Monday, June 14, 2010

qotd: Insurers wipe out small business credits

San Francisco Chronicle
June 12, 2010
Insurance premium hikes hit small business hard
By John Gonzales

California small-business owners expected to be early beneficiaries of health care reform, with billions of dollars in federal tax relief becoming available this month to help them purchase medical coverage for their employees.

The credit is worth up to 35 percent of a small business' premium costs.

But many said the tax credits granted under the legislation have run up against a new hurdle: a spate of rate increases by insurance companies, including 58 to 75 percent hikes levied recently by Blue Shield of California.

The company offered other coverage without the high rate increase, but included similar deductibles and added co-pays of about 20 percent. The Blue Shield hikes are in line with increases from all major insurers on small business health savings plans, said (Tom Epstein, vice president of Public Affairs for Blue Shield of California).

"Anthem Blue Cross offered this first," he said. "Health Net followed us. Aetna and United offered products like this. Every one of these insurers had very substantial rate increases."

"That money is going right back to the insurance companies," said Brad Wing, co-owner of the San Francisco Advertiser, who received notice of his 58.3 percent increase in April.

"Normally, rates go up 10 to 15 percent and you can swallow it," he said. "But at 58 percent, there's just no way."

Comment:  The Patient Protection and Affordable Care Act (PPACA) is supposed to make health care affordable, primarily by subsidizing private insurance plans. It begins immediately by offering small businesses a credit worth up to 35 percent of premium costs. With Blue Shield of California increasing rates by as much as 58 to 75 percent, how is the small business owner going to find relief when the insurer takes the full subsidy and charges what amounts to another 23 to 40 percent surcharge?

Several individuals who no longer want to hear our single payer message tell us that PPACA is now the law of the land, that private plans are here to stay, and that we need to quit attacking the private insurers and get on with making PPACA work.

When non-profit Blue Shield of California is the best the industry has to offer, how can we possibly ever make that work? We can't. We need to quit supporting PPACA and get on with making an improved Medicare for all work!

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