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Opinion: Health care reform unpacks benefits to business

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The first anniversary of health care reform on March 23 was marked by numerous media reports about the amount of confusion that still exists about the law.  Surveys both nationally and in Missouri reflect a lack of understanding among individuals of what the law says and how it will impact them personally.

Small-business owners are confused, too. More than 85,000 of Missouri’s small businesses already are eligible for tax credits under the Affordable Care Act to help offset the cost of health insurance for their employees. Only about half of those businesses, however, have claimed the subsidies.

Currently, small businesses pay an average of 18 percent more for health insurance for their employees than do large businesses. The relief offered through the new law should go a long way toward leveling the playing field. Health insurance exchanges that are set to begin in 2014 will allow the self-employed and small businesses (with up to 100 employees) to obtain insurance rates on par with those offered to large companies. Exchanges will offer owners more choices, greater bargaining power and lower administrative costs.

The law also benefits larger businesses in several ways. According to a recent study by health economists David Cutler of Harvard University and Karen Davis and Kristof Stremikis of the Commonwealth Fund, the law may have a direct impact on the economy in the future because of its power to reduce health insurance premium growth, freeing employers to invest those significant dollars in other areas of the business. Their findings project that premium reductions could lead to the creation of approximately 250,000 to 400,000 jobs a year.

Annual cost increases in medical care and health insurance have an immediate negative impact on the U.S. economy. Health care spending has tripled during the past 20 years, causing more businesses and individuals to struggle to afford health coverage and medical care. Currently, U.S. health care expenditures comprise 17 percent of the gross domestic product – a higher rate than any other industrialized nation. Without changes to the health care system, health care expenditures would expand to an estimated 25 percent of the GDP by 2025.

Health care reform has a role in both stabilizing the economy and reducing the rise in health care spending. For example, the law’s focus on preventive health care would result in less spending to treat chronic diseases such as diabetes and heart disease that are often preventable. Chronic diseases cause seven out of every 10 deaths in Missouri and account for three-fourths of health care spending.  The new health care law addresses this issue by requiring health plans to cover preventive and wellness services, and by offering incentives for businesses to provide programs that promote wellness and healthy behaviors.

Health care reform is important to the business community, especially small businesses in Missouri. It impacts both the health and the economy of the nation. Implementation of the Affordable Care Act will occur over the next several years, and it is important that business owners and their employees are aware of the benefits it can bring.

Dr. James R. Kimmey is president and CEO of the Missouri Foundation for Health in St. Louis. MFH Director of Health Policy Ryan Barker contributed to this column. The authors can be reached at covermissouri@mffh.org.[[In-content Ad]]

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