A Health Insurance Discussion

Earlier today, a small business owner friend of mine sent me this message:

“Glad to see you are blogging again. I don’t know much at all about the new health care bill, but based on what I learned the other day on a restaurant focused webinar this is what I think: You, a self-employed business owner without employees are probably winners. We, having less than 50 full-time employees, with an average wage of less than 50K a year and because we offer health insurance to them…MAY qualify for tax credits. The attorneys and regulators who will flesh out and interpret the rules and qualifying amounts, income, credits etc. are winners.

I think the losers will be the working poor. Based on what I heard, which maybe wrong, there will be a lot of ways around paying for insurance or paying the penalty. For one it only applies to full-time workers so there will be an incentive to keep employees under 30 hours a week. There also appears to be a seasonal worker clause. So anyone who works 120 days of less does not qualify. I can see where business decisions will be made with an eye to avoiding the penalties or the insurance payments. We’ll see.”

Here was my response to him:

No doubt there will be a need to fix loopholes and any wrong incentives that would encourage underemployment. With the system in place before the health care reform was recently signed into law, we could not receive any health insurance coverage, at all, as self-employed individuals because of our so-called pre-existing conditions. To be allowed to purchase health insurance, we had to incorporate our business (i.e. pay yearly fees to the state) so we could create a group of employees to which, insurance companies cannot refuse coverage. In other words: we could not get health insurance as individuals, we could only get it as employees. Our small business is in the same situation as my friend’s: we are a company of less than 50 employees, like most companies in this country.

For our family of four, we’ve been paying over $1200/month for diminutive health coverage with high deductibles. Last November, for no documented reasons, Blue Cross sent us a note informing us of a 38% increase on our premium starting the following month. With the current state of (our) business, we had to drop dental coverage and go to an even more minimal medical coverage of 7 visits per year (for the entire family!) and prescription coverage. Because of our current insurance plan costs, I have not seen a doctor in almost three years as I am saving the visits for our kids. So… I pay almost $14K/year and feel I cannot splurge on a yearly checkup… I believe that is WRONG, in the “best medical system in the world” as Ohio Rep. John Boehner would have us believe.

My small business owner friend is correct, in saying that the new law will help us – Indeed, the law will enable anyone to have free preventative care; it also looks like it will enable us to get better coverage for a fraction (to be determined) of our current cost, including the possibility of closing the corporation and going back to a self-employed status to save on unnecessary costs, like yearly corporation fees, filing taxes twice, etc.