More pressing news about the economy may be pushing it off the radar screen, but healthcare remains a huge financial challenge for small businesses.
At the same time, though, the whole healthcare picture has never been more uncertain. President Obama and key members of Congress are vowing to make healthcare a top policy priority this year, but no one knows what the solution will look like or whether anything will be enacted. Healthcare policy experts’ assessments boil down to this: It’s anybody’s guess.
But that doesn’t mean you can’t do something now. Whether you buy health insurance for yourself only or cover your employees, there are steps you can take to try to rein in the cost for yourself and for your business.
1. Shop around. If you’ve been buying your health benefits for a while from one vendor, take a close look at what others have to offer. You can look on the Internet, where a few sites pull together insurers and provide competitive quotes on a wide array of policies. They include gohealthinsurance.com and ehealthinsurance.com.
In both cases, you put in information about your age, health history, habits and location, and they give you a range of policy options with quotes for monthly premiums. Understand that, at this stage, nothing is guaranteed, but you get a starting point in what can seem like an overwhelming process.
Another option is to find a local independent health insurance broker or agent as an objective source of advice. As with any professional, you’ll want to make sure there’s a good fit with the person – that he or she understands your business situation.
When you get a series of proposals, read them carefully and make sure to compare apples and apples. You’ll have to decide how to balance the best possible price and the most reasonable coverage.
2. Gang up. A rule of thumb in the insurance business is that the more people who can be covered, the lower the price. So if you haven’t already, start researching whether there are larger group plans that you and your business may be eligible to join. Trade associations, local chambers of commerce, manufacturers’ groups and other kinds of organizations may allow members to buy into a group plan.
You might also consider allying with other employers, in your own industry or not, to form such a group yourself. That’s much more complicated, so don’t try it unless you can find people willing to commit the time, energy and resources to pull it off. Also, because every state differs in how it regulates such insurance groups, make sure you take time to learn about the rules where you live.
3. Consider HSAs. Health Savings Accounts are on the rise. HSAs, paired with high-deductible health insurance plans, allow people to set aside tax-deductible dollars in a bank account dedicated for out-of-pocket medical expenses.
Premiums for HSA-eligible health insurance plans tend to be lower than for other plans, but you should still make sure you have enough money to fully fund the savings account, which is limited to $3,000 a year for an individual or $5,950 for a family, according to the Internal Revenue Service. If you don’t incur enough expenses in a year to use up all the money, you can keep it to use in the next year. You can continue to make pre-tax contributions to your HSA on an annual basis.
The theory behind HSAs is that people will spend more carefully if they control their healthcare dollars. Experts remain deeply divided over whether that works. Some studies have shown that given the choice, people will “save money” by not spending it on things like preventive care that could well save them money in the long run.
4. Keep yourself and your employees healthy. Wellness programs that help people stop smoking, get more exercise, eat sensibly and take more charge of monitoring their health remain popular. These are long-term, individual solutions, but research suggests they can produce real benefits in reduced sick time and lower healthcare costs. They can also help foster teamwork.
5. Get involved. Organizations of many kinds are working to solve the healthcare problem. Some, like the Center for Health Value Innovation (www.vbhealth.org), offer practical solutions now. This group consists of employers working with government, medical organizations and healthcare providers and insurers.
The employers are mostly large, but small business input is welcome. The focus is on how to design cost-effective health plans and how to find long-term savings in health coverage. For example, CHV advises caution in cutting back on drug benefits, because if patients skip needed medication, they may need much more expensive care later.
Other groups promote specific policy solutions. They range from Physicians for a National Health Program (www.pnhp.org) to the National Small Business Association, which posts its agenda for healthcare reform at www.nsba.biz/healthreform.html. Their proposals vary considerably.
Another group is Divided We Fail (www.aarp.org/issues/dividedwefail). Spearheaded by AARP, it brings together various organizations – unions, independent businesses, big and small companies – to find common ground on this tough issue.
None of these is a silver bullet, but you need to start somewhere if you hope to have a healthy work force, a healthy family and a fiscally healthy business.
