Health Insurance and Small Businesses: Easy to Swallow?

Last week I attended a conference on health care reform sponsored jointly by the Young Presidents Organization (YPO) and the Harvard Business School Health Industry Association. One of the presentations was on the upcoming “state exchanges” which are supposed to be in place by 2014 – some states (Massachusetts, Utah) have exchanges up and running, others are working hard to put their program in place, and a number of others seem to be procrastinating to the last minute.

Also in 2014, small business owners will have the opportunity to use these exchanges to obtain health insurance for their employees, basically by giving them money towards the premiums and sending them shopping. Large business will be able to do this starting in 2017.

At the YPO/HBS conference, we took a straw poll of the business owners asking: “How many of you will keep offering health insurance through insurance contracts managed by you (like you do currently), and how many of you will send your employees to the exchanges (essentially getting out of the middle of the health insurance business)?” 95% of the business owners plan to send their employees to the exchanges.

If these small and medium business owners are representative (and I think they are), this will be a major change for employees and, I think, a benefit overall for business owners. I know from my own experience that: (1) employees want their employers to help pay for health insurance, and (2) few employees are happy with the annual changes to health insurance (higher co-pays and deductibles, changes in networks).

Of course, all this could be moot if the Supreme Court knocks down the Affordable Care Act (a.k.a. Obamacare), or if we have a Republican sweep in the 2012 elections. Interesting, most at the YPO/HBS conference thought that the health care reform train had already left the station, and that something like the exchanges will come into play no matter what.


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