I just attended a great seminar by Jesse Patton about what is happening in October on Capitol Hill. For insurance specialists such as myself, it is increasingly frustrating to hear what is proposed for a mandate.  Employers especially should be looking at what is going on as most of these upcoming bills affect every small business.  Sorry, no exceptions!

With so many polarizing comments being made by both sides, here are a few things I took away from the presentation.

1. I thought the purpose of Health Care Reform or Health Insurance Reform was to decrease the amount spent on health care. Consider that in 1965, government officials made unsound assurances by their lead actuary that Medicare Part A would grow to only $9 billion by 1990.  In 1990 Medicare Part A grew to $66 billion and continues to grow to this day.

So far I have only seen measures in the bills proposed that help with access to care, not curbing our current cost of healthcare.  When has the government ever implemented anything and have been on budget? Currently the proposed health care bills are being scored by the Congressional Budget Office to be around $900 billion.  Most of that money is being raised by excise taxes, fees on premiums, and medical supplies.

If you are a company that offers an employment based benefit package or you are a company that manufactures any type of healthcare product you will want to pay attention to this legislation. Now, if you tell a manufacturing company they now have to come up with a $200 million tax, sorry I mean fee, who do you think is really going to pay for that? Of course, the cost will be passed down to the consumer, which is why congress can use the word fee instead of tax, because it is not directly imposed onto the people.

2. What is the end result we really want our health care outcome to be? For the past several years we have had around 15% of Americans uninsured.  It has not gone down or up.  For the past several years the percentage of people eligible for Medicaid who actually take it is only 50%.

I would hate to spend a trillion dollars to still have around 15% of Americans remaining uninsured, while raising premiums of those who are.  The writing that is in the bill currently is weak for mandating you buy medical insurance.  If the current bill has a weak mandate then your healthy individuals who currently do not want to get insurance still will not get it, yet you need these individuals in the pool to help offset the risky individuals.

If you are an employer you will probably be subject to employer mandates. Most employers provide some type of medical coverage to their employees, but usually have the employee pay for dependents. With the proposed legislation, a small business would be required to pay 72.5% of full-time employee benefit cost and 65% of family benefit cost. Part-time employees will be included with this, but pro-rated to be defined by a new insurance commission. For example, take a restaurant that has five full-time employees, but twenty part-time employees.  That owner would have to provide insurance for all of those employees or pay a fine for each infraction.  I know a lot of my clients will have a hard time covering this cost.

3. Keep a watch out for anything in a bill that mentions “Cadillac Tax”. This Cadillac Tax poses a penalty on people who pay premiums over $8,000 a year for single and $21,000 a year for family.  Politicians think this is for executives with rich benefit plans, but there are people out there almost to this limit who are your typical blue or white collar job class. If they fall in this category then they would have to pay a 40% excise tax.  An excise tax is a tax that cannot be deducted from your overall tax liability.  For people to counter the cost of premiums and avoid the tax, they would have to get on a worse plan, for example – a $3000 deductible instead of a $1000 deductible.

I am all for health reform, but am not seeing anything that is addressing rising healthcare costs or malpractice law reform. I have a hard time supporting a bill that creates a disparate impact upon small business owners.