Picking The Best Health Care Policy For N.J. Businesses

NJBIZ — Tuesday, February 23, 2010

By Shankar P.

The drumbeat over health care reform has resumed with vigor ahead of Thursday's proposed bipartisan meeting on the subject in Washington, D.C. On Wednesday, the nonprofit New Jersey Policy Perspective will release its report analyzing the implications of the three versions of health care reform policy makers are considering — the House version, the Senate one and the concept President Barack Obama announced Monday.

"From a small-business perspective, the report looks at how many business owners in New Jersey could be eligible for tax credits to provide health insurance to their employees," said Eve Weissman, health care campaign coordinator at New Jersey Citizen Action, a nonprofit in Highland Park. Citizen Action and New Jersey Policy Perspective are part of a broad coalition called New Jersey Consumer Voices for Coverage Leadership Team.

Both the House and the Senate bills provide tax credits to offset premium costs for employers with fewer than 25 employees. New Jersey has about 215,000 small establishments with 1 to 25 employees each, many of which would be eligible for this tax credit, Weissman said.

At its Wednesday event in Princeton to release its report, New Jersey Policy Perspective plans to have a small-business owner "who has experienced a rate hike of 124 percent, and have other examples," Weissman said. Her own organization has seen health care premiums rise 34 percent over the past year, she said.

The report, authored by Ray Castro, senior policy analyst of New Jersey Policy Perspective, identifies benefits to Garden State families and businesses and the state economy, including increased federal funds, through subsidies, for low- and middle-income families to buy insurance; a decrease in the state's uninsured; and tax credits for small businesses, among others.

The report also makes the case that the health reform bills in both houses of Congress, if passed, "would result in positive outcomes for New Jersey's economy and health care system." Obama's version promises more help to all states pay for new Medicaid enrollees and put off a tax on high-cost insurance plans sponsored by employers, among other features.

Weismann said the report will identify the best parts of each version of the bill "to lower cost and expand access to coverage." Insurance companies are "extremely profitable," and reduced costs for coverage "is not too much to ask," she added.

Not so, said Wardell Sanders, president of the New Jersey Association of Health Plans, in Trenton, which represents major health plans in the state, including Horizon Blue Cross Blue Shield, Aetna and AmeriHealth HMO.

"Folks look at HMO profits as what you have to address," he said. "HMO profits in 2009 were less than one-half of 1 percent, and the majority of HMOs lost money in New Jersey," he said.

Sanders is convinced the focus should be on expensive health care services. "High premiums are just a reflection of the high underlying health care costs," he said. He wanted attention on "egregious charging practices" in the state, such as $8,000 for earwax cleaning and ambulatory surgical centers levying facility charges that are "over a hundred times what Medicare would allow."

Those cases are "not anecdotal or rare, but a significant driver of health care premiums," Wardell said.

Author Shankar P. covers life sciences, energy and corporate strategy. He has been at NJBIZ since 1999.

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