How to reform health insurance for small businesses | Opinion
There are several steps that could reduce the cost of health care and make it simpler for small businesses.
- Abir Sen is CEO of Gravie Inc., a health benefits marketplace.
With open enrollment season recently behind us, many employers and individuals are less than satisfied with their final health plan choices after spending weeks or months comparing plans and weighing costs – and understandably so.
The complexity of the industry and the increasing prices have put a strain on many businesses and decision makers.
While many discussions have occurred about how health-care reform needs to take place within the individual market, I also believe there are very real opportunities to reform how corporations and employer-sponsored plans intersect with the individual market, and how we can better meet the needs of individuals and their families at a lower cost to employers.
Level the playing field for small businesses
Large businesses are able to use their scale and purchasing power to offer better benefits at a cheaper price for their employees, establishing an inherent advantage over small businesses.
We should support our small businesses by allowing them to pool together to offer insurance, granting access to the same benefits and prices that large businesses and their employees are exposed to.
Make it easy for businesses to contribute towards plans employees choose in the individual market
The concept of health insurance at its most basic level is simple: you may fall sick when I don’t, and I may fall sick when you don’t – so if we pool our resources together, we will be able to afford both of our needs when we get sick.
It stands to reason that the key to keeping this system stable and affordable is that it includes a broad-based pool of people participating.
We should do everything in our power to include as many people as possible in the individual market.
By allowing employers to contribute to a plan in the individual market, we could not only broaden the pool of those participating, but also greatly reduce the administrative burden on employers, especially small businesses.
Allow employers to contribute towards a government option
Today, government health plans are only available to individuals who aren’t receiving or can’t afford insurance elsewhere.
As a result, this leads to a more negative risk selection and higher costs that the government will need to continually subsidize. If individuals can opt into a government option with defined contribution from their employers, the risk pool will diversify leading to a more stable and self-sustaining system with more people participating.
Create “focused coverage” plans
The industry has evolved a lot over the years, to the point where health plans cover a wide variety of things.
However, it’s structured in a way that doesn’t offer great value to a wide variety of consumers.
Often consumers spend thousands on their plan, only to have to spend thousands more on their deductibles before they see their benefits.
Many opt out all together as a result. An example of a focused coverage plan could be “hospital insurance” – where hospital visits are the only thing covered, but they are covered really well.
While we can all agree that health-care reform needs to take place for individuals and their families, we must take into consideration how employers of all sizes fit into the equation, to understand the full picture and propose sustainable, effective solutions.
Abir Sen is CEO of Gravie Inc., a health benefits marketplace.
