "cutting-edge drugs to treat cancer and rheumatoid arthritis." Senator Collins has sponsored a bill that would create a pathway timeline for biological generics. According to Griffin, there are a number of other ways that current health care costs could be lowered. He notes that 91 cents of every Maine Medicare dollar is spent on institutional and nursing home care, while the remaining nine cents is spent on home-based care. "How can we tweak that percentage rate?" he asks. "It would be better for the individual, we know that they do better in their own home, and it would be better for the economy," he says, pointing to Maine's aging population.

The cost of inaction

“There are a few areas that have been turned into critical components like the public option. Some people have staked out positions a little early," Griffin says. "We've lost sight of the fact that there is almost no one out there who thinks the current health care system works."

He adds, "Action is the most important thing," and he notes that while there is legitimate concern about the cost of reform, the long-term cost of not reforming could be devastating.

Congressman Mike Michaud has a comprehensive website resource of health care reform documents and links available at <www.michaud.house.gov> under the healthcare tab. The websites of Senators Snowe and Collins are <www.snowe.senate.gov/public> and <www.collins.senate.gov/public>. For more information on the Robert Wood Johnson Foundation's health care and insurance studies, access <www.rwjf.org/healthreform/>. Additional information on AARP can be found at <www.aarp.org/states/me/>, including the multi-organizational platform <www.aarp.org/issues/dividedwefail/> and <www.healthactionnow.org/>