If Mass. Small Businesses Want a Better Health Care Deal, They Should Back Single-Payer Health Care

By Jason Pramas
OMB Editorial
Open Media Boston
Nov. 15, 2009

It was strange to read today's Boston Globe article about the response of some Massachusetts small businesses to the premium increases that the health insurance companies are proposing for next year. Though the average increase for small businesses will be 10 percent - an already ridiculously high figure - some of these businesses will see their premiums go up by much more than that. Especially clients of Blue Cross/Blue Shield - some of whom will see their premiums go up by nearly 50 percent. To progressives, it is hardly shocking news that health insurance companies are much like cats. In that the answer to the eternal question "why do cats lick themselves?" is more than passingly similar to the answer to the question "why do health insurance raise their premiums every year?" ... because they can. At the moment, the MA Division of Insurance does not appear inclined to use its regulatory powers against health insurers that are gouging the public at every turn. So although Gov. Deval Patrick has asked the Division of Insurance to hold informational hearings on the small business premium increases, they probably won't amount to much of anything in the way of reform. My concern here is not for small business owners, although I'm not unsympathetic to small businesses. I'm far more concerned about their employees - many of whom do not get health care benefits as it is. Except through the Mass. Health Connector system that forces all but the poorest individuals to buy iffy health care plans from the very same health insurers that are allowed to continue reaping huge profits even as the ranks of the jobless skyrocket. For those employees of small businesses that do get health care benefits through their employer, they will often be pushed from semi-decent private health care plans to worse plans in the Connector system.

This begs the question, "why do small businesses in Massachusetts continue to refuse to back single-payer health care at the national level?" Physicians for a National Health Program and other advocates have long pointed out that with an employer tax contribution of 7 percent of wages together with an employee contribution of 2 percent of wages that the federal government could run a program that would cover every single U.S. resident from cradle-to-grave - and provide top-flight medical, dental and vision coverage to all. For small businesses that provide health care benefits, such a plan would generally cost less than what they currently pay out to health insurers. For small businesses that don't provide health care benefits, it would allow them to cover their employees for much less than existing plans cost. And for their employees, annual out-of-pocket costs would be much more reasonable then they are now.

Instead of supporting this logical solution to their health care cost woes, the small businesses quoted in the Globe piece mostly point fingers at the always rising fees charged to insurers by hospitals and doctors. Typically, they ignore the fact that health costs are going up for reasons that have much more to do with the existence of a private health care market then anything else. For example, with a national public health care system there would be no need for huge advertising budgets for hospitals, doctors groups, or insurers. Extra layers of bureaucracy currently needed for health care providers just to deal with health insurers can be eliminated. Chronic conditions will be better treated by front-line medical providers - reducing the need for people to rely on expensive critical care after years of having to neglect their health to save money. There would be less need for redundant expensive diagnostic equipment to be purchased by every hospital and clinic. Most importantly, doctors, hospitals and drug companies would be forced to negotiate reasonable rates with the national health care system - which would probably go very far towards keeping costs down.

So given all that, it makes even less sense that small business owners don't start agitating along with other constituencies to demand a real universal national health plan rather than watch their health costs continue to go up until they cut the relatively meager benefits some of their workers currently enjoy.

I think it would behoove small business organizations to think hard about this issue. Because, even as I write, a really bad national plan that leaves giant insurance companies firmly in the drivers seat of American health are policy has been pushed through the House of Representatives and is on its way to the Senate for a vote - where it very well may get shot down. If it gets passed, it's bad, because then all Americans will be forced to participate in a larger version of the Massachusetts experiment in a fake "universal" health care plan that seems to be just a way to force more people into buying inadequate private insurance. If it doesn't get passed, that's probably the better outcome. Although not really, because Americans will still lack a national health care system, and it will be another long wait before political momentum for reform builds up again. The entry of the small business sector into the debate on the side of single-payer health care - which is not even on the table nationwide - could be a real game-changer. Such a move would benefit working people in a big way. But it would also benefit the small business owners. Which would be an acceptable outcome from the perspective of this publication.

[Then we'd want to get small businesses to agree to stronger labor legislation. Though that fight would likely have to wait for another day.]

Jason Pramas is Editor/Publisher of Open Media Boston