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SMALL BUSINESS HEALTH INSURANCE

STILL HAS GAPS

By Pat Johnson

Small Businesses have many more choices for health care coverage than they had even five years ago when it comes to health care coverage. The State of California improved access to coverage for those individuals who have life-threatening illnesses and many carriers now offer coverage for group sizes of even “one” employee. The Federal Government is about to implement a new program to provide health insurance to the children of indigent adults.

But we still have 42 million people who are uninsured in the United States, 75% of whom are adults. Many of these adults are working in small businesses or are self-employed. The leaders in Washington D.C. seem to lack the political will to solve this problem once and for all.

Affordability has become the next dragon to slay for the small business employer. Most people would agree that it would be good to offer health insurance coverage to employees and their dependents. The decision to do so has a huge impact on the bottom line of employers. For emerging businesses, the burden is too great to bear.

Many professionals who employ others usually purchase Individual Coverage for themselves and their own dependents. They do not extend health coverage to their employees.

For most health policies, the age of the employee makes a big difference as to the premium charged to the employer. Obviously, the older the employee, the higher the premium. That fact is made worse when coverage for dependents is taken into account. The cost for employees over 50 who have spouses over 50 can be prohibitive for the employer to consider.

If coverage is extended to the employee, the employee does not usually pay for the coverage of the dependents. Even cost- sharing options don’t work, since premium rates are too costly for employees to bear. The effect is that the employee may pay a share of the premium cost for himself/herself, but the dependents continue without any coverage at all. Without coverage, healthcare may not be sought on a routine basis, care may be delayed and preventive care may not be given.

This gap in coverage will only get worse as the “boomer” generation ages and is downsized into their own ventures in small businesses they build. Additionally, the class of uninsured adults and children will increase:

* as welfare entitlements are reduced by the federal government that must balance its budget;

* as restrictions are placed on immigrants for access to benefits and programs;

* as Medicaid eligibility requirements grow too complex for most people to understand and as continuing pressure is placed on everyone to reduce costs and free care is not very available.

The public debate on this issue should not be quieted until we take the entire problem into consideration.

Pat Johnson is President of Health Point Services of America, a health care consulting company in West Los Angeles.

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