Here's a column from the Central Vermont Chamber of Commerce on the health system changes in the works right now:
Many small businesses that have pooled their purchasing power through chambers of commerce or trade associations to hold down costs face rate hikes of 20 percent or more between 2013 and 2014. And those increases could more than double if the draft health care bill (H.559) is passed as introduced.
Gov. Peter Shumlin and legislative leaders deserve credit for support a change of course in two key elements bill. One helps small businesses that hope to continue offering medical coverage as an employee benefit in 2014. The other helps the state iron out kinks in the exchange before thousands of additional employees are thrust into it.
Both provisions are subject to approval in their respective chambers, but lawmakers should respond positively since the changes will minimize disruption — and frustration — when the exchange is implemented.
The Central Vermont Chamber of Commerce presented testimony supporting the changes before and after the governor announced his new position a week ago.
The vital issue for the smallest employers centers on “bronze” plans.
Bronze health care insurance plans pay a lower percentage of medical expenses than silver, gold or platinum plans. They can be available in the exchange under federal law, but were prohibited in Vermont under the draft legislation. Bronze plans pay less of likely service expenses, but they have significantly lower premiums.
As premiums have sky rocketed, small businesses in association plans have moved rapidly to the premiums they can afford – bronze plans.
A state report on Vermont’s health care exchange illustrated the value of the associations’ buying power when it projected that employers moving from association groups to the exchange would see an average premium increase of more than 18 percent.
The Chamber pointed out that ff they were also prohibited from buying the same bronze coverage, an additional increase of 16 was all but certain. The majority of bronze-plan employers would likely stop offering insurance – unable to absorb premium increases well in excess of 30 percent.
Employees left to purchase their own insurance would be eligible for premium assistance, but, for most, the unsubsidized portion of the premium would be an entirely new household expense.
According to the state report, businesses with 50 to 100 employees are likely to see limited movement in premium suggesting that their claims are similar to those of the new pool in the exchange. Having these firms enter at a later date allows the state to adjust to he new system before adding thousands of new purchasers.
The transition will be daunting and highly disruptive regardless of how well planned.
The state taking steps to reduce the degree and intensity of the looming chaos is important to the small business community.
George Malek is executive vice president of the Central Vermont Chamber of Commerce.
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