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A Good Match!

Small businesses are responsible for about eighty to ninety percent of all businesses and employment in the United States. Therefore, they comprise the largest workforce in the US. Health care is the single largest problem facing employees and Middle America. These two major components of our society converge at a point where this workforce is in dire need of affordable health care coverage. In the past it didn't matter if an employer was able to afford health care for his/her employees but this has changed and you need to be ready for more changes – now! Why? Universal health care is here, where everyone has to pay his or her portion of the overall health care bill just as we all now pay for auto insurance. Of course, the major portion of the health care insurance/coverage burden, like it or not, is going to fall on small business owners. However, there's consumer-driven health care (CDHC), which can help you dramatically! This article explains what CDHC is and how it will help, and maybe save, many small businesses. We'll also discuss why this is a good business decision that may cost you nothing and still provide health care coverage for you and your employees.

Consumer-Driven Health care and Universal Health care

Consumer-driven health care is a concept being driven by the Federal Government to help deliver it (Fed.Gov't)) from the financial strain now on Medicaid and Medicare. These are two entitlement programs the former for the poor and the latter for the elderly and disabled. Medicaid is funded by the Federal Government but gives each state oversight for its portion. Medicare is directly through the Federal government controlled by the Health and Human Services Dept.

To help alleviate the health care cost burden consumer-driven health care has seemingly come to the rescue. We say seemingly because it's still new. This idea of consumers directing the purchasing of health care rather than health care experts and providers (hospitals, HMOs and practitioners) determining a patient's course was championed by Prof. Regina Helzinger of Harvard University, about 17-18 years ago. The idea, which is common in any other industry, is novel in health care. CDHC allows the consumer to decide, without interference from Human Resources Departments, employers, HMOs, third party payers, etc. the choices of providers and services a consumer desires. Its main instrument is a high deductible/catastrophic insurance product with an attached Health Savings Account (HSA). The employer and the employee fund HSAs. They are portable and the unused portions can be invested (similar to an IRA but used exclusively for health care purchases). The HSA can also be accumulated from year to year, in other words there's no use it or loose it penalty.

Enter Universal health care! This is not the socialistic universal health care we see in Europe where there's a one-payer system – the government, paid for through taxation, but a more free market form. The US model, now in Maine 2003, IL 2005, MA 2006 and VT 2006 have, as the basic format, that every citizen of these states must demonstrate some form of healthcare insurance or coverage when they file state taxes or the state will raise their individual taxes. Each state's model is specific for that state.

In these states the burden has fallen, as expected, on employers, who vigorously complained, as in Massachusetts', to legislators that they were going to be the fall-guys to get their employees coverage; this will, no doubt, affect the costs of doing business. So, hold on…there's Universal health care coming to a state near you: CA, CT, FL, HI, MO, NH, NY and WI all have Universal health care on their legislative agendas in 2007.

Get Ahead of the Curve

You can get ahead of the curve, save money, get health care coverage for you and your employees, make it budget neutral (pay nothing) and lower your tax exposure all at the same time.

There's another form of CDHC that is NOT an insurance product but provides health care "coverage" at affordable prices ranging from $11.95 to $59.95 per member per month for individuals or families. How does this work? The key is that it's NOT insurance, it's discount health care coverage. The difference is that the CDHC coverage is like getting a Costco or Sam's Club membership and operates similarly except it's to purchase health care. As a member you have practitioners that will accept your membership and charge you a considerable discounted fee, somewhere between 50% and 80% off the usual and customary price. It includes hospitals and practitioners e.g. as doctors (specialist and primary care), dentists (orthodontists, generalists, and others) and chiropractics. Some companies offer vision, prescription, labs, diagnostics and even veterinarian services.

For a small business owner to get all of the advantages let's first look at this purely from a business perspective. If you were to purchase one of these "provider access/discount coverage" products it can be paid for using pre-tax payroll dollars paid for by employees. That is, the costs for most of these discount coverage products are so low that if offered to employees they can purchase it with their own payroll dollars before taxes. If done as a pre-tax payroll deduction the company's tax burden is reduced thus the company saves money. Additionally, the company gains as it offers these benefits, which are not for from it's own budget making it budget neutral. Of course, if the company chooses they can pay for all or portions of the coverage for their staff helping with employee retention. However, you have affordable options!

As a healthcare benefits package these are some of the offerings: affordable, makes providers of healthcare accessible, discounted, covers many different healthcare services, no age limits, not restricted by pre-existing conditions, can be discontinued at any time, covers households (anyone who lives at the members address regardless of citizenship, relationship or no relationship) and others. A potential drawback is that these products require the services be paid at the time they are rendered. In other words, like Costco or Sam's Club when you get to the register you've got to pay the bill. Large balances can be paid off as any other bill – by installments; but things such as annual/regular doctors/dentist visits must be paid at time of service.

Why would doctors and other practitioners agree to this? It's because they're loosing money on HMOs and insurance companies who pay approximately $.40 for every $1.00 submitted for reimbursement then, there's at least ninety days to get paid providing there are no hassles.

With respect to hospitalizations this is now acceptable at all hospitals except VA hospitals. Some companies offer patient advocate negotiating teams for their members. If hospitalization is required they negotiate with the hospital, usually at a 75%-80% discount with a structured payoff of the balance in 3-5 years. Last, when looking for one of these companies it's imperative that the company be a member of the Consumer Health Alliance the only nationally recognized association for these companies; member companies must agree to strict operating guidelines.

For more information on Consumer Driven Healthcare visit:


Ameriplan USA at:


www.deliveringonthepromise.com/40446572


RClaypool@ameriplan.net


1-800-431-0327


713-726-6075