[Senate Hearing 114-660]
[From the U.S. Government Publishing Office]
S. Hrg. 114-660
SMALL BUSINESS HEALTH CARE CHALLENGES
AND OPPORTUNITIES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON PRIMARY HEALTH AND RETIREMENT SECURITY
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING SMALL BUSINESS HEALTH CARE CHALLENGES
AND OPPORTUNITIES
__________
JULY 7, 2015
__________
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
LAMAR ALEXANDER, Tennessee, Chairman
MICHAEL B. ENZI, Wyoming PATTY MURRAY, Washington
RICHARD BURR, North Carolina BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia BERNARD SANDERS (I), Vermont
RAND PAUL, Kentucky ROBERT P. CASEY, JR., Pennsylvania
SUSAN M. COLLINS, Maine AL FRANKEN, Minnesota
LISA MURKOWSKI, Alaska MICHAEL F. BENNET, Colorado
MARK KIRK, Illinois SHELDON WHITEHOUSE, Rhode Island
TIM SCOTT, South Carolina TAMMY BALDWIN, Wisconsin
ORRIN G. HATCH, Utah CHRISTOPHER S. MURPHY, Connecticut
PAT ROBERTS, Kansas ELIZABETH WARREN, Massachusetts
BILL CASSIDY, M.D., Louisiana
David P. Cleary, Republican Staff Director
Lindsey Ward Seidman, Deputy Staff Director
Evan Schatz, Minority Staff Director
John Righter, Minority Deputy Staff Director
______
Subcommittee on Primary Health and Retirement Security
MICHAEL B. ENZI, Wyoming
RICHARD BURR, North Carolina PATTY MURRAY, Washington, Ranking
JOHNNY ISAKSON, Georgia Member
RAND PAUL, Kentucky BARBARA A. MIKULSKI, Maryland
SUSAN M. COLLINS, Maine BERNARD SANDERS, Vermont
LISA MURKOWSKI. Alaska ROBERT P. CASEY, JR., Pennsylvania
MARK KIRK, Illinois AL FRANKEN, Minnesota
TIM SCOTT, South Carolina MICHAEL F. BENNET, Colorado
ORRIN G. HATCH, Utah SHELDON WHITEHOUSE, Rhode Island
PAT ROBERTS, Kansas TAMMY BALDWIN, Wisconsin
BILL CASSIDY, Louisiana CHRISTOPHER S. MURPHY, Connecticut
ELIZABETH WARREN, Massachusetts
Sophie Kasimow, Minority Staff Director
(ii)
C O N T E N T S
__________
STATEMENTS
TUESDAY, JULY 7, 2015
Page
Committee Members
Enzi, Hon. Michael B., Chairman, Subcommittee on Primary Health
and Retirement Security, opening statement..................... 1
Sanders, Hon. Bernard, a U.S. Senator from the State of Vermont.. 4
Murphy, Hon. Christopher, a U.S. Senator from the State of
Connecticut.................................................... 28
Witnesses
Harte, Thomas M., Owner, Landmark Benefits, Hampstead, NH........ 6
Prepared statement........................................... 7
Scott, James G., Owner, Applied Policy, Alexandria, VA........... 11
Prepared statement........................................... 12
Conklin, J. Kelly, Owner, Foley Waite LLC, Kenilworth, NJ........ 14
Prepared statement........................................... 15
Corlette, Sabrina, J.D., Senior Research Fellow and Project
Director, Georgetown University, Washington, DC................ 18
Prepared statement........................................... 18
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Response by J. Kelly Conklin to questions of the HELP
Committee.................................................. 42
Response by Sabrina Corlette, J.D. to questions of Senaor
Warren..................................................... 43
(iii)
SMALL BUSINESS HEALTH CARE CHALLENGES AND OPPORTUNITIES
----------
TUESDAY, JULY 7, 2015
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:01 p.m., in
room SD-430, Dirksen Senate Office Building, Hon. Michael Enzi,
chairman of the subcommittee, presiding.
Present: Senators Enzi, Sanders and Murphy.
Opening Statement of Senator Enzi
Senator Enzi. I'll call to order this Subcommittee on
Primary Health and Retirement Security Roundtable. I want to
thank the witnesses for coming today, and I want to thank
Senator Sanders and his staff for working to put together a
bipartisan conversation about this important issue of small
business healthcare.
I'd also like to thank the colleagues who have helped work
on this, who will be interested in and appreciative of the
testimony that all of you provided. That's been shared, and I
appreciate the format that you used. You all answered the same
questions. That's what we do at a roundtable.
Senator Kennedy and I used to do a lot of roundtables. One
of the purposes of a roundtable is not so that the two sides
can beat up on witnesses. It's so that we can actually get
information from the witnesses that will help in making future
decisions. It's OK for there to be a discourse between the
people that are on the panel as well as with any questions from
Senators.
Of course, what we're hoping--I've always had this 80
percent rule. I've found that we can talk civilly about 80
percent of the issues, and out of those issues, we can often
pick an issue that we can agree on 80 percent. It always seems
like there's 10 percent that each side has that they've been
butting heads on sometimes for years.
Some of the legislation I've worked on--sometimes there's
been 10 or 12 years of fighting through the same arguments. One
of the problems is that the staff are so used to the arguments
that when they hear a word, they can respond to that word
without ever listening to the rest of the sentence. It's a
challenge to get beyond that and actually get to the meat of
the subject.
Sometimes we were even able to do 100 percent. That means
that on that 20 percent that we'd been fighting over for years,
we were able to find a third way that both sides could take
credit for.
The purpose of a roundtable, of course, is just to have a
discussion on the problem and the solutions for it. One of the
first ones that I held with Senator Kennedy, when it was over,
he said,
``You know, it's kind of interesting to learn
something about a subject before we do a bill on it.''
That's what we're hoping for today.
I appreciate the participants taking the time to put
together the papers that you did. Those are very succinct and
helpful. I think that we have a representation here at the
table of a lot of different sectors, so there's a unique on-
the-ground perspective of what is reality for small business. I
will ask each of you to say a few words shortly after Senator
Sanders finishes.
I'd like to welcome Tom Harte, who is the President of
Landmark Benefits in New Hampshire. Mr. Harte's company,
Landmark Benefits, provides employee benefit services to over
300 corporations and thousands of employees. He comes to the
table with over 25 years of experience in designing,
implementing, and managing the employee benefits.
Mr. Harte has built one of the most successful employee
benefit companies in New Hampshire with a focus on
contributions to the industry, charity, and community. In
addition to his role at Landmark Benefits, Mr. Harte was the
national president of the National Association of Health
Underwriters from 2013 to 2014. He has consistently promoted
the importance of reducing the cost of health insurance with a
deliberate focus on improving the health of employees and
increasing the transparency of the cost of healthcare services.
Sabrina Corlette is a Senior Research Fellow and Project
Director at the Center on Health Insurance Reforms, CHIR, at
the Georgetown University's Health Policy Institute. She
directs research on health insurance reform issues as they
affect consumers and patients. Her areas of focus include State
and Federal regulation of private health insurance plans and
markets and implementation of new insurance market rules under
the Affordable Care Act.
Prior to joining the Georgetown faculty, Ms. Corlette
worked at the National Partnership for Women and Families, and
from 1997 to 2001 for the Senate Health, Education, Labor, and
Pensions Committee--this committee.
Jim Scott is a local area small business owner. He is the
president and CEO of Applied Policy, a company in Alexandria,
Virginia, that he founded in 2009. It's a seven-person company,
and you offer your employees a variety of fully insured
products and a generous employer contribution.
Before founding Applied Policy, Mr. Scott worked for
Hoffmann-La Roche, focusing on Medicare coding, coverage, and
payment, and he served as the company's principal point of
contact with the Centers for Medicare and Medicaid Services,
CMS. Before joining Roche, Mr. Scott served as the senior
legislative advisor at CMS.
Prior to his service with CMS, Mr. Scott was an assistant
counsel with the Office of Legislative Counsel of the U.S.
Senate. Mr. Scott serves on the Board of Directors of the
Alliance of Aging Research, founded the Northern Virginia
Health Policy Forum, and is a member of the steering committee
of the Partnership for a Healthier Alexandria.
Kelly Conklin is the owner of Foley Waite, an architectural
woodworking company based in Bloomfield, New Jersey, and is
here today to discuss his company's experience purchasing
health insurance for his employees over the last few decades.
Mr. Conklin lives in Glen Ridge, New Jersey, with his wife and
business co-owner, Kathryn W. Schackner. In 1978, he and Ms.
Schackner founded Foley Waite LLC.
The firm currently has 11 full time employees. Foley Waite
fabricates cabinets, furniture, doors, paneling, and moldings
in a 13,600 square foot facility in Kenilworth, New Jersey.
Conklin attended Rochester Institute of Technology, the School
for American Craftsman, and Schackner is a graduate of the
Philadelphia College of Art.
Mr. Conklin is a member of the Executive Committee of the
Main Street Alliance and is the Alliance for a Just Society
board representative of MSA, a steering committee member of the
New Jersey Main Street Alliance, and he served 14 years on the
Glen Ridge Planning Board, leaving in 2014 as the chairman.
From 1998 to 2010, he served on the board of the New Jersey
Policy Perspective, a nonpartisan New Jersey based think tank.
I'll keep my remarks brief so we can get to the real
discussion. I'd like to touch on the heart of what we hope we
can get to today.
Small businesses have traditionally had some of the least
competitive, most expensive health insurance options out there.
I was in the shoe business. I know about that. Yet so many
business owners still view it as a priority to assist their
employees in purchasing health insurance. I know that when I
was running my small business, I found out that any business
looks easy to operate as long as you don't have to make the
decisions for it.
A lot of people don't realize that in a small business, the
owner might well have to wash the windows, sweep the sidewalks,
clean the toilets, do the bookkeeping, and wait on customers,
preferably not in that order. I also know there's no better
feeling than seeing your dreams become reality with the success
of your own business.
A big part of making all that happen is your employees. As
the owner, you are linked to these people, and there are
certainly market competitiveness reasons to provide health
insurance, but also a sense of responsibility, knowing their
family as being part of your enterprise together.
I'd like to touch on the issues that small businesses face.
Government has tried many things to try to fix the market. I
think there is a consensus that those efforts haven't gotten us
over the finish line.
Today, I'd just encourage the group to think a little
differently. There are a lot of changes that would improve
things and meet a short-term need. We also need to think past
the next plan year. We should try to ask the question of what
this market should look like in the future and what do we need
to do to get there. I think all of you have addressed that in
your papers.
Just to clarify the process, once we finish our statements
here, I'll ask each of you to give a brief introduction of
yourself and any statement that you want to make on what you
think should be done to help small business, and then we'll
begin the questions. When it is time for that, if you want to
speak, just stand your card up, and that will help me to
recognize you, although today it may be easy to do. We don't
have 10 or 15 people on the panel.
With that, I'll turn it over to Senator Sanders for any
comments he may have, and then we can get into a discussion.
Statement of Senator Sanders
Senator Sanders. Mr. Chairman, thank you very much for
holding this hearing. Let me apologize to you and to our
witnesses that I'm not going to be able to stay for very long,
although this is a subject which interests me and the people of
Vermont very, very much.
I think the point that I would like to throw out--I'm not
going to be here for it, but maybe some of the panelists could
get into it--is to maybe address the issue of how it happens
that the United States of America, our great country, the
wealthiest country in the history of the world, is, in fact,
the only major country on Earth that doesn't guarantee
healthcare to all people as a right. That's point No. 1. If we
did that, a lot of aspects of this discussion might not be
taking place.
What we all know is God didn't create a situation where
businesses were obliged to provide health insurance to their
workers. That's a public policy issue. I think it began in
World War II for various reasons, dealing with the State of the
economy in World War II.
What concerns me, Mr. Chairman, very much is that, No. 1,
you have some employers, small and medium-sized employers, who
feel a moral obligation to make sure that their employees have
high-quality health insurance. Across the street, there may be
another employer engaged in the exact same business who has a
different point of view.
For no particularly rational reason, you have one guy who's
trying to do the right thing and spending a lot of money on it.
Another person is doing something different for his or her own
reasons, spending a lot less money on it. That's issue No. 1.
What rational sense is that?
No. 2, where I think we are at an international competitive
disadvantage is that our small, medium-sized and large
businesses spend an enormous amount of time--and it sounds like
folks like Mr. Harte help them in this area. All right. I have
20 employees. What is my best deal? How do I provide health
insurance to my employees in the most cost effective way?
That's kind of what you do, Mr. Harte. Right?
All right. Yet in other countries, small and medium-sized
businesses don't particularly worry about that issue, because
everybody in those countries has healthcare as a right. I live
100 miles away from Canada, and that's pretty much the story.
If you own a shoe store, Mr. Chairman, in one of those
countries, what those businesses focus on is how you sell as
many shoes as possible and not spend an enormous amount of time
on a very, very complicated issue. I'm sure the panelists will
agree with me that with the market changing every day, if one
person in your 10-person company comes down with cancer, that
changes the entire dynamics of what kind of premiums, what kind
of costs you're going to have for your insurance policies.
Mr. Chairman, I think it is important for us to understand
what the problems facing small and medium-sized businesses are
today. I think what is even more important is that you and I
who are on the committee, this committee that wrote the
Affordable Care Act--God knows how many hearings we had on
that, right, and how many meetings we had on that. The one
simple question we forgot to ask for a reason is: Why are we
the only country, major country on Earth, that doesn't
guarantee healthcare for all people, and what can we learn from
those other countries?
In the United States today, as all of us know--the chairman
and I will disagree, I'm sure--the Affordable Care Act has had
some modest gains in providing insurance for millions more
people; doing away with the obscenity of pre-existing
conditions; making healthcare available to younger people on
their parents' policies, et cetera.
But despite the gains of the Affordable Care Act, we still
have 35 million Americans who have no health insurance. Even
more significant, I think, is that we have millions more people
who are underinsured with high deductibles and high copayments.
How does that impact the health of people?
If I have a $5,000 deductible, as is not uncommon, and I
get sick, but I don't have the money, I'm not going to go to
the doctor. Four months later, when I'm really sick, and I go
crawling into the doctor's office, what will the doctor say?
``Why weren't you here when you were sick?'' And I say, ``Well,
I couldn't afford the deductible,'' and he says, ``I'm sending
you to the hospital.'' If maybe I had come in 4 months earlier,
I would not have to go to the hospital.
I think you have a system which has 35 million uninsured,
more than that underinsured, and here's the kick. For all of
that, we end up spending far, far more per capita on healthcare
as do the people of any other country--close to double, not
quite double, but far, far more.
You're a businessman, Mr. Chairman. Do we get good value
for what we're spending? We're spending a fortune. Do we get
good value? Are you going to sit here and tell me--which you're
not--that all of our people have health insurance? No, they
don't.
Is our life expectancy as high as many other countries?
Well, it's not. Is our infant mortality rate higher? Yes, it
is. We do well in some diseases. We treat some diseases very
well. Some diseases we don't treat particularly well.
If we are spending all of this huge amount of money, I
think the end result is that we're not getting good value for
what we are spending. What good value means is that everybody
in America has quality healthcare as a right, and we do it in a
cost effective way.
What is really significant is that we take that burden off
of the backs of small business people and, by the way, millions
of employees, Mr. Chairman, who stay at their jobs, not because
they really enjoy their jobs, but who stay at their jobs
because that job may provide good health insurance for them and
their kids. That is not a good way to grow an economy. You want
people to gravitate to the kind of work which they enjoy, where
they feel passionate about it, and not stay on a job simply
because they get good healthcare.
I'm reminded that some years ago--you may have read the
article--some fellow, I think, in his 50s, who rejoined the
military--had been in the military and was out--rejoined.
Somebody said, ``Well, why are you going back to the military
at the age of 50 or something?'' He said, ``Well, my wife has
breast cancer. That's the only way that I can get treatment for
her.''
That really should not be the kind of healthcare system
that we have. I think the best thing that we can do for small
and medium-sized businesses is take the burden of an enormously
expensive and complicated system off of their backs, allow them
to go out and do their businesses, whether it's selling shoes
or whatever it is, and focus on that business rather than
getting mired down in the complexities and the cost of health
insurance.
That is why I very strongly believe that the United States
should join every other major industrialized country with a
national healthcare program. In my view, it should be a
Medicare for all, a single payer system.
With that, Mr. Chairman, I thank you very much for holding
this hearing.
Senator Enzi. Thank you.
As I promised, now we'll go to our guests at this
roundtable, and we'll just go from left to right. You may make
a few comments, and if somebody wants to comment on the
comments, stand your card up, and we can do that. Hopefully,
we'll have about 3 to 5 minutes from each of you first, and
then get into a discussion.
Another thing that happens with a roundtable, and
particularly ones we hold on a Monday, is that a lot of the
people will have additional questions based on the testimony
that you provided and also things that their staff people will
report to them based on what happens here today. I'm hoping
that you'll be willing to answer those questions, too, to
provide us with additional information, which then will be
circulated to all the members of the committee. Again, thank
you for being here.
Mr. Harte.
STATEMENT OF THOMAS M. HARTE, OWNER, LANDMARK BENEFITS,
HAMPSTEAD, NH
Mr. Harte. Senator Enzi, Senator Sanders, members of the
committee, thank you so much for the opportunity to be here
today. I look at this as a unique privilege for myself, my
company, the professionals all over the country, in having an
opportunity to talk about the challenges that we have in health
insurance across the country.
What's interesting with Senator Sanders' comments is I
share his frustration. I share your frustration, Senator Enzi.
We've met before. We've talked about these challenges. The fact
is that small employers across the country are paying premiums
that are way too high. It's a reflection on the cost of
healthcare.
People always are going after--and, quite frankly,
healthcare reform went after health insurance as the issue.
When you really think about it, if you think about medical loss
ratio as one easy example, if 80 percent to 85 percent of our
premium dollars are going to the cost of healthcare, shouldn't
our conversations be really more about healthcare, so we treat
the cause, not the symptom?
Senator Enzi, I represent about 100,000 agents and brokers
across the country. I also represent 25 individuals who I
insure back home in small businesses, like mom and pop stores,
colleges, healthcare, local stores. We do it every single day.
I've been in this business for 25 years. I've heard all the
stories. I've seen people canceled for health insurance. I've
seen people subject to preexisting conditions. The market is
not perfect.
What I hope I can share with you today and members of the
committee and my colleagues with the opportunity here today is
what are the real challenges that Americans are facing with
regard to their health insurance? Why are their premiums
increasing so significantly? Why is the shop exchange not
working? It's a great idea, but it's just not working.
What is the issue with migrating groups of 51 to 100 over
into the small group marketplace, and what kind of profound
effects will that have on those businesses and their economic
viability? Senator Sanders is right that we are at an
international disadvantage when it comes to the cost of our
healthcare.
That's really what I want the conversation to start going
toward, so that when you look at competition in the United
States of America, there's competition with health insurance
companies, but there's very little competition among
healthcare.
What I want to do and, hopefully, convey to you today is to
think about--well, look at the State of New Hampshire. In the
State of New Hampshire, a CT scan of your head from the least
expensive facility to the most expensive facility is 446
percent different. The consumer doesn't know that. We need to
fix that problem so that we can reduce the long-term cost of
healthcare.
Again, I sincerely appreciate the opportunity to be here
today, and I look forward to your questions, Senator Enzi.
[The prepared statement of Mr. Harte follows:]
Prepared Statement of Thomas M. Harte
Good afternoon. My name is Tom Harte and I am the president of
Landmark Benefits Inc.; located in Hampstead, NH. I started my small
business in 1997 and it has become one of the largest independent
employee benefit companies in New Hampshire. Today, my company provides
services to over 300 corporate clients and the majority of them are
small to mid-sized business owners. My primary goal for my clients is
to provide innovative solutions that emphasize both quality and
healthcare cost containment.
I am proud to be here today on behalf of my professional
association, the National Association of Health Underwriters (NAHU),
which represents approximately 100,000 health insurance agents,
brokers, general agents, consultants and other employee benefit
specialists nationally. Just last week, I completed 6 years of service
as a member of our national Board of Trustees, including serving as the
NAHU's national president for 2013-14. As an association member engaged
on the national level since 1996, I know thousands of brokers from all
over the United States who serve small businesses with the health
insurance challenges. Not only did I consult with my own clients about
their most critical challenges and opportunities with small group
coverage that they have asked me to communicate at today's Roundtable,
but I also reached out to my colleagues nationwide so that I could
share their message today.
As requested, I have focused my remarks on three topics of greatest
interest to the subcommittee:
(1) Status of the small group health insurance market today,
(2) Tools, resources, and options available to small employers, and
(3) What is working and not working for small employers, and the
policy ideas my NAHU colleagues and I have that could improve the small
group health insurance market for consumers.
It is my and NAHU's hope that now, 5 years into the implementation
of the Patient Protection and Affordable Care Act (PPACA), that
Congress and President Obama will come together with bipartisan
solutions to improve the outcomes of ACA and resolve many of the
unintended consequences that are making coverage more expensive and
creating burdens for health insurance consumers.
The Status of Today's Health Insurance Marketplace for Small
Business Owners and Their Employees. As a benefit broker from southern
New Hampshire, virtually all of my clients and my professional
experience are within New England. However, thanks to my resources from
NAHU and my colleagues from across the country, I hope I can
effectively communicate the options small business owners in other
States now have available.
Currently the small employer marketplace is defined as employers
with between 1 to 50 ``eligible'' employees for coverage. Every
employer is different and, of course, many of my clients offer very
different benefit options. However, my clients in the small employer
market always purchase fully insured coverage and, in New Hampshire, we
are able to provide four carrier options, of which two of these plans
comprise over 95 percent of the small business market.
One option for small employers is the SHOP exchange and has four
provider options with a total of 18 plan choices (5 Bronze, 7 Silver, 5
Gold, and 1 Platinum) and many of these plans have limited networks--as
a result, many that enroll on the SHOP will be forced to lose their
doctor. Most of the small employers I represent purchase ``silver level
plans'' for their employees and have an employer contribution of
between 50 percent and 80 percent of the employee and dependent
premium. In New Hampshire, our typical health plan design provides a
$3,000 deductible with office co-pays of $25 for primary care and $50
for specialist and a prescription benefit of varying out-of-pocket
expense depending on the tier (generic, preferred brand, and brand
name).
For the types of plans that I described, the total monthly premium
for our clients will vary considerably. In recent health plan renewals,
our small employer clients have been faced with renewals of as high as
46.60 percent with monthly premiums for a single employee as high as
$726 and $2,168 for a family.
----------------------------------------------------------------------------------------------------------------
Rate Adj.
Client Location Enrolled Deductible Renewal Single Renewal Family [In percent]
----------------------------------------------------------------------------------------------------------------
Merrimack, NH (9.1)............ 51 $3,000 to $4,000. $601 to $688 $1,835 to $2,099. 23.32
(tiered).
Wrentham, MA (7.1)............. 8 $500............. $760............. $2,168........... 7.95
Salem, NH (7.1)................ 5 $2,000........... $297 to $573 none............. 3.46
(list bill).
Lawrence, MA (7.1)............. 36 $1,500........... $550............. $1,569........... 12.45
Berwick, ME (8.1).............. 3 $2,500........... $931............. $2,795........... 21.66
Bedford, NH (6.1).............. 29 $4,000........... $778............. $2,296........... 46.60
Derry, NH (6.1)................ 38 $3,000........... $585............. $1,781........... 10.84
Chelsea, MA (5.1).............. 2 $2,000........... $639 to $726..... $1,823 to $2,070. 11.92
Derry, NH (6.1)................ 81 $4,000........... $540............. $1,756........... 19.50
----------------------------------------------------------------------------------------------------------------
An unintended consequence of the ACA, with exception of certain
State statutes (e.g., Massachusetts) or the allowed ``Grandmother''
transaction, which varies by State, is that carriers are often not able
to present small employers with a ``composite rate'' for health plan
premiums. As a result, the small employer now has to adjust for the
fact that every single employee and dependent has a separate and
varying monthly health insurance coverage premium based on their age.
Additionally, small employers are now challenged with economic
impact with the hiring of new employees and the significant variance of
health insurance premiums of one employee versus another. By example,
if my company elected to have a ``NON-Grandmothered'' plan for our
health plan, the rate differential for one employee to another would be
as high as a 300 percent and thousands of dollars in additional
expense.
------------------------------------------------------------------------
Increase
Single, Age 25 Single, Age Annual (In
60 Difference percent)
------------------------------------------------------------------------
$385.57........................... $1,046.44 $7,930.44 273
------------------------------------------------------------------------
------------------------------------------------------------------------
Family, Age Increase
Family, Age 30, 30, 6, and 4 55, 24, and Annual (In
23 Difference percent)
------------------------------------------------------------------------
$1,364.92......................... $2,490.75 $24,768.26 183
------------------------------------------------------------------------
While the pricing of coverage varies significantly by State, or
even within geographic areas of particular States, my NAHU colleagues
indicate that the plan design options and available carrier choices are
becoming more and more limited. State-by-State pricing varies not only
due to medical care cost variations by State and region but also
because health reform implementation has varied by State. Some States
still allow small groups to maintain plans that do not include all of
the ACA reforms and related costs via ``grandmothered'' plans. Other
States have essentially required small employers to drop the coverage
they had before and purchase plans that include all of the ACA-related
changes and their associated costs by phasing out or never allowing
``grandmothering.'' When employers in the States with widespread
``grandmothering'' are eventually forced to shift to post-ACA plan
designs, then their rate increases will be significant.
The marketplace I just described is the small group market as it
exists right now. Today, employers with more than 51 employees have
significantly different coverage options available to them as they are
considered ``large groups'' for health coverage purposes. These
employers are not bound by the age rating or composite rating
restrictions we see in today's small group market and their benefit
design options and associated price points are much more flexible than
in the small group market. Some will elect to self-fund, that is to pay
their own claims, but most prefer the security of a fully insured
health plan. These employers also have more benefit from the
implementation of meaningful wellness programs and the incorporation of
innovative and cost-saving benefit designs. Although the rates vary
widely for employers in this market, those employers that have a
deliberate focus on having an impact on the health plan utilization
will generally have lower premiums compared to employers that do not.
As the employee benefit broker for these companies; we have deployed
nutrition, exercise, and health challenge programs that have allowed
for the sustainability of premiums for many corporations. With a
migration to the small group market, the benefit these employers
receive today with reduced premiums will be lost.
My colleagues and I are very concerned about the planned expansion
of the small group market in 2016 to employers with 100 employees or
less. We anticipate this expansion will result in clients of 51 to 100
employees receiving significant premium increases in 2016. Furthermore,
these clients will not be able to keep the plan OR the plan options
they have today and, in some cases, their current health plan may not
serve the small group market. They will also have to adapt their plans
to the ``metal plan'' design options, which means that their covered
services may change and be forced to either reduce benefit offerings or
increase them to meet the actuarial values tied to the metal plans.
For example, an employer with a plan actuarial value today of 76
percent would have to either reduce coverage to a 70 percent silver
plan or raise it to an 80 percent gold in 2016. As you would expect,
there are coverage and cost consequences to either option. These
employers will have to follow the age rating requirements and will lose
the ability to receive a true composite rate in most circumstances, so
their pricing for employee premium cost-sharing will need to change
dramatically. Furthermore, by forcing these employers into the small
group market they will lose some of their flexibility to create
meaningful wellness, cost-containment, and quality components within
their plan offerings. Finally, this employer segment will have to
follow the employer mandate in 2016, meaning that these smaller but
vibrant companies that drive local economies will be the only group of
employers subject to both the employer responsibility and reporting
requirements and all of the small group reform requirements and
associated costs. These are significant changes in a market that is
exceptionally price sensitive and least able to effectively manage the
new compliance requirements.
tools and options for small employers
The most important tool any employer has in the management of their
health plan is a health insurance agent or broker. That's why,
nationwide, more than 90 percent of small businesses rely on brokers
and, according to a Society for Human Resources Management (SHRM), 78
percent look to their broker as their No. 1 source of health reform
information. Agents and brokers support their small business clients in
choosing and making the most of coverage options by providing
assistance, trusted advice and service. Some of the services that I and
my colleagues provide for our small employer clients include:
Comprehensive wellness programming to improve the health
and wellness of the employees and their dependents.
Deploy health care cost transparency tools to educate the
employees of the wide variance of cost between health care providers.
Assist employers with the management to the increased
complexity of compliance.
Manage enrollments, terminations, and COBRA process.
Negotiate renewal rates and identify items that should be
considered by carriers when determining renewal premiums (i.e.,
turnover of personnel, addition of new hires, etc.).
Recommend healthcare financing options best suited for the
client (i.e., fully insured, self-funded, health reimbursement
arrangements, flexible spending accounts, health savings accounts).
Provide online and written communication for plan
administration.
Advise about new and pending legislation, new plan
designs, and premium changes.
Assist clients with claim issues and advocate on their
behalf.
Analyze the performance of the medical plan and identify
key areas of utilization.
Assist clients with requests to doctors and hospitals to
improve health care outcomes.
Assist employee family members with the selection of
coverage.
Meet with employers/employees to explain benefits, plan
designs, and optional coverage.
Assist the employer in selecting the appropriate plan(s)
that best meets the employer and employee objectives and goals.
Assist employers with billing issues.
Provide or assist with employee Web sites to facilitate
access to plan information.
Research and advise on financial viability, credibility,
and value of various insurance companies and plan offerings.
Employers of every size rely heavily on agents and brokers for
advice and assistance. The health insurance marketplace has become so
complicated with changes in legislation, plan design and benefit
offerings that my colleagues have become an invaluable resource.
Whether the large pizza chain in Boston, the colleges we represent in
New Hampshire, the manufacturing facility in Nashua, or the
construction company in Maine--employers don't have the resources or
expertise to take this task on by themselves.
small group market policy recommendations
We all have a stake in a having a functioning, viable health
insurance marketplace for small employers. While the ACA has brought
many changes and market resources to consumers and employers, I am
concerned about policies threatening the small group's viability that
could lead to its erosion. The membership of the National Association
of Health Underwriters feel that the following policy changes would
have a significant impact on improving the cost and coverage options
available today for our Nation's small employers and their employees:
Passage of the bipartisan S. 1661 to remove agent and
broker commissions from the medical loss ratio calculation in the small
and individual health insurance markets, to ensure small business
access to agent and broker services and to economically help the
hundreds of thousands of agent small business owners nationwide.
Restoration of a state's ability to set its small group
market size at 1-50 employees.
Efforts to reduce the new tax burdens on small employers
and their employees, including the new national health insurance
premium tax that adds more $500 a year to the average premium for a
small group employee and only affects the fully insured marketplace and
the coming excise tax.
A repeal of the employer mandate, or failing that,
establishing the eligibility threshold at 101 or more employees and a
simplification of the eligibility criteria so that employers cannot be
subject to both the small group market reforms and costs and the
mandate requirement at the same time.
Allowing employers to set the definition of a full-time
employee as one that works 40 or more hours a week for health coverage
purposes.
Legislation which allows States to increase the law's age
rating bands from the current 3 to 1 spread to bands that more closely
resembles the natural breakdown of age and meet the needs of a
particular state. If a state does not set its own bands, the default
should be 5 to 1.
Restoration of the ability of health insurance carriers to
issue employers a composite rate for employee coverage, just as they
did prior to the ACA
Preservation of the law's risk-adjustment mechanisms
(often referred to as ``The Three Rs'') since they are crucial to
preserving long-term private insurance market stability.
Reviewing the essential benefit and other coverage
requirements to ensure that they allow individuals and employers the
opportunity to buy affordable coverage.
Improvements to the SHOP exchange and the small business
tax credit to make SHOP a more viable coverage option for small
employers and to provide more small businesses with free-market
purchasing assistance.
In closing, I would like to thank Chairman Enzi, Ranking Member
Sanders and all of the members of the subcommittee for the amazing
opportunity to share information about the opportunities and challenges
small business owners like me and my clients are having in today's
health insurance marketplace. If you have any questions or need more
information, please do not hesitate to contact me at either (603) 329-
4535 or [email protected].
Senator Enzi. Thank you.
Mr. Scott.
STATEMENT OF JAMES G. SCOTT, OWNER, APPLIED POLICY, ALEXANDRIA,
VA
Mr. Scott. Senator Enzi, Ranking Member Sanders, and
members of the committee, thanks for the opportunity to
participate in today's roundtable discussion. Today, I'm here
in my capacity as a small business owner, but I also work on
health policy.
As you mentioned, Senator, in 2009, I founded Applied
Policy to help healthcare organizations navigate the Centers
for Medicare and Medicaid Services. When I started Applied
Policy, my biggest worry was whether I would generate enough
income to feed my family. My second biggest worry was how I
would find health insurance for myself and my family, because I
had always relied on my employer to provide that coverage.
As a health policy consulting firm, I believe we need to
walk the walk. We work to encourage healthy lifestyles among
our employees, and we also want to provide good health
insurance. As Applied Policy, we have to make sure that all our
employees have access to high-quality health insurance, and
that was the first benefit we added.
To do this as a small business, like you mentioned, you
have to wash the windows and update your website and all that
kind of thing nowadays. I needed outside help, so I relied on
our insurance broker to help us compare a number of options and
select a range of options for our employees.
We decided that, as a health policy consulting firm, I
should ensure that everybody that worked at Applied Policy had
health insurance. We paid the full cost of the HMO option so
everybody had access to a zero premium plan, and we allowed
them to provide that premium subsidy toward other options that
we provided.
By 2014, there were seven of us, and six of us have chosen
health insurance options offered by Applied Policy, and one
retains their spouse's coverage. That year, we received two
checks from our carrier because of the medical loss ratio. One
was for 36 cents, and the other was for 12 cents. Those refund
checks were accompanied by a stern letter directing us to
distribute these funds equitably among our employees. I gave
them each a dime.
In 2014, when it came time for us to renew our plans for
2015, I told our broker that we were happy with what we had. We
just wanted to renew. They said that now our plans were
designated as platinum plans, and the premium had increased by
40 percent. The HMO option that we had based our subsidy
calculation on increased by 48 percent. The year before that,
we had also seen double digit increases.
Our desire to give a premium subsidy to each plan enrollee
has been affected by the new member-level billing-premium
calculation requirements. Instead of being able to have an
office-wide meeting and say,
``Look, these are our health insurance policy
options. Here's our contribution, and here's the
options you have to choose from,''
our broker has to have seven individual conversations because
of the age rating, and the cost of plans varies widely between
the younger and older employees.
Generally, we don't discuss the ages of staff at work, and
I believe compensation should be tied to the work the employee
does and not how old they are. However, this new system
requires us to tie compensation to age, at least as far as our
health insurance benefits go.
We realigned our plan options, and we took advantage of
some of the new wellness options, and we continue to provide
employees with a zero dollar plan. I've changed my family
dental and vision coverage to coverage for my wife and I,
because now, pediatric vision and dental is embedded in our
medical plan. We continue to be concerned about what levels of
increase we are going to see next year and how we can manage
the unpredictable changes in benefits and rates from year to
year.
With those comments, I'd be happy to answer any questions
you have.
[The prepared statement of Mr. Scott follows:]
Prepared Statement of James G. Scott
Chairman Enzi, Ranking Member Sanders and members of the committee:
Thank you for the opportunity to participate in this roundtable
discussion regarding small business health care challenges and
opportunities.
I am here today in my capacity as a small business owner, but I
also work on health policy. In 2009, I founded Applied Policy to help
health care companies, including providers, manufacturers, suppliers,
insurers, trade associations and specialty societies navigate the
Centers for Medicare & Medicaid Services. We are not lobbyists, rather,
we take our clients concerns into account, explain the opportunities
and threats posed by new legislation and current and proposed changes
to regulations that apply to those concerns. We then work with them to
find solutions that not only benefit the client, but also foster a
government that serves the people as intended.
When I started Applied Policy, my biggest worry was whether it
would generate enough income to feed my family. My second biggest worry
was how I would find health insurance for my family because I had
always relied on my employer to provide that coverage.
When I first hung out my shingle, I had to buy health insurance for
myself and family and go through the underwriting process. Fortunately,
I worked with an insurance broker who helped us navigate the process
and we were able to secure good coverage. After completing that
process, I realized why that process caused so much angst among others
and how we were fortunate to get a good result.
As I began to hire staff, I had to consider not only what salaries
I would offer, but also what benefits highly qualified staff would
expect. Moreover, working as a health policy consulting firm, I felt
that Applied Policy should make sure all its employees had access to
good health insurance. The first benefit I tried to add was health
insurance.
The first person I hired was in 2010 and the Affordable Care Act
had just passed and allowed all individuals under age 26 to remain on
their parents' health insurance plan. The first person I hired was
under age 26 and chose to stay on her parents' insurance. The
implications of this were that I did not yet meet the ``group''
criteria and had to maintain my individual insurance at underwritten
rates until I hired an employee willing to sign up for a group health
insurance policy.
Then, I hired my second employee. Our insurance broker helped me
compare a number of options and select three plan options: an HMO; a
point-of-service (POS) plan; and a PPO. Applied Policy decided to pay a
larger subsidy than the law required so its employees could have access
to a $0 premium plan. Therefore, I paid the full cost of individual
coverage for the HMO and allowed the employee to elect to have
additional funds withheld from their paycheck to upgrade to the POS or
PPO options. We also provided optional vision and dental insurance.
As we added more staff, Applied Policy continued its policy to
provide its employees with access to a $0 plan. By 2014, there were
seven of us, with five electing one of our plans and the other two
choosing to remain on other health care insurance through their spouse
or parents.
That year, Applied Policy received two checks from our carrier
because of the Medical Loss Ratio calculation. One was for 36 cents and
the other was for 12 cents. Stern instructions accompanied the checks
stating the law required Applied Policy to share the funds with our
employees. Therefore, I gave each of the plan enrollees a dime.
In July 2014, when it came time for us to renew our plans for 2015,
I told our broker that we would like to keep the same plans as we
currently had. She informed us that the plans had been recently
designated as ``Platinum Plans'' and the insurance premiums increased
by 40 percent. The HMO option that we had based our subsidy calculation
on increased by 48 percent. The year before, we had also seen double-
digit increases in our rates.
Our desire to give a premium subsidy to each plan enrollee
sufficient to enroll in a $0 premium plan was affected by the new age-
rating requirements. Instead of being able to have an office-wide
meeting, explain the health insurance options, show the 2015 rates and
Applied Policy's contribution toward them, our broker had to have seven
individual conversations. This is because the cost of the plans varies
widely between young and older subscribers, and results in a greater
premium subsidy the older the employee is. We do not discuss the ages
of our staff at work and I believe compensation should be tied to the
work the employee does, not how old they are. However, the age-rating
system forced us to tie compensation to age, at least for our health
insurance benefits.
We realigned our plan options, taking advantage of some of the new
wellness options, and continue to provide employees with access to a $0
premium plan, but I have changed my family vision and dental coverage
to coverage just for my wife and I, since pediatric vision and dental
coverage is now included in our health insurance plan. I have not been
able to determine whether the 40 percent increase was the result of
additional benefits being required by law, the new rating rules, an
opportunistic rate hike by the insurer, or a combination of all three.
With that as background, I would like to answer the questions you
provided to me before this roundtable:
What is the current status of the health insurance market for small
businesses, specifically plan options and costs in the small group
market?
The current status is uncertain. Small employers are receiving
mixed messages regarding what a ``good'' employer should do. Am I
expected to continue to make employer-sponsored coverage available to
its employees, should I use the SHOP exchange to make coverage
available to their employees, individuals should obtain their own
coverage through the individual Exchanges, or should I be able to do
whatever I feel is best for my business?
In addition, the changes in rates are unpredictable from year-to-
year, and one major aspect of running a business is to have recurring
expenses like health insurance premiums be predictable.
I get the feeling that the rules are being developed with the
assumption that small businesses do not want to provide health
insurance benefits to their employees or are aiming toward the minimum
requirements.
What tools and options are available and useful for small employers
to offer some assistance to their employees?
Our insurance broker has been an invaluable resource. In addition
to helping us renew our plans and analyze options that offer us a
robust provider network, a good benefit package and the best value in
terms of premiums and cost-sharing, she helps us identify and comply
with legal requirements like the section 125 plan, helps us welcome on-
board new employees, and answers questions about providers, benefits
and cost-sharing for my employees.
What has worked, what hasn't worked and what policy recommendations
do you have for the committee?
I encourage the committee to recognize in its policymaking that
small businesses are all different. Some want to provide health
insurance to their employees that exceeds Federal standards and others
will take a different approach.
My employees want access to providers, a good benefit package and
fair premiums and cost-sharing. As an employer, I want to provide that
to them. More could be done to help employers and employees compare the
total costs of coverage rather than choose the lowest premium plan and
be surprised by the high out-of-pocket expenses when they visit the
doctor.
Please keep in mind that our employees want stable and predictable
coverage so they can keep their doctor from year-to-year, become
comfortable with benefits and the cost-sharing obligations, and have
confidence that if they have to go to the hospital, their insurance
coverage will help pay the costs. I want my employees to have that kind
of coverage so that they can focus on work, get healthcare services
when they need to, and not worry about their health insurance coverage.
Thank you again for the opportunity to participate in this
roundtable. I would be happy to answer your questions.
Senator Enzi. Thank you.
Mr. Conklin.
STATEMENT OF J. KELLY CONKLIN, OWNER, FOLEY WAITE LLC,
KENILWORTH, NJ
Mr. Conklin. Thank you, Senator Enzi, and I too appreciate
the opportunity to be heard here today. I'm here representing
not only my small business but my colleagues in the Main Street
Alliance, both the national organization and the New Jersey
organization.
Let me start by saying that I, with the utmost affirmation,
support the Affordable Care Act. I do that because I think it
provides fundamental cornerstones for establishing a fair and
reasonable standard for healthcare insurance, and through that
establishes the doorway for access to health insurance. Without
those standards--and I'll probably reiterate this several times
today--it's impossible to know, from the perspective of a small
business owner, what you're buying.
I've said before that in order to make an informed choice
in purchasing health insurance, you need to be an actuarial to
understand what the real risks are. You need to be a doctor to
understand what the formularies provide. It wouldn't be bad to
be an attorney with a background in business contract law and,
specifically, health. To top it off, it might not be a bad idea
to be Nostradamus so you could predict the future and actually
know what you needed to buy.
To imply that I, as a cabinet maker from New Jersey, can
make an informed decision for myself and my employees about
what health insurance is best for them is a stretch.
Consequently, what it means to me is that--I'm lucky because I
live in New Jersey and work in New Jersey, and we had
protections built into New Jersey insurance law. Things like
essential health benefits were established before the
Affordable Care Act.
Our experience has been as the Affordable Care Act came
into place, aside from the significant adjustment that occurred
with age banding--and I have several older employees, and that
was kind of a shock--we've experienced between 10 percent and
15 percent increases in our premiums. A reasonable person and I
think a sound businessman would say, ``Wow, that's
significant,'' and I wouldn't argue with them. We've absorbed
increases in the past of 38 percent and 40 percent.
One year when we tried to maintain our plan, we got a 138
percent increase from Aetna insurance. By the way, we're back
on Aetna, and Aetna, this year, provided a plan--again, I can't
speak specifically to the quality per se of the plan, but we
were able to, with our insurance agent, buy a plan that was 2
percent less in premium costs and actually reduced deductibles
by $500.
It came at a cost--$6,000 a year total exposure because of
coinsurance for an individual and $12,000 a year as a potential
exposure for families. That doesn't sound like a great plan to
me if you're unlucky. It's the plan that we can afford, and
it's the plan that provides a window or a doorway into care
that might, as Senator Sanders enumerated earlier, avoid a
catastrophic event for a family.
Having said that, I'm going to skip right to the bottom
line and say that access to care, in my view and over my years
of experience in purchasing healthcare and paying attention to
this issue, is the key. We have to ask ourselves today and
every day going forward what it is we're trying to accomplish.
Are we actually trying to accomplish affordable, reliable,
accessible healthcare for the American people? Or is there an
alternative at work here, an alternative motivation that we
don't understand?
Personally, I think at some point about 30 years ago, we
made a decision to monetize healthcare. When we did that, we
changed the entire relationship between doctors and patients,
insurance companies, premium buyers, the whole deal, and we did
it without really understanding long-term what the consequences
are.
Now we know what the consequences are. The consequences are
a very high cost for what is an inefficient--I won't even use
the word, system--approach to delivering healthcare to the
American people that results in poor quality outcomes and
higher costs. Until we come up with a way--I don't know whether
I agree with Senator Sanders entirely that it's a single payer
system.
Until we all agree that every American should have a card
in their pocketbook or wallet that gives them access to a
physician when they need a physician wherever they need a
physician, my employees and I are going to spend too much for
healthcare.
[The prepared statement of Mr. Conklin follows:]
Prepared Statement of J. Kelly Conklin
Chairman Enzi and Senator Sanders, thank you for the opportunity to
participate in today's roundtable to discuss the experience of small
business owners purchasing coverage in the small business health
insurance market. My colleagues and I at the Main Street Alliance, a
national network of small business owners, proudly supported the
passage of the Affordable Care Act. Today, I am eager not only to
discuss how the law currently works for small business owners, but also
to discuss how the law should be developed to ensure that it works for
all small business owners.
What is the current status of the health insurance market for small
businesses; specifically plan options and costs in the small group
market?
Let me start by reiterating that I am a strong supporter of the
Affordable Care Act and believe that the ACA is an important and
crucial step forward for millions of Americans in gaining access to
affordable healthcare coverage. Today, I'm here to discuss the ways in
which I believe that the ACA should be improved to strengthen the
program for small business owners.
Small business owners' experience in the small business market
varies from State to State. From our perspective as a New Jersey
company, we purchase health insurance in the small group market as we
always have, through an agent. There is little appreciable difference
between now and before the ACA in terms of options. There are many
plans available to choose from and there is the same confusing, arcane
language in the policy documents and in how the various plans are
presented. That makes meaningful comparison among the plans almost
impossible beyond the most basic considerations: premium cost, co-pays,
deductibles and maximum annual out-of-pocket costs. As a small company
with tight margins the first consideration is always premium cost.
Premium Increases. Premium increases over the previous 2 renewals,
2013/2014 have been in the neighborhood of 10 to 15 percent. That said
this year's is down about 2 percent and we reduced deductibles for the
individual to 2,000 from 2,500. That did come with an annual increase
in total maximum out-of-pocket from 5,000 to 6,000 per individual and
12,000 per family.
Age Banding. There was an initial ``shock'' when the new price
schedules were implemented using age as the determinant factor of
premium rates. In that initial adjustment we had the biggest rate
increase in some time as a result of our older population of employees
participating in our plan. As I recollect that was around 18 percent.
Weak Rate Review. New Jersey does not have a strong rate review
process nor does the Federal exchange that serves New Jersey. It would
help consumers like me if a strong rate review policy were set in
place. Strong rate review has helped dampen down premium increases
elsewhere. The ACA review process is weak. It only requires insurers to
file rates if they exceed 10 percent and then it has no enforcement. A
rate review where the exchange could deny rates before they are used
would be much more useful.
Active Purchasing. Furthermore, the exchanges are not what we call
``active purchasers.'' They do not negotiate price and quality on
behalf of the consumers. All exchanges should be required to do this.
Premium Aggregation. Some exchanges around the country are
abandoning premium aggregation. This is an important tool for small
businesses because it permits us to send premium dollars to the
exchange and they pay the insurers. This eases the administrative
burden. It appears to be a technology problem in some exchanges and it
needs resources to fix it.
Increase Competition. One other thing would help with cost--very
robust competition. I talk to my fellow small business owners around
the country and discover that many of the SHOP exchanges have very
little competition. Insurance companies that offer in the individual
market should be required to offer in the SHOP exchanges also.
What tools and options are available and useful for small employers
to offer some assistance to their employees?
This is a difficult question to address. There is more information
than ever available to anybody with enough time to investigate the
available plans in their respective areas. In New Jersey with its high
density, well-off population, the market is relatively rich affording
options on the individual market that did not exist prior to the ACA
through the exchange. Choosing a plan can be a daunting experience,
filled with uncertainty and anxiety. Thankfully the comprehensive
consumer protections I mentioned previously are in place to reduce the
actual risk to individual consumers.
Tax Credits. It would help enormously if the small business tax
credits were available to more small businesses. Currently only those
with under 25 employees qualify. This should be expanded to at least
50. The salary limitations also should be increased. Small businesses
want their employees insured and better credits would be a great help.
Cost of Older Dependents. We recently had our oldest employee move
to Medicare. His younger wife could no longer be covered under our
plan. In the exchange they were able to purchase a slightly higher
quality plan, lower deductible, lower co-pays, for about $50 more per
month than the coverage she had under our plan. Medicare with part D
and the additional supplements making his coverage complete, saved us
enough in premium cost to raise his compensation to cover his
additional out-of-pocket expenses and his wife's coverage, while saving
us about $200 per month.
What has worked, what hasn't worked, and what policy
recommendations do you have for the committee?
From my perspective, the ACA has been an incredibly important
program for individual consumers. It's time to take the next step and
ensure that the ACA also works for small business owners and their
employees.
In terms of next steps for improving the ACA, there are a number of
things that might be done. Repeal is not one of them. Nor is a piece-
by-piece alteration of the law that will have the same effect as
repeal. Congress must act to restore faith that changes to the ACA come
by way of improving access to care and by means resulting in affordable
quality health care, not political victory laps.
Let's start with what is working. The consumer protection and
community rating provisions of the ACA have been a success and must be
preserved.
Consumer Protections. New Jersey's robust consumer protections
prior to ACA, including EHB's and no exclusion for pre-existing
conditions, made cost increases in our market tolerable. The uniform
consumer protection standards contained in the ACA for health insurers,
along the lines of New Jersey's, is a critical piece of the ACA that
cannot be tampered with. No lifetime limits and no exclusions for pre-
existing conditions are cornerstones of increased access and financial
security and should not be altered as well. These features along with
the MLR have had the expected effect of containing both premium
increases and cost shifting by providers. This along with other
features of the ACA is working to decelerate the rate of health care
cost increases.
Community Rating. Another critically important piece of the ACA
that must be preserved is Community Rating. Community rating is
enormously important to small businesses. If a little business has a
plan and an employee gets cancer or renal disease, we need to be
protected from disaster. We also need to be protected from the simple
process of aging. The community rating system should be improved by
placing stricter limits on age banding.
Improvements to ACA. I also believe that there are some basic
policy measures that would dramatically improve the ACA for small
business owners.
Tax Credits. As mentioned previously, Congress should expand the
tax credits available to small business owners so that businesses with
larger workforces or higher paid workers have access to those
incentives. Currently these incentives are only available to business
owners who employ 25 or fewer employees. This should be expanded to at
least 50 employees. The salary limitations should be increased. Small
business owners want their employees covered and better tax credits
would help.
Require SHOP Participation. Insurers who participate in the
individual market in a given State should also be required to
participate in the SHOP exchange in that State. This would ensure much
needed competition in the exchanges.
Rate Review. Congress and the States should implement stronger rate
review, including ``prior approval'' policies.
Technology. More investment should be directed toward technological
improvement in the SHOP exchange market places. This should be done in
a way that eases the administrative burden for participating small
businesses.
Active Purchasing. Congress should require that the exchanges
become active purchasers who negotiate rates and quality for their
customers. This is an important bargaining measure that ensures better
consumer costs.
Medicaid Expansion. I urge you to do everything in your power to
foster the expansion of Medicaid. This program undergirds the market by
assuring that cost shifting is reduced and many at-risk populations are
covered. Our businesses draw their customers from the neighborhoods
that surround them. If there are huge coverage gaps in those
neighborhoods, we lose business. Not having Medicaid expanded is
costing us all.
The ACA is the first major step toward providing universal access
to health care, an as yet unmet goal of the reform effort. As long as
access is determined by one's ability to pay, whether at the point of
service or in the purchase of insurance, our health care costs will
continue to climb while quality and availability of care continues to
decline. Voluntary charity care remains an inadequate alternative to
mainstream access and that shortfall continues to contribute
substantially to cost shifting and deferred care, leading to expensive
and poor outcomes. We can do better.
I don't live in a Magical Market Place where innovation and quality
are always rewarded and fraud, abuse, incompetence and inefficiency are
always weeded out. In the long run, the best way to ensure that the
American healthcare system works for small businesses is to take the
employer out of the health insurance provision business all together.
Not by cutting people off, but by ensuring that everyone in America has
access to quality care. Until every American has a card in their purse
or wallet that guarantees access to a doctor--any doctor, anywhere,
until emergency rooms only serve emergency patients and not emergency
patients and the uninsured, I and my employees will pay too much for
too little.
Our goal must be a comprehensive, all-inclusive health care
delivery system in the United States. We should get on with it.
Thank you, Chairman Enzi and Senator Sanders. It has been a
pleasure speaking with you today.
Senator Enzi. Thank you.
Ms. Corlette.
STATEMENT OF SABRINA CORLETTE, J.D., SENIOR RESEARCH FELLOW AND
PROJECT DIRECTOR, GEORGETOWN UNIVERSITY, WASHINGTON, DC
Ms. Corlette. Thank you, Chairman Enzi. It's a real honor
to be here today. I'm going to be very, very brief, because I
think the questions that you provided us in advance are really
just right to allow us to really dive into the details of this
issue. I'll save the substance of my comments for those.
I would just like to say, I want to thank you for having
this roundtable. I think the moment is a timely one. It may be
hard for some of us to believe, but we're a little bit more
than 5 years after enactment of the Affordable Care Act. It's a
great moment to sort of pause and sort of do a temperature
check to see where is the small group market.
We at the Center on Health Insurance Reforms have been
doing some research looking at changes in the small group
market in the wake of the Affordable Care Act, and the
incentives for many small businesses have changed. I think
policymakers and those that are concerned about employees and
employers' ability to recruit and retain a healthy and
productive workforce need to assess where we are and where
we're going. I look forward to the discussion.
Thank you.
[The prepared statement of Ms. Corlette follows:]
Prepared Statement of Sabrina Corlette, J.D.
Chairman Enzi, Ranking Member Sanders, thank you for the
opportunity to participate in today's roundtable discussion of issues
confronting the small business health insurance market. The three
questions you've asked us to discuss today can help you and your
colleagues hone in on policies to help support small businesses'
efforts to recruit and retain healthy and productive workers at an
affordable cost.
What is the current status of the health insurance market for small
businesses, specifically plan options and costs in the small group
market?
For a number of years now, employer-sponsored insurance has been
eroding, and the decline has been more pronounced among small
businesses. Small business owners have long struggled with high and
often volatile premium costs relative to large businesses, a lack of
market power when negotiating premiums, and high administrative costs
associated with covering a small number of workers. In addition,
minimum participation requirements used by insurers to safeguard
against adverse selection used to mean that small employers often could
offer only one plan and had to contribute a hefty portion of employees'
premiums in order to encourage enough employees to enroll in the plan.
These pressures have contributed to the steady decline in the number of
small businesses offering coverage, from 44.5 percent in 2002 to 35.2
percent in 2012, leaving their employees disproportionately more likely
to be uninsured compared to larger firms. Furthermore, even small
business workers who were fortunate enough to receive insurance have
historically had less generous coverage than their large business peers
and have faced significantly higher deductibles and lower employer
contributions for dependent coverage. Small employers have also been
less likely to offer their employees a choice of insurers or plans.\1\
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\1\ Blavin F, Garret B, Blumberg L, Buettgens M. Monitoring the
Impact of the Affordable Care Act on Small Employers: Literature
Review, October 2014 (Washington, DC). Available at http://
www.urban.org/UploadedPDF/413273-Monitoring-the-Impact-of-the-
Affordable-Care-Act-on-Employers.pdf. (Derived from Medical Expenditure
Panel Survey--Insurance Component (MEPS-IC) summary tables, AHRQ 2002-
12).
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The small group market provisions of the Patient Protection and
Affordable Care Act (ACA) were designed with the goal of making it
easier for small businesses to offer adequate and affordable coverage
to their employees. Key pillars of the strategy included changes to
insurance rules, which for example broadened risk pooling for small
businesses and ensured that minimum participation requirements do not
have to be a barrier to small firms offering coverage to their workers.
In addition, the new ``SHOP'' marketplaces offer small businesses a
range of group health plans, including the ability for employees to
choose their own plan.
What tools and options are available and useful for small employers
to offer some assistance to their employees?
In many ways, small employers have some of the most coverage
options of any other group, and their options have expanded under the
ACA. They can choose to offer coverage or not, without facing a
penalty. They can choose whether or not to enroll in the SHOP, in a
private exchange, or directly with an insurer. They can also decide
whether to offer their employees a choice of plans, and, through the
SHOP or a private exchange, set a defined contribution level.
The ACA created new options and insurance standards in order to
address some of the most glaring problems with small business coverage,
including unpredictable premium increases because of changes in an
employer group's health status, limited benefits, pre-existing
condition benefit exclusions, and high out-of-pocket costs. Consistent
with the changes effected for the individual market, the small group
insurance reforms thus included new rating rules prohibiting variation
in premiums based on health status, required minimum essential health
benefits and first-dollar coverage of approved preventive services,
ended limits or exclusions from plan benefits based on pre-existing
conditions, and capped enrollees' annual out-of-pocket liability.
In addition, insurers offering products in the small group market
are now required to set rates using a single statewide risk pool that
includes both healthy and sick enrollees across all of their small
group plans in the State. Small employers can also avoid having to meet
minimum participation and contribution thresholds if they obtain
coverage during an open enrollment period running from November to
December each year.
new options for small employers
SHOP marketplaces and tax credits
The ACA created the Small Business Health Options Program (SHOP) to
provide new, State-based exchanges, or marketplaces, where small
businesses can more easily shop for health insurance.\2\ Responding to
small business owners' concerns about their inability to give employees
a choice of health plans,\3\ SHOPs are designed to provide an
``employee choice'' option. As envisioned, instead of having to make a
``one-size-fits-all'' plan decision for their employees, the employer
sets its contribution level and lets each employee choose the plan that
best suits his or her needs.
---------------------------------------------------------------------------
\2\ 42 U.S.C. Sec. 18031(b)(1)(B) (2010).
\3\ Kingsdale J, How Small-Business Health Exchanges Can Offer
Value to Their Future Customers--And Why They Must. Health Aff
(Millwood). 2012;31(2):275-83.
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With few exceptions, the SHOPs have been slow to get off the ground
and enrollment has been low.\4\ During the first year of operation,
only a minority of States had the technical capability to offer on-line
enrollment, and fewer still prioritized the SHOP in their marketing and
outreach campaigns.\5\ In addition, mandatory implementation of
employee choice was delayed in both 2014 and 2015, resulting in uneven
rollout of this option across States. This year, 32 States are
providing some form of employee choice; the feature is expected to be
available nationwide in 2016.\6\
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\4\ U.S. Government Accountability Office, Small Business Health
Insurance Exchanges: Low Initial Enrollment Likely due to Multiple,
Evolving Factors, Nov. 2014 (Washington, DC). Available at http://
www.gao.gov/assets/670/666873.pdf.
\5\ Blumberg LJ, Rifkin S, Early 2014 Stakeholder Experiences with
Small-Business Marketplaces in Eight States, August 2014 (Washington,
DC). Available at http://www.urban.org/UploadedPDF/413204-Early-2014-
Stakeholder-Experiences-with-Small-Business-Marketplaces-in-Eight-
States.pdf.
\6\ U.S. Department of Health and Human Services, Center for
Consumer Information and Insurance Oversight, Small Business Health
Options Program (SHOP) (Washington, DC). Available at http://
www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-
Marketplaces/2015-Transition-to-Employee-Choice-.html (accessed
February 12, 2015); see also Dash SJ, Lucia KW, and Thomas A,
Implementing the Affordable Care Act: State Action to Establish SHOP
Marketplaces, March 2014 (Washington, DC). Available at http://
www.commonwealthfund.org/ /media/files/publications/issue-brief/2014/
mar/1735_dash_implementing_aca_state_
action_shop_marketplaces_rb.pdf.
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A growing number of private exchanges offer another entree into the
market, generally allowing one-stop shopping, defined contributions and
employee choice, much like the SHOPs.\7\ These exchanges may be run by
insurance carriers, insurance brokers, or in some cases by employee
benefit firms.
---------------------------------------------------------------------------
\7\ Alvarado A, Rae M, Claxton C, Levitt L, Examining Private
Exchange in the Employer-Sponsored Insurance Market, Sept. 2013, Kaiser
Family Foundation (Menlo Park, CA). Available at http://kff.org/
private-insurance/report/examining-private-exchanges-in-the-employer-
sponsored-insurance-market/.
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The ACA also included small business premium tax credits to help
make insurance more affordable for some very small employers with
moderate-income workers. These tax credits are available only to
businesses that enroll through the SHOP, and only through 2016. To
date, few small businesses have made use of these credits, likely due
to the narrow and complex eligibility requirements and relatively low
credit amounts.
Non-compliant plans
Under the ACA reforms, many small employers--and their employees--
will benefit from the new rating and benefit standards and cost-sharing
protections. Others, particularly those with younger and healthier
workers, may face premium increases as they are brought into a single
risk pool that includes older and sicker workers. Several alternative
coverage options currently enable such employers to circumvent the
single risk pool, leaving the higher risk people who remain in the pool
to face higher premiums than would otherwise have been the case and
threatening the long-term viability of the small group market.
Many small group plans are exempt from the ACA market reforms. Some
are considered ``grandfathered'' because they were in existence before
the law was passed in 2010 and have not made significant changes to
benefits.\8\ Over time, the importance of grandfathered plans is
expected to diminish as benefits and cost-sharing are inevitably
updated. Other small group plans were granted a reprieve under a
transitional rule that allows small employers and individuals to remain
on the health plans in which they were enrolled before the ACA reforms
went into effect in 2014\9\--the so-called ``grandmothered'' or
transitional plans. Not all States implemented these transitional
rules, and some required small employers to transition to ACA-compliant
plans in 2014.\10\ While comprehensive data on how many small employers
have remained on their pre-ACA plans are lacking, anecdotal evidence
suggests a good many did.\11\ In most States, these employers will be
permitted to hang onto their old plans until October 1, 2016 (for
coverage extending into 2017).\12\ If, as expected, it is mainly
employers with younger, healthier workers that are remaining in
transitional plans, the risk pool for ACA-compliant small group plans
and the SHOP exchanges is likely less healthy than it otherwise would
have been, putting upward pressure on premiums for employers on these
plans in the short term. However, as healthy groups transition off
their pre-ACA plans, the overall risk profile of the small group market
should stabilize.
---------------------------------------------------------------------------
\8\ 5 C.F.R. Sec. 147.140 (2015).
\9\ U.S. Department of Health & Human Services, Insurance Standards
Bulletin Series--Extension of Transitional Policy through October 1,
2016. Center for Consumer Information & Insurance Oversight, Mar. 5,
2014. (Washington DC). Available at http://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/Downloads/transition-to-compliant-policies-03-
06-2015.pdf.
\10\ Lucia KW, Corlette S. Update: State Decisions on the Health
Insurance Policy Cancellations Fix, Jan. 8, 2015, The Commonwealth Fund
Blog (New York, NY). Available at http://www.commonwealthfund.org/
publications/blog/2013/nov/state-decisions-on-policy-cancellations
-fix.
\11\ U.S. Government Accountability Office, Small Business Health
Insurance Exchanges: Low Initial Enrollment Likely due to Multiple,
Evolving Factors, Nov. 2014 (Washington, DC). Available at http://
www.gao.gov/assets/670/666873.pdf.
\12\ U.S. Department of Health and Human Services, Center for
Consumer Information and Insurance Oversight, Insurance Standards
Bulletin Series--Extension of Transitional Policy through October 1,
2016 (Washington, DC). Available at http://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/Downloads/transition-to-compliant-policies-03-
06-2015.pdf.
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Self-funding
Small employers with healthy groups may also find it tempting to
self-fund coverage, meaning that they bear the risk of employees'
medical claims. As with the non-compliant plans, such a move exempts
them from many of the ACA's rating and benefit reforms and could help
lower their costs, at least initially. However, self-funding can also
pose significant financial risks for employers and is usually
accompanied by a reinsurance or stop-loss policy to cover unexpectedly
large claims. Increasingly, these stop-loss policies are incorporating
very low thresholds (or attachment points) above which claims are
covered; self-funding employers purchasing these policies can mimic
traditional health insurance while avoiding health insurance
regulations. Researchers have projected that use of such low-risk stop-
loss policies can lead to large premium increases for employers
remaining in the regulated small group market,\13\ undermining
stability. A few States have moved forward to protect their small group
market from the risks of self-funding, primarily through the regulation
of very low-attachment point stop-loss coverage.
---------------------------------------------------------------------------
\13\ Buettgens M and Blumberg LJ, Small Firm Self-Insurance Under
the Affordable Care Act, November 2012 (Washington, DC). Available at
http://www.commonwealthfund.org/ /media/files/publications/issue-brief/
2012/nov/1647_buettgens_small_firm_self_insurance_under
_aca_ib.pdf.
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At this time, there is limited evidence that small employers are
transitioning to self-funding in significant numbers.\14\ However,
employers moving off of transitional plans over the next couple of
years may have greater incentives to self-fund. In addition, when the
ACA's small group market reforms are extended to employer groups with
51-100 employees, more mid-sized employers may look to self-funding as
an option.
---------------------------------------------------------------------------
\14\ Kaiser Family Foundation and Health Research & Educational
Trust, 2014 Employer Health Benefits Annual Survey, September 2014.
(Menlo Park, CA). http://files.kff.org/attachment/2014-employer-health-
benefits-survey-full-report.
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Discontinue offering coverage
Small employers are not subject to the ACA's employer mandate and
some, particularly those of very small size (less than 10) or with low-
income employees, might find it advantageous to drop coverage (perhaps
raising wages to compensate) and encourage workers to seek premium
subsidies and enroll in a plan through the individual health insurance
marketplaces. Evidence of this is anecdotal at this point, and
reductions in offer rates appear to be modest so far.\15\ While a shift
out of employer-sponsored coverage reduces employers' health-related
costs, workers lose the benefit of pre-tax contributions to their
premiums and would have to pay taxes on any higher wages. For lower
income workers however, many may benefit from Federal premium and cost-
sharing subsidies.
---------------------------------------------------------------------------
\15\ Blavin F, Shartzer A, Long SK, Holahan J, Employer-sponsored
Insurance Continues to Remain Stable under the ACA: Findings from June
2013 through March 2015, June 2015 (Washington, DC). Available at
http://hrms.urban.org/briefs/Employer-Sponsored-Insurance-Continues-to-
Remain-Stable-under-the-ACA.html.
What has worked, what hasn't worked, and what policy
recommendations do you have for the committee?
what's working
All employers, including small employers, are benefiting from the
unprecedented slowdown in health care cost growth. Since the ACA was
passed, we have seen the slowest growth in health care prices in 50
years. And the three slowest years of growth in real per capita
national health expenditures on record were 2011, 2012, and 2013. In
employer-based coverage, the average annual family premium was
approximately $1,800 lower in 2014 than it would have been if premium
growth since 2010 had matched the 2000-10 average rate of growth.\16\
---------------------------------------------------------------------------
\16\ Furman J, The Economic Benefits of the Affordable Care Act,
White House Council of Economic Advisors Blog, April 2, 2015
(Washington, DC). Available from: https://www.white
house.gov/blog/2015/04/02/economic-benefits-affordable-care-act.
---------------------------------------------------------------------------
Employers--and their employees--are also benefiting from the ACA's
prohibition on discrimination due to pre-existing conditions. No longer
can an insurer refuse to cover the care for a new employee because he
or she had a medical condition before being hired. Nor can those small
employers with a higher proportion of older workers or women be charged
a higher premium than competitors with a younger or predominantly male
workforce. And small employers no longer have to worry that an employee
with cancer, or a difficult pregnancy, will cause their premiums to
spike.
For those many small employers who have not been able to offer
their workers coverage, they now know there is a viable, high quality
alternative coverage option for their employees. Whether through the
ACA's health insurance marketplaces or in States adopting the Medicaid
expansion, many lower-wage employees may be able to find affordable
coverage for themselves and their dependents for the first time. Even
when they cannot afford to offer coverage to their workers, small
business employers know that health coverage is critical to maintaining
a healthy and productive workforce.
What is not working
Without question, the SHOP exchanges have been slow to get off the
ground. At this time, they are not able to provide a sufficient ``value
add'' to convince small employers--and (more importantly) their
brokers--that a move to a SHOP exchange is worthwhile. Premiums for the
same plans inside and outside the SHOP are required under the ACA to be
the same, and as noted previously, the small business tax credits are
narrowly drawn and difficult to apply for. As a result, the SHOP has
not been able to offer small businesses a price advantage. Perhaps even
more challenging, the commissions for brokers inside and outside the
SHOP are the same, yet enrolling a business in the SHOP currently takes
more time than direct enrolling them with an insurer. As a result,
brokers have no financial incentive to propose SHOP as an option to
their clients.
Policy recommendations
1. Discourage self-funding among employers with fewer than 50
employees. Allowing healthy and younger small groups to self-fund will
cause adverse selection and premium increases for those employers in
the regulated small group market. Yet insurers are increasingly using
low-attachment point stop-loss packages to entice smaller and smaller
groups to self-fund (knowing they can dump them back into the small
group market if their risk deteriorates). Such products make a farce
out of the term ``self-funded.'' When a product looks, acts and
breathes like health insurance, it should be regulated as such.
Congress should define ``self-funding'' to exclude these low-attachment
point products.
2. Encourage the administration to delay implementation of the
ACA's requirement that employer groups of 51-100 become part of the
small group market, and commission a study of the potential benefits
and risks of such a change. While some employer groups will undoubtedly
benefit from the small group market insurance reforms, the most
immediate concern is that premiums for younger, healthier groups of
this size could face a significant premium increase. Over the longer
term, some of these mid-sized groups could face a greater incentive to
self-fund, leaving sicker, older groups in the traditionally regulated
small group market. At a minimum, policymakers need better data about
the impact of this policy change.
Thank you Mr. Chairman, Senator Sanders and members of the
subcommittee for the opportunity to join this discussion today.
Senator Enzi. You were really brief.
Ms. Corlette. I told you I'd be brief.
Senator Enzi. Did you want to make any comments at this
point?
Senator Murphy. No, I don't. I'm good.
Senator Enzi. OK. I appreciate all those comments. You've
given me a lot to think about already. I would mention that
Senator Sanders was referring to the World War II effort that
changed healthcare. All salaries were set during World War II.
Nobody could increase salaries.
There was a little area there where they could provide a
little different benefit for their employees, and that was in
healthcare. There were no limits on that. At that point, the
companies could provide healthcare and give credit for that and
attract the employees that they wanted to attract.
Later, we decided that was such a good idea that we'd make
it tax deductible for the companies. That changed the face of
healthcare at that point. For small businesses, I wish that
healthcare were the only regulation that they had to handle.
Several of you have mentioned the different talents that a
person has to have as a small businessman, and there are
continually more things that they have to worry about.
On the issue of having single-pay, government-run
healthcare, that had a lot more favorability before we ran into
the little Veterans Administration problem that we had a little
over a year ago, and we still haven't worked through that one.
Of course, our goal would be to have portability that
Senator Sanders mentioned so that nobody is locked into a
business. I think if they're working for a major corporation
that pays for their insurance, they're still kind of locked
into that because there isn't probably a better offer out there
anywhere. The benefits are still eliminating some of the
flexibility that an employee might be able to have.
As a few things of clarification that I'd like to do here
to start with, Mr. Harte, you mentioned the 46 percent
difference in costs. Are you referring to a need maybe to have
costs at different medical facilities posted so that we could
see if they change it? Could you expand on that?
Mr. Harte. Yes. The reference I gave to you earlier--you
can refer to the website of nhhealthcost.org, and on that
website in the State of New Hampshire, it will publish the
different reimbursements to each provider based upon certain
categories of service. In my testimony, I shared with you that
from the least expensive facility to the most expensive
facility, for a CT scan of your head, the cost differential is
446 percent.
Senator Sanders' comments earlier were he was referencing a
high deductible plan. Those people who are on a high deductible
plan--it does them so much justice to make sure they have
access to that information. The fact is that information has
very little access today.
The health insurance companies have that information. They
know how much their providers are charging. We need to, as an
industry, make sure that that information becomes available to
individuals.
In New Hampshire, we have access to that information on all
forms of diagnostic imaging, MRIs, CT scans, PET scans, normal
childbirth, cesarean childbirth, x-rays, labs--the list goes
on. However, my colleagues all across the country are envious
of New Hampshire, that we have access to some information. The
fact is we can make a huge difference in the cost of healthcare
if we simply made healthcare costs more transparent.
Senator Enzi. Thank you. That's been a suggestion that
we've had from different places, and some companies have done
that, where they provide the amount of deductible based on
whether people pick the average or above or below average.
Mr. Harte. Exactly.
Senator Enzi. If they go below average, I guess they get
the extra money. That is one of the suggestions, to have more
prices posted.
Mr. Scott, you mentioned the separate meetings because of
age. Could you expand on that a little bit more?
Mr. Scott. Yes, Mr. Chairman. The employees in our office
range from in their 20s to in their 50s. That the premiums are
age rated, we had to make a decision, because when we were
group rated, it was basically $300 a person, and the health
insurance options cost the same if they picked the low, medium,
or high option.
I could tell everybody,
``You have $300. Shop for a plan, and that amount
pays the full cost of the HMO option. If you want more
than that, we'll withhold the additional from your
check and you can get a more expensive plan option.''
The plans are a different price for every individual. On
the low end, the premiums are still about $300. On the upper
end, they're closer to $500, and I think maybe even a little
bit more for the subsidy amount.
In order to keep my promise to the employees that they'll
have access to a zero premium plan, now I need to give them all
a different subsidy to start with so they can actually have
access to a zero premium plan. That's what we did.
Senator Enzi. Thank you.
Mr. Conklin, you mentioned monetized insurance. Could you
give a little broader explanation of that?
Mr. Conklin. Well, actually, Mr. Chairman, I think I said
monetized healthcare.
Senator Enzi. Oh, OK.
Mr. Conklin. What I mean by that is we turned the
relationship, the basic relationship between a physician and
their patient, into a transaction. We all know the stories--or
perhaps some of us are too young to know the stories--about the
Depression, when people would walk in with a chicken or perhaps
in my case a small cabinet or a chair, and the doctor would
take care of us because we didn't have money.
That idea, that concept of ``first do no harm'' has been,
in my opinion, badly dented by the relationship that has to do
with who gets paid and how they get paid and all the middle men
in between.
I'd like to just speak briefly for a moment to your earlier
question about costs and posting costs. Two brief anecdotes:
This winter, I was walking my dog and slipped and fell, hit my
head pretty hard on the sidewalk, went home, reported to my
wife that I was feeling a little dizzy and I had tingling in my
hands but I was going to go to work, and she said, ``No, you're
going to go to the hospital.''
I went to the nearest hospital. The likelihood that I was
actually going to check the price posting on my way in the door
to see a physician is pretty low. About 2 weeks ago, my
daughter called me at 1 o'clock in the morning to report that
she was on her way to the hospital--she had been hit by a car
in Boston--and did she have insurance, which is how I knew she
was concussed. Again, she was in no condition to make a
shopping expedition at the emergency room.
Those are, I admit, fairly extreme examples. They go to an
underlying reality of the whole approach we have to providing
care, that it's based on one's ability to pay, and one has the
capacity in any given situation to make a decision based on
what makes the most economic sense.
What we really should be doing, in my opinion, is we should
be focusing on what makes the most medical sense. If we did
that, if we did a better job of that, I think we would have
lower costs of delivery of service at the point of service.
Senator Enzi. I appreciate that, and I think Mr. Harte was
talking about the things that you have a little bit more pre-
planning on than your concussion or her car wreck. One of the
things that we're finding right now is that some people go in
for the prevention, which is supposed to be free, and if they
find anything at all, then it's not free. That's a little bit
of a surprise to them, and that ought to be posted a little bit
better, I think, for all concerned.
Ms. Corlette, in your testimony, you talked a lot about the
shop exchanges and had some suggestions about what could be
done. Could you expand on that a little bit more?
Ms. Corlette. Sure, Chairman. We are, I guess, about 18
months into the launch of the shop exchanges. In concept, the
shop could be a terrific option for small employers. It tries
to address a couple of the primary concerns and frustrations
that small employers have had in the past.
For example, many small employers are not able to offer
their employees a choice of insurers or a choice of plans. The
shop was designed to provide a marketplace for small employers
to go to say to their employees, ``This is my contribution. You
can take this contribution and shop among different plan
choices.'' It's a very appealing idea.
The other issue that I think the shop was designed to
address is employers' desire for some predictability around the
premium contribution. It allows employers to make what's called
a defined contribution to their employees' premiums, which,
hopefully, will give them some predictability in what they can
contribute.
I think there's a couple of reasons why the shops have been
slow to get off the ground. No. 1, the IT systems. Just as with
the launch of the individual marketplace last year, the IT
systems for the shops have been--it might be kind to say
nonfunctional in many States. That's a barrier.
The other issue--and I'll be interested in Mr. Harte's
perspective on this as well. Most small employers purchase
their health coverage through a broker. What we have heard from
most brokers is that the time and effort it takes to enroll
somebody through a shop--it's just not worth it to them,
because the commission that they get is the same whether they
buy direct from a carrier or through the shop, and because the
shop is taking a considerable amount of time and effort on the
part of the broker, it's just not profitable for them.
Then last, but not least, the tax credits. The Affordable
Care Act created a small business tax credit for employers with
fewer than 25 employees with average salaries of under $50,000.
From what we are hearing in talking to both brokers and small
employers is that the tax credit that they get is just not
worth the time and effort it takes to apply for it, and it's
just not a sufficient incentive for employers to try to enroll
through the shop.
I think the jury is still out. I think we want to see if
they can get their IT systems smoothed out and make it a much
quicker and smoother process and get employee choice rolled out
in every State. It's not rolled out in every State yet. I think
maybe if we could make the tax credit easier to apply for and
get, that might make it a more appealing option for employers.
The other thing is, frankly, there are a lot of private
exchanges that are now being established to directly compete
with the shop in offering many of the same benefits. If we're
going to fix the shops, we have to do it quickly, because the
private market is also recognizing that there's a need that
needs to be filled.
Senator Enzi. Thank you.
Mr. Harte, did you want to comment on that?
Mr. Harte. Oh, I'd love to. Thank you. Her comments are
spot on. The shop, by intent, is an incredible opportunity for
small business, an incredible opportunity. It is a dismal
failure, and I'm going to explain to you why.
We do try to enroll small groups onto the shop. Here's what
happens. No. 1, the maximum waiting period on there is 60 days,
which completely contradicts the Affordable Care Act, whereas
the Affordable Care Act says it's 90 days.
The reason why that is is because it's a backstop, because
if an individual is hired on a given date in the month, they
don't receive their correspondence from the shop until their
last day of eligibility. Based upon that last day of
eligibility, that person only has 2 days to enroll, because
they only enroll on the 1st or the 15th. They must process
before the 1st or the 15th. They have to wait an entire other
month to get their health insurance.
Myself and my own small business--if I am on the shop, and
I tell my employee, ``You're going to be on the health
insurance plan on August 1st,'' and if they don't respond
within the 2-day period to enroll in the plan and select their
plan, they're going to get on the plan September 1, and that
becomes my burden. That's No. 1.
No. 2, lockouts. If in the event that your employer submits
your information for your census and says, ``My date of birth
is 12-5-66,'' and if in the event that my employer put in 12-5-
65, if I go in to change my date of birth, the system locks you
out, and you cannot proceed any further. You cannot enroll for
health insurance.
The testimony you've heard today talks about the brokers.
We try to call the shop. My staff members call the shop, and
they'll be on the phone for an hour to 2 hours waiting for
someone to pick up the phone to unlock it. There's no mechanism
in place to unlock their enrollment.
By the way, thanks for backing me up about the emergency
and urgent care, because I have three kids myself, and I'd
never pick up an app to shop for my emergency care.
The fact is our access to healthcare is my priority to my
clients. The shops, their networks, are bifurcated. In my
State, we have five different plans. We have 26 hospitals. Some
of the plans have only half the hospitals in the network. When
you enroll in the shop, there's a good chance you might
actually lose your physician.
One other comment I wanted to make for you is about the tax
credits--100 percent. We run the analytics. We try to see if
someone qualifies for the tax credits. I don't have any clients
who have been approved for the tax credits.
If you would indulge me for just one moment--because Mr.
Scott referred to this list billing issue that we have out
there--I really want to give you some real numbers so you can
take these back to the other members of the committee.
I brought one example with me, a client called River Valley
Development. It's a small business with less than 10 employees.
Their single rate for a 21-year-old annually is $4,500. For the
64-year-old, it's $13,000.
Senator Enzi. Say both of those again, would you?
Mr. Harte. The single rate for a 21-year-old is $4,579. The
same plan for a 64-year-old is $13,725. That total difference
on an annualized basis is $9,146. To Mr. Scott's point--and
although he didn't say this--this is the struggle with
employers all over the country. They're saying,
``I want to hire an experienced employee who
understands my business, who understands healthcare
policy, who wants to make a difference in their
client's lives.''
The economic decision, as Mr. Scott said, is ``Do I really
want to pay them an extra $9,000 off of my books?''
In essence, the way we look at this in a grid format, every
single employee, regardless of age, all the way from 21 to age
64, has their own rate. Each of their dependents, their spouse,
has another rate. Each of their children has another rate. You
can have some families who are in your employ who pay $20,000 a
year, and you can have other families who pay $30,000 a year
because they have an older spouse or more kids.
This all comes down to--and I know you have this question
coming up, Mr. Chairman. When it gets to the 51 to 100, imagine
the nightmare when we roll out 51 to 100, putting them into the
small group marketplace, and, using an employer with 75
employees, having 75 different rates, and an individual rate
for every single one of your dependents. It's a nightmare to
manage for small business. It'll be more of a nightmare for
businesses with 50 to 100.
Ms. Corlette. I do, though, want to clarify that age rating
is nothing new in the small group market. The Affordable Care
Act simply compressed the age rating band to three to one. What
is new is that the differences from employee to employee are
now transparent to the employer where, before, they were
aggregated. Is that correct?
Mr. Harte. Yes, correct. However, the big difference is--
and, Mr. Scott, you may have had this in your own business, and
you can share this if this is the case. We always had what we
call composite rates. If we had a group that had 10 employees,
even my own company--I have 17 employees--even though I was
individually--my rates were individually created by an
underwriter, I would still have a single, a two-person
employee-child, and a family rate. If you move 51 to 100 over
to a list bill system, it'll be an administrative nightmare.
Mr. Scott. Right. That's why I referred to the change as
sort of the member level billing, because these rates were
always going on in the background, but I didn't have to divide
it up for each employee to tell them, ``OK, well, you're older
so you cost more so I'm giving you more money so that you can
have access to a zero premium plan.'' It was a big change, and
it was disruptive and not helpful.
Senator Enzi. Mr. Conklin, I think you wanted to comment?
Mr. Conklin. I do. I concur that the--like I said, the age
band rating was a shock, but only because it exposed how our
rates were structured previously and more opaquely. The bottom
line is my premium did not increase significantly as a result.
Our cohort remained fairly constant. We did hire a younger guy.
His premiums were around $300 a month, and my oldest employee's
premium is about $725 a month for a single person.
Yes, I can imagine with little difficulty how ridiculous it
would be to expand to the 50 to 100 or even from the 25 to 50
and keep that format in place. It seems to me--and I'm a
cabinet maker from New Jersey. I work from plans. When we get a
plan that doesn't work, we change it, we alter it, we redraw it
so that it does work. Believe me, we've had plenty of drawings
from architects and designers that don't work, and that's part
of our job.
These guys' hands are tied. My hands are tied. You folks
can help untie them. I want to reiterate that that can't come
at the cost of the fundamental building blocks of the
Affordable Care Act that are in place that do work.
I think there are pieces here that would allow us, over
time and with careful adjustment, to do all kinds of
imaginative things to broaden the small group market, to
increase access, to allow us to aggregate, to do all kinds of
interesting things. Those fundamental underpinning consumer
protections that are built into the act must remain in place.
They can't be compromised.
I'm sitting here deathly afraid, frankly, Senator, that
Congress will get their hands on this and just rip it to
pieces. That's not something that I could tolerate. I can
tolerate a 10 percent increase in our premiums, but going all
the way back to square one and starting over again is just
unimaginable to me at this point.
Senator Enzi. Of course, I remember Senator Sanders'
comment that there are 35 million people who are still
uninsured. When we were doing the discussion on the Affordable
Care Act, there were 49 million uninsured. What we've done is
shifted who is uninsured. We haven't gotten the job done, and
we're actually kind of having our hands tied on being able to
make any changes.
There's been a number of changes that have been suggested,
and, hopefully, out of this exercise that we're having this
morning, we'll be able to come up with some ways that small
business can be helped through the process, because I think the
reason we're holding this hearing is I think they're the main
ones that are having difficulties with it. Part of it is
because they're small and they don't have all the expertise
that the big companies have. How do we fix it so that their
expertise can lend itself to getting the insurance for their
employees?
Almost all of them that I know are interested in having
healthcare for their employees and themselves. They kind of
have to include all of them in the family that way.
Were you going to make a comment, Senator Murphy?
Statement of Senator Murphy
Senator Murphy. Yes, if I could just jump on board here.
Senator Enzi. Sure. Go ahead.
Senator Murphy. Let me very briefly just insert a couple of
thoughts on this running dialog about how much we can
ultimately rely on consumers to reset these marketplaces. I
agree with the comments about the moments of interaction with
the healthcare system that are most appropriate to make
informed decisions. That's an important caveat.
There's also all of this literature around the inequity of
knowledge that exists in the healthcare system that makes
consumer-oriented marketplace decisions difficult when you've
got such a different amount of knowledge in the hands of the
person who is providing the service versus the person who is
buying the service. It makes market-based decisionmaking
difficult when there's that much of a gap. Count me as amongst
the skeptics that that ultimately is how you continue to bend
the cost curve.
I wanted to stay on this topic of the change going from 1
to 50 to 100, because there seems to be unanimity of opinion
that there's danger lurking here and that we should be
counseling for at least a postponement of that decision.
I maybe wanted to see if, Ms. Corlette, you would help us
understand the pitfalls of not moving forward. You say that we
should take the time to weigh the costs and the benefits, and
I've heard pretty clearly what the costs potentially are. Why
should we be careful about just walking away completely from
stretching all the way out to 100 in terms of what we consider
for a small group rating?
Ms. Corlette. Sure. Thank you, Senator, for the question. I
should say just for the record--and it's in my statement--I'm
an advocate for delaying the change in definition from 51 to
100 in terms of defining a small group market, largely because
I just don't think we really know what the consequences of that
change will be, and it could cause some market disruption.
The benefits, I think, are fairly straightforward.
Essentially, what it does is extend the small group market
protections that are included in the Affordable Care Act to
these mid-sized groups, so 51 to 100. For example, the
requirement to offer an essential health benefits package of
the 10 prescribed categories in the statute--that will be
required of groups 51 to 100.
Another example is health status. Gender rating will be
prohibited as well as the age bands will be tightened down to 3
to 1. 0n the plus side, for employers that have older workers
or sicker workers or a predominately female workforce, they
could see some improvement in their rates, and some employees
who may not have had the full breadth of benefits that are
currently required in the small group market could benefit from
that as well.
The bottom line for me, however, is I don't think we
understand this market well enough to really know who's going
to benefit, but also on the flip side, who's going to suffer.
There will be some groups that will see some premium increases
that they may not face if we kept the markets the same. Some of
those groups could be faced with incentives to self-fund their
coverage, which will take them out of the regulated market
entirely, and that poses a whole new set of risks.
For those reasons, I would say if this provision is
implemented, proceed with caution.
Senator Murphy. I'll ask this of Mr. Harte. I would
appreciate your comment on this risk toward more people self
funding. I'm sorry that I missed some of the testimony. You may
have already covered this. Are you seeing clients showing an
interest already in moving toward self funding? I assume that
if we do make this change come January 1st, you'll have more
and more companies interested in taking the risk upon
themselves.
Mr. Harte. Yes, 100 percent, and it will be disastrous, and
I'll explain to you why. First of all, I support my own
Senator, Senator Shaheen's bill, Senate bill 1099--she has
bipartisan support with Senator Scott--which will allow
individual States to define where those 51 to 100 eligible
employees will fall. I fully support that. As well, the NAIC,
the National Association of Insurance Commissioners, has issued
their support for that.
That being said, this is what the real world will look
like. If I have an employer today that is a 51 to 100 life
group, and they have favorable claims experience, favorable
meaning there's less than 70 percent--some of those employers
might be 30 percent or 40 percent. Well, if in the event they
are in a fully insured market today, they're receiving a
benefit for having lower claims utilization, but also protected
on the back end should they have a shock loss.
I can guarantee you that that healthy group will leave the
small group marketplace at this transition. Why is that so
important? Well, that's just one group. If you take all of the
healthy groups that have favorable risks that are losing the
ability to be rated based upon their claims experience, they're
going after, as Mr. Scott said, the economic viability of their
own company.
They're going to say,
``I can save money by avoiding the essential health
benefits, by avoiding the nightmares of the 3 to 1
ratio, which will lead to list billing. I will lose my
discounts. I will lose my plan,''
because if you move over to small group, you're not going to
have the same plan that you had as a large group. The
consequences for those businesses, 51 to 100, will simply be
disastrous. I wish there was a better way to put it.
Senator Murphy. There's still significant risk. Any time
you're choosing to self insure----
Mr. Harte. Absolutely.
Senator Murphy. That will mitigate those decisions to an
extent. It will depend on how risk averse you are.
Mr. Harte. You're absolutely correct. You're talking my
language. I've been doing this for 25 years, and that's what
insurance is all about. It's the risk against the peril. Oliver
Wyman came out with a report, and they said 64 percent of the
groups that are in that marketplace of 51 to 100 will be faced
with rate increases, on average, of 18 percent simply for the
migration over to small group.
Those companies that already have favorable risk and want
to keep their plan, they are more than willing, as they have
told me--my clients have told me--we insure some 300
corporations that are small businesses. They've told me that
they will be migrating to the self-funded marketplace.
Senator Murphy. Thank you. I have to run to another
committee meeting, but thank you for holding this. This has
been really fascinating.
Senator Enzi. Thank you for your questions, and, of course,
if you or your staff have more, we can get some written
responses, too.
Many of the people on the committee are involved in the
education debate that started this afternoon, about 30 minutes
after we started. No Child Left Behind has been out of
authorization now for about 8 years, and it came out of
committee unanimously to make some changes, and those are the
changes that are being debated on the floor right now. There'll
be some additional amendments.
There were a lot of amendments in committee. There'll be
more on the floor, I'm sure. There's intense interest from this
committee, which is in charge of that, for doing that.
We haven't lost sight of the need to make sure that
insurance works, and times change, and some of the new
regulations come into play, and we want to make sure that we're
adjusting to those.
I want to ask, particularly, Mr. Scott and Mr. Conklin,
what kind of flexibility you'd like to see for yourself in the
way of possible changes, things that would be beneficial to
you. I know in your testimony you mentioned some things that
ought to be changed.
Mr. Scott. Thank you, Mr. Chairman. First of all, I think
one of the recognitions in making broad national policy is to
recognize the diversity of U.S. business, and that when you
open a small business, it's very personal, and after you go
from being a solo practitioner to going to, say, ``Well, I'm
going to start to hire additional employees,'' you realize that
they're not only depending on you, but their families are
depending on you as well. It's very personal in the way that
you run that business.
There are a lot of small businesses that value providing
high-quality health insurance to their employees. If a business
across the street were to open up and do the same kind of
business as ours and not offer health insurance, we'd want to
be able to leverage that as a competitive advantage of why work
for us.
We want a range of options. We also want access to good
networks of physicians. We want access to care when we need it.
I don't want my employees afraid to go to the doctor because
they don't know how they're going to pay for it. I want them to
go to the doctor when they should and need to. I want to
provide that environment so our employees can focus on work and
that Applied Policy is a good place for them to come work.
Senator Enzi. Mr. Conklin, do you suggest any changes for
kinds of flexibility or changes at all?
Mr. Conklin. Yes. Well, for us, personally, again, because
of our location in New Jersey and the availability in a dense
market with relatively high income availability, insurance
companies are working pretty hard to get everyone's business.
There are innumerable options. My broker comes in with a stack
of spreadsheets about that thick to run through with me.
Unfortunately, when I get the policy and start looking
through it, that's where the arcane and confusing language
comes in. Very often, I don't fully appreciate--that hit on the
head, for example. That was billed out by the hospital at
$12,000. The insurance company paid $4,800, and I was on the
hook for somewhere between $700 or $800.
I called my broker and I said, ``Is this legit?'' He called
me back and he said,
``Yes, this is completely above board. These costs
that you're paying here are part of your co-insurance,
and there's a formula to determine what your share of
the final bill is.''
We start out with $12,000, get $4,800, we're up to $5,200.
It's a complete mystery as to how anybody arrives at any of
this, and when I spoke to my broker, he said, ``Oh, yes, it's a
complete mystery to me. I can't explain it to you.'' If we want
to have a real conversation about what would be helpful, real
transparency would be helpful, for me to be able to understand
in plain language, really, what's going on.
At the bottom of all of this, I think we need to maintain--
I keep saying this, but I absolutely believe it. We need to
maintain robust consumer protections. We need to have real
oversight of the insurance industry, and I have absolute
respect for both of my colleagues on the panel today, and I
know from my own insurance agent--he's a small businessman,
too, and I'm not looking to kill the for-profit insurance
industry or harm their businesses.
We do need that oversight, and we also need to put some
time and money into figuring out how it is this actually works,
because nobody really seems to know. Until we have a better
understanding of that--and, honestly, Senator, I went into the
effort to reform healthcare in 2009 with rose-colored glasses
on, and they quickly dimmed to fogged over.
I concluded at the end that what I really hoped for from
the Affordable Care Act is some window into what it really
costs, because from the perspective of the small business
owner, I need to know what my costs are. When I know what my
costs are, if there's something that's a little out of line,
well, I can focus on that and fix it. If I have no idea what my
costs are, then I really don't know whether I'm running a
profitable business or not.
The bottom line is what are we trying to achieve? Are we
trying to achieve affordable access to healthcare for all
Americans, or are we trying to preserve a system--and I use
that term loosely--that doesn't work, that just is not really
going to work based on people's ability to pay? Because at the
end of the day, they will make bad healthcare decisions that
feel like good economic decisions when they make them, and I'll
do it, too. No one is immune from that tendency.
Senator Enzi. Well, one of the things that we have changed
is health savings accounts. I know that I had quite a few
people on my staff that were young and healthy, and they looked
at the Federal plans, and they looked at the health savings
accounts, and they said,
``You know, if I go with the health savings account
and put the difference in cost into a savings account
so that I have this stop loss from the health savings
account so that there's a maximum that I have to pay in
deductibility, in a maximum of 3 years, I can have that
minimum--that stop loss already covered, and I'm going
to be healthy probably for 3 years.''
That's not necessarily going to happen, but I think in a
lot of the cases--I had a lot of people that were young and
went into the health savings accounts, and that's one of the
things that we've decreased now. People are finding out that
their deductibles are considerably greater than they were
before.
We just made some changes in the flex accounts for people
who want to put some money aside for health insurance, things
that come up during the year. We made a change in that, that
some of that can actually roll over. I'm sure that hurt the
eyeglass industry. A lot of people bought glasses at the end of
the year because they still had some money left in their
account. Now they'll be able to roll some of that over.
Do any of you have a feeling for what we ought to do more
to encourage health savings accounts and the flex plans?
Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman. What we have found is
that allowing young people, at least who are working for us, to
stay on their parents' plans until they're 26 delays their need
to acquire sort of basic health insurance literacy. One of the
great things our broker has really helped us with is educating
the new people that we hire that are younger and that are
picking their health insurance for the first time, just
teaching them about health insurance and how it works and what
a deductible is and the difference between co-pay and co-
insurance so that they're capable of having a basic
understanding.
You can't be an expert in everything, and I can't be an
expert in everything it takes to run a small business. We have
to rely on outside help like from our broker, who has been
spectacular.
For the health savings account, I think that besides more
being done to encourage health insurance literacy broadly,
people have to understand that they're comparing not the cost
of what the premium for their health insurance policy is, but
they need to look at the value of the overall policy. What's
the premium plus what's the co-insurance and co-pays plus the
deductible and what do I expect to use during a year, so they
can make the best decision they can. When you look at that,
then you can actually see the value of an HAS coupled with a
high deductible health plan.
Right now, we're still at the place where we're trying to
show the young people that this is health insurance, and here's
a deductible and a co-pay, and here's what--yes, the premium is
cheap, but that means that if you go to the hospital, you're
going to have to pay the $1,500 deductible. There's a lot of
work, I think, that can be done there. I think that would
increase the appeal of HSAs together with high deductible
health plans.
Senator Enzi. Mr. Harte.
Mr. Harte. The expectation, of course, is that when you
have the health savings account, it's your money, and if it's
your money, you want to spend your money wisely. I'm actually
coming full circle back here because when you have the health
savings account, and you know that you have to spend that money
on a particular product or service, that being healthcare, you
want to choose wisely.
When you don't have access to the transparency tools to
know that--I need to go in for lab work. I'm not sure how much
it's going to cost here. Maybe I should be going to a
freestanding lab. Does it really make a difference if I go to a
hospital? I really don't know. For those on your staff that may
have migrated to a high deductible health plan, they will find
out quickly that that money can be burned up very quickly
without having access to that information.
That being said, I also want to share with you that my
professional trade association, the National Association of
Health Underwriters, has been talking about health savings
accounts since before they were popular. We recognize that it's
one of the most powerful consumer-driven tools to effect
behavior. In order for it to work, you have to have a system
that supports the purchase of those products.
We can look at the data as it relates to healthcare
services that are not covered by insurance, so you can talk
about services such as Lasik eye surgery. Over the past 10
years, Lasik eye surgery has come down dramatically because
it's been a part of competition, because people are looking at
that price. The same could also be true for other services as
we come to a more transparent world.
That also being said, my trade association supports the
Affordable Care Act. We're here today and recognize that it's
here to stay. The Supreme Court has made its decision. We're
beyond the debate. We're here to make sure that we can
collectively work together for the accessibility and
affordability of health insurance for all Americans and fix the
problems for those 35 million that Senator Sanders talked about
that he says are uninsured.
The only other comment I'll say about health savings
accounts which no one is talking about, but it's a significant
concern for myself and my trade association as well as
employers who recognize this issue, is when we start talking
about the excise tax in 2018, employer-sponsored health savings
accounts and employer-sponsored health reimbursement accounts
and wellness programs, as well as the premiums that they pay
for the health insurance, are all included in that calculation.
What might surprise you is that employers or their
employees will be paying substantial tax on their health
savings account because it's over a threshold.
Ms. Corlette. If I may, on health savings accounts--a
couple of concerns. As you probably know, Senator Enzi, the
health savings accounts involve several tax advantages that
accrue, particularly to people who are healthy and who are
wealthy. Contributions are obviously tax deductible. The money
as it accrues in investment accounts accrues tax free or grows
tax free, and then withdrawals are tax free if they're used for
medical purposes. They are great tax sheltering devices for
people with a lot of disposable income or for people who are
healthy.
Frankly, that comes at a cost to the Federal Government. If
you are expanding eligibility for HSAs, and they become more
widely used, that costs money, Federal taxpayer dollars, to
support that. Quite frankly, when I look at the finite Federal
resources that we have, I would far rather see scarce Federal
dollars go to support people at the lower end of the income
scale to help make coverage more affordable for them both in
terms of the premiums that they pay as well as the cost
sharing.
If we're looking at--you know, it's a finite pie, our
Federal tax dollars. I would far rather see those go to people
of lower incomes who are, frankly, more vulnerable. If we're
going to do something with Federal tax dollars, let's not give
a government handout to the people who need it the least.
Mr. Conklin. If I may, I'd like to tag on to what Ms.
Corlette said and give you a practical example. I can tell you
right now that if I went out to my employees--and our average
income at Foley Waite LLC is $45,000 a year. In the New York
metropolitan area, there was a time when that was actually a
pretty solid middle class income. No one could support a family
on $45,000 a year and have savings for college, have savings
for the down payment on a new car, having savings for a house--
that's just completely out of the question--have a little money
set aside for a family emergency. It's just not possible.
You can make the very compelling argument that my
colleagues made for health savings accounts, but it's going to
be a no-sale for my employees. I think that to hang a
significant alteration of the Affordable Care Act on that is
going to lead to some disappointment. Clearly, it's going to
help some people, but there's going to be a significant portion
of the workforce that just is not going to be able to access it
or take advantage of it. That's where the real rubber hits the
road.
In New Jersey, the small businesses that are getting
absolutely hammered are the 25 to 50s. We need to expand both
that income threshold to allow small businesses to take
advantage of the tax break, and we also need to expand the--in
doing that, increase or reformulate the calculation for those
businesses that would qualify. Once you go over 10 you've got
to be paying people $3 an hour to have any sort of significant
tax refund from your insurance--subsidy is the word I'm
struggling for here--for the subsidy to represent any
significant advantage.
We need to increase the subsidies for businesses between 10
and 25. I think we should do that immediately. I also think we
need to raise the threshold. When the Affordable Care Act was
first being formulated, one of the things that we advocated for
at Main Street Alliance was figuring out a way to calculate
into the subsidies the cost of living, because an across the
board national threshold didn't make sense to us.
Senator Enzi. The cost of living then would vary by State?
Mr. Conklin. Region is probably more accurate. You could
have, for example, Washington and Boston. You might have one
standard for that entire area, and for the fly over country,
incomes might be somewhat lower, and therefore you might have a
different threshold in that part of the country.
Mr. Harte. Senator Enzi, could I make one quick comment?
Senator Enzi. Yes, sure.
Mr. Harte. Mr. Conklin is just like many of my other
clients back home, where he clearly appreciates his employees
and wants to do what he feels is best for them. We deal with
those struggles every single day. I appreciate his comments
about how savings accounts are not the solution for my
employees. When I walk into a client, I don't assume that a
health savings account or a high deductible plan or an HMO plan
or a PPO or a POS or all the other acronyms that we have is a
one-size-fits-all for all of our clients.
We believe in choice, and that goes back to Senator
Sanders' comments earlier, when we talk about a public option
or national healthcare. The employers that I talk to every
single day, the 300 that we represent and the 25,000
employees--they don't want to not have choice. I know Mr.
Conklin and I agree, but we disagree in certain matters.
I believe that what's most important for small employers
out there, myself included, is we want to do what we feel is
best for our employees. Although our system is broken and it
needs repair, we shouldn't replace that with a system that will
take that choice away from business owners and their employees.
Senator Enzi. Anybody else want to comment on that?
Mr. Conklin. I'll go, because I think it's important that
we do have an understanding, and I'm not sure we do yet. I said
earlier that I'm not sure I agree with Senator Sanders, as much
as I admire him, about a single payer system. He did mention
that there are multiple models.
My concern is the 35 million people that are uninsured, and
I look at it, really, from a standpoint of a business owner. I
know that's probably not the best way to look at it, but I
don't have much of a choice. As long as those folks are out
there, and they're accessing healthcare, my employees and I are
picking up the tab if they can't pay the bill.
That has a lot to do--and I'm sure these folks to my right
know this--with that crazy pay--that crazy cost differential in
delivery, at the point of delivery, because there's all this
cost shifting going on. There's all this--how does the hospital
or this medical group cover the cost of folks who showed up
that we didn't leave on the sidewalk?
I don't think we live in a country where we're prepared--I
have employees from Central America. Very quickly, years ago,
if you went to the hospital in El Salvador--I had an El
Salvador employee--and you were injured, the doctor would come
in or a nurse, and they would give you a list of all the things
they needed to treat you, and then a family member would go
down to the Pharmacia and get them.
If you could afford it, you got care. If you couldn't, they
patted you on the back and said, ``I hope you survive.'' And I
said, ``I can't believe that.'' They said, ``No, no, no. That's
the way it works. That's the way it works.''
I don't think that's where we want to go as a country, and
we're not going to. I'm not suggesting that we would. In a
sense, it is where we are. If you don't have the money to pay,
somebody's going to pay, and it's going to come through this
convoluted, incredibly complicated system that we have that
increases cost and reduces outcomes.
Ms. Corlette. One comment--oh, I'm sorry.
Senator Enzi. Go ahead.
Ms. Corlette. Mr. Chairman, I don't disagree that small
employers want choice and to be able to give their employees
choice. However, that choices come with consequences, and one
of the things that policymakers, particularly national level
policymakers, need to think about is what might be the right
choice for an individual or small employer if it's done at a
critical mass could be the wrong choice for the market as a
whole.
As policymakers, I think it's incumbent on you all and
those of us who try to support you to think about not just
let's have unfettered choice for everybody, but also what are
the consequences of those choices for those who may not be able
to take advantage of them. For employers who have sicker, older
workers for whom, for example, self funding is not an option,
what are the consequences if a critical mass of small employers
self-fund. These are really critical things that policymakers
need to think about before just opening the door to unfettered
choice.
Senator Enzi. Thank you.
Mr. Conklin. One more anecdote. About a year ago in New
Jersey, some legislation came up to open MEWAs up. I had never
heard of a MEWA. I didn't have any idea what that was. One of
the things that was included in the MEWA was a modified
essential benefits model. You could sort of cull out some of
the more expensive essential benefits and offer this as a plan
for what I would describe as medium-sized small businesses.
The consequences of this, had that legislation passed,
would have been the collapse of the small market in New Jersey.
It would have just destroyed it. We do need to tread carefully,
and one guy's solution is another guy's disaster.
Senator Enzi. Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman. I think it's important
for me to answer Senator Sanders' opening question about access
to healthcare in the United States and why it might not be
viewed as good as other countries in the world. I think that
everyone in the United States should have access to high
quality healthcare.
I also think an American solution to the problem should
recognize that Americans, or at least myself, value freedom,
opportunity, and self determination, and part of the American
dream is being able to open a small business and take that risk
and have that opportunity. With that opportunity, there's no
guarantee that it's going to work out. If you can't fail, it's
not really a challenge.
I think Americans also value access to the latest and best
care, and I'm not sure if that's what they value in the rest of
the world. You should look at the other countries and see what
their models do, but I don't think you should wholesale adopt
any other country's particular model and say that that's good
for America. I think that America has some important
differences and that the American solution should ensure that
everyone has access to high quality healthcare.
While there are 35 million uninsured, I think it's
important to acknowledge that there's more than 300 million
Americans. While you're fixing the 35 million uninsured
problem, don't mess up the 200 million part of people who do
have access to health insurance.
Senator Enzi. Thank you. Again, I'll mention that the 35
million are a different 35 million, but still 35 million that
were uninsured when we started the whole discussion several
years ago. What we've done is shift who's insured. What I'm
trying to do with this panel and with this effort is to figure
out how to insure the other 35 million people.
In Wyoming, we have limited insurance company options. We
don't have the raft of them that could provide you with all of
those documents and spreadsheets. Last week, one of them said
they're going out of business. We're only looking at even more
limited choices. That's not choice. That's really a monopoly.
We could have some problems based on that.
Another experience that I've had--I was in India. I was
primarily looking at education. They promise that every kid
gets an education through sixth grade. We found out that they
kick out most of them in fourth grade. They're the ones that
get a dollar a day the rest of their life sweeping the streets,
and then they kick out more in sixth grade, and they get $2 a
day the rest of their life--no opportunity to change.
They have healthcare for everybody, the one that makes $1,
the one that makes $2, and the one that makes--well, $25,000 is
considered a real high wage there. We went by a hospital, and
there was this line that went way around the block, and I said,
``What's that? '' They said, ``Well, that's the people waiting
to see a doctor.'' And I said, ``Will the doctors get to all of
those people today? '' ``No.''
They're all guaranteed healthcare, but they can't get to
see a doctor. In my opinion, they don't have healthcare, and we
certainly want to avoid that in this country.
At this point, I've run out of questions. I'll let each of
you do a concluding statement, if you have some more
suggestions for us. There may be some legislation that comes
out of this. Again, I'm concentrating on that--because of the
statements that you provided beforehand, instead of looking at
1 to 25 or 1 to 50, I'm looking at 1 to 100 where we can make
changes, and I think that's probably the real small business
market, even though the Small Business Administration says it's
500 employees.
We're just picking random numbers anyway. Since most of you
mentioned 1 to 100, I would be interested in any concluding
remarks you might have for improving the coverage in that area.
You don't even have to give them all right now. You can include
that in anything additional, written, based on what we've done
here today. That might be helpful to us.
We'll go in reverse order this time. I'll start with Ms.
Corlette.
Ms. Corlette. Sure. Thank you. I'll just close with my two
main policy recommendations. The first is--and we've already
alluded to this a little bit. I would encourage the committee
and the Congress to discourage self funding among small
employers. When the risk of self funding is really borne by an
insurance company and not the employer, that's not true self
funding.
When you have a functionally equivalent product that's
allowed to compete on a different set of rules, that sets up an
unleveled playing field and creates risk of adverse selection.
This is something that, actually, the administration could do
independent of Congress by simply defining what self funding
means and to say that if it walks, talks, and breathes like
traditional insurance, it should be treated as such.
Then the second policy recommendation is--again, I think
we've touched on this. I would suggest that there be a delay in
the definition of small group market extending not to 100. I
think we need to understand the consequences of that and really
understand who's in this market, what do the groups look like,
what do their rating structures look like, what would the
premium impact be before that definition change goes into
effect.
Senator Enzi. Thank you.
Mr. Conklin.
Mr. Conklin. Yes, Senator Enzi. I really sincerely want to
thank you for this opportunity and for the way you've conducted
this meeting. I appreciate very much your interest, which I
believe is genuine and heartfelt, and I think we both share
some very significant and important goals, not the least of
which is trying to figure out how we get everybody access to
real healthcare.
Your example of India is certainly frightening. My
daughter's best friend just graduated for the last time, and
now she is a full-fledged OBGYN working in Boston. She is,
without question, the smartest person I know and perhaps the
hardest working person I know.
That combination of brilliance and drive is rare. Among the
many things we're going to have to figure out is how we provide
a broad-based healthcare system that provides adequate access
and allows doctors like my daughter's best friend to do her job
as well as she possibly can. No one pretends--I certainly
don't--that this is not a daunting undertaking.
When the Affordable Care Act was being initiated, I had, I
think, very reasonable expectations that it would be a first
step and that there are many steps to go. I don't think there
is another model that we can duplicate in the United States.
I believed then and I believe today that whatever we come
up with, it will be uniquely American, and that it will
probably involve for-profit insurance, and it may involve some
nonprofit insurance components. It will certainly involve a
great deal of support at the bottom of the pyramid for people
to be able to access healthcare.
I would beg you, Mr. Chairman, to focus on the goal. What
is it that we are trying to accomplish? I think you and I share
that goal, that is, to make sure that every American has access
to healthcare.
Senator Enzi. Thank you.
Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman, for the opportunity to
participate in the roundtable today. As a small business owner,
the current status is uncertain for us of access to health
insurance because we don't know what the premium rates increase
will bring.
At the same time, we have a desire to keep consistency in
the health insurance plans we offer from year to year, so
employees who get comfortable with the coverage and co-pays are
able to keep the physician that they're used to, they learn how
the plan works, and then they cannot worry so much about
healthcare and health insurance and focus more on their work
and have that comfort that insurance should provide.
In considering reforms, we would like less help from the
government. When the government enacts new programs and
innovative changes for us, it usually means a lot of new
bureaucratic requirements and risks and stern letters, like we
got with the MLR. Also, government-run programs seem slow to
change and adapt to changing circumstances, and, frankly, we
think we do better on our own, being able to shop for health
insurance coverage under the current system. We'd just like
more predictability in what we're getting and not see double
digit premium increases every year.
That's all I have. I'm happy to respond to questions after
the hearing in writing or in any way we can. Thanks again for
the opportunity to participate.
Senator Enzi. Thank you.
Mr. Harte.
Mr. Harte. Mr. Chairman, as I said earlier, I truly
consider this an honor and a privilege to be here today to
represent my clients, to represent the members of NAHU. With
all heartfelt thanks and gratitude, thank you for the
invitation. Also thank you to your staff for all they did to
assemble an amazing panel of individuals who are exemplar in
their own rights and passions, which I sincerely appreciate
having the opportunity to share this opportunity with them.
They did a great job.
I will share with you four final policy recommendations
from me. The first, as the testimony from the other panelists
discussed, the role of the employee benefits broker has
transformed itself during my career of 25 years. Today, I spend
more of my time dealing with compliance and underwriting and
evaluation and taxes and fees and regulations and legislation
more than I ever would have imagined.
Certainly, I didn't wake up in college one day and say,
``I'm going to be an insurance broker.'' I know that my
clients, much like their own personal experience, sincerely
appreciate the hundreds of thousands of agents and brokers out
there who are working tirelessly as the first line of defense
in the understanding of the complexities of healthcare reform.
With that, we've been talking about MLR for a very long
time, and agents and brokers are going away in some States
because their compensation is included within the MLR. Senate
bill 1661 addresses that issue and, hopefully, will provide a
strong foundation for those who are considering to leave the
business in hopes of other opportunities. They want to be able
to help their clients. That's No. 1.
No. 2, we've talked about the 51 to 100, but the one part
that we haven't talked about is the employer reporting. All I
will say to you today is this, that large businesses, over 100
employees, are having a very challenging time embracing the
employer reporting on the 6056 and the 6055. We really have to
delay the reporting for those medium-sized groups of 51 to 100.
There's another Senate bill out there, Senate bill 1415
from Senator Heitkamp, and that's a repeal of the employer
mandate for group sizes 51 to 100. That will remove the
penalties or remove the mandate entirely. We fully support
that. We're putting a lot of pressure on those groups, and
whatever we can do to mitigate the potential damage with the
continued rollout of 51 to 100 will be welcomed by them.
The last thing I'll say to you--and I know some have
commented on the 3 to 1 age bands. If we can somehow reduce
those restrictions so that maybe we can go to 4 to 1 or leave
it to the individual States to make the decisions of what's
best for their communities. Leave it to the insurance
commissioners and let them make the decision, because every
State is unique in how they should be developing their rates.
In my closing comments, I'll say to you, as in my first
speech in front of NAHU back in 2001 and close with the same
remark. I say this, that health insurance is expensive because
healthcare is expensive, and that has to be part of the
solution.
Again, Mr. Chairman, thank you for the opportunity.
Senator Enzi. Thank you. I'm glad you mentioned the
healthcare being more expensive. We're the inventors for all of
the things for the rest of the world, and I know of a lot of
things that are coming through the pipeline now that will make
a difference to people. I've noticed that the cost goes up, and
we don't want those things denied to people, either.
I appreciate all the suggestions that you've given today.
I've been working on healthcare for a long time. I got to work
with Senator Kennedy for years, and we did a lot in other
bills. The Needlestick bill was the first one that I got to
work on so that there is protection for the nurses and the
janitors and stuff that they wouldn't accidentally get stuck by
a needle that had been used on somebody and then maybe have to
wait a year or two to find out if there was going to be a
complication from it.
Consequently, he and I worked on a lot of things. One of
the things we were working out was a 10-step plan for providing
healthcare for everyone. That is on my website, and I've been
talking about it for a long time, and some of those would be
changes that might help, particularly, the small businessman,
because I always look at it from that position because that's
all I understand. I was a small businessman. We had three shoe
stores, and I know that that's most of America.
I appreciate it. Your comments have been very helpful
today. Like I said, people will be allowed to submit questions.
I think they'll have to have those in by tomorrow night. If
you'd answer those, we'd appreciate it. Any other suggestions
that you have for things that might improve the healthcare
system, for small business, we'd be appreciative of. If you'd
limit it to that, we'd also appreciate it.
Thank you for being here today, and I thank the people who
came to listen as well, and all the staff members who, of
course, will get back to their Senator to get additional
questions and to share this information.
Thank you.
[Additional Material follows.]
ADDITIONAL MATERIAL
Response by J. Kelly Conklin to Questions of the HELP Committee
Question 1. What is the status of the health insurance market for
small businesses, specifically plan options and costs in the small
group market?
Answer 1. From our perspective as a New Jersey company purchasing
health insurance in the small group market as we always have, through
an agent, there is little appreciable difference between now and before
the ACA in terms of options. There are many. There is the same
confusing, arcane language in the policy documents and in how the
various plans are presented. That makes meaningful comparison almost
impossible beyond the most basic considerations: premium cost, co-pays,
deductibles and maximum annual out-of-pocket costs. As a small company
with tight margins the first consideration is always premium cost.
Premium increases over the previous two renewals, 2013-14 have been
in the neighborhood of 10 to 15 percent. That said this year's is down
about 2 percent and we reduced deductibles for the individual to 2,000
from 2,500. That did come with an annual increase in total maximum out-
of-pocket from 5,000 to 6,000 per individual and 12,000 per family.
There was an initial ``shock'' when the new price schedules were
implemented using age as the determinant factor of premium rates. In
that initial adjustment we had the biggest rate increase in some time
as a result of our older population of employees participating in our
plan. As I recollect that was around 18 percent.
Question 2. What tools and options are available and useful for
small employers to offer some assistance to their employees?
Answer 2. This is a difficult question to address. There is of
course more information than ever available to anybody interested
enough to investigate the available plans in their respective areas. In
New Jersey with its high density, well off population, the market is
relatively rich affording options on the individual market that did not
exist prior to the ACA through the exchange. Choosing a plan can be a
daunting experience, filled with uncertainty and anxiety. Thankfully
the comprehensive consumer protections, essential health benefits, no
exclusion for pre-existing conditions and medical loss ratio oversight
are in place to reduce the actual risk to individual consumers.
We recently had our oldest employee move to Medicare. His younger
wife could no longer be covered under our plan. In the exchange they
were able to purchase a slightly higher quality plan, lower deductible,
lower co-pays, for about fifty dollars more per month than the coverage
she had under our plan. Medicare with part D and the additional
supplements making his coverage complete, saved us enough in premium
cost to raise his compensation to cover his additional out-of-pocket
expenses and his wife's coverage, while saving us about $200 per month.
Question 3. What has worked and what hasn't worked and what policy
recommendations do you have for the committee?
Answer 3. New Jersey's robust consumer protections prior to ACA,
mentioned above, made cost increases in our market tolerable. The
uniform consumer protection standards contained in the ACA for health
insurers, along the lines of New Jersey's, is a critical piece of the
ACA that cannot be tampered with. No lifetime limits and no exclusions
for pre-existing conditions are cornerstones of increased access and
financial security and should not be altered as well. These features
along with the MLR have had the expected effect of containing both
premium increases and cost shifting by providers. This along with other
features of the ACA is working to decelerate the rate of health care
cost increases.
There are any number of things that might be done to improve the
ACA. Repeal is not one of them. Nor is a piece by piece alteration of
the law that will have the same effect as repeal. Congress must act to
restore faith that changes to the ACA come by way of improving access
to care and by means resulting in affordable quality health care, not
political victory laps. I suggest correcting the sentence in the ACA
recently adjudicated by the Supreme Court would be a good first step.
Done without filibusters and amendments, this symbolic gesture would
send a powerful signal to the people that Congress is at long last
ready to attend to the people's work.
The ACA is the first major step toward providing universal access
to health care, an as yet unmet goal of the reform effort. As long as
access is determined by one's ability to pay, whether at the point of
service or in the purchase of insurance, our health care costs will
continue to climb while quality and availability of care continues to
decline. Voluntary charity care remains an inadequate alternative to
mainstream access and that shortfall continues to contribute
substantially to cost shifting and deferred care, leading to expensive
and poor outcomes. We can do better.
Basic access as established by essential health benefits under the
ACA should be available to every American. If that requires a universal
expansion of Medicare to make that access available to the unemployed
and working poor, then we should do that. If it requires excluding for-
profit insurers from those income earners at 400 percent of the poverty
line to an established income level that makes for profit coverage
affordable, we should do that. We should at minimum increase both the
number of employees that establishes a business as small and the
average income per employee that qualifies an employer for subsidies.
We should do that now, without delay or fan fair.
I abhor the word fair, my heart is not bleeding and I don't care
about level playing fields. I don't live in The Magical Market Place
where innovation and quality are always rewarded and fraud, abuse,
incompetence and inefficiency, broadly shared characteristics of all
human enterprise, is always weeded out. That is why I know that until
every American has a card in their purse or wallet that guarantees
access to a doctor--any doctor, anywhere--until emergency rooms only
serve emergency patients and not emergency patients and the uninsured,
I and my employees will pay too much for too little. This is a
practical problem requiring the completion of the critical step forward
that is the ACA. Our goal must be a comprehensive, all inclusive health
care delivery system in the United States. We should get on with it.
Response by Sabrina Corlette, J.D. to Questions of Senator Warren
Question. Under current law, the 40 percent excise tax on high cost
health plans, known as the Cadillac Tax, will go into effect in 2018.
In determining the cost of repealing the Cadillac Tax, the
Congressional Budget Office assumes individuals that have their health
benefits reduced due to the tax will experience an increase in taxable
wages. Some groups have expressed skepticism that reduced benefits will
lead to increased wages. A 2014 study by Harvard researchers published
in the Journal of Health Economics and a 2013 study from the National
Bureau of Economic Research, which both focused on public sector
employees, found that when employer health care costs increased,
employees paid for some of that increase through reductions in wages.
If employers decrease the amount they spend on employee health
plans in order to avoid the Cadillac tax, would you expect an increase
in employees? wages? If so, would the increase in wages be expected to
fully offset the reduction in benefits?
Would a requirement that employers must offset any reduction in
benefits with wage increases change the responses of employers to the
Cadillac Tax?
Answer. Many economists believe that on average and in the long
run, employees bear the full cost of coverage. In other words, economic
theory suggests that workers pay for higher health care costs via lower
wages. However, that theory is dependent on the notion that employers
get no independent benefit from offering coverage. Some economists have
posited that providing health insurance coverage has benefits that
accrue to employers, such as improvements to worker productivity or
reductions in job terminations.\1\ A 2005 study found that firms
offering benefits (including health and pensions) have higher
productivity and higher survival rates.\2\ If these analyses are
correct, it suggests that a reduction in benefits would not necessarily
be fully offset by an increase in wages, at least in the short term. It
is not clear how employers would respond to a requirement to offset a
reduction in benefits with wage increases. More research on this
question is needed.
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\1\ Garret B, Chernew M. Health Insurance and Labor Markets:
Concepts, Open Questions, and Data Needs. Inquiry 45: 30-57 (Spring
2008). Available at http://inq.sagepub.com/content/45/1/
30.full.pdf+html.
\2\ Decressin A, Lane J, McCue K and Stinson M. Employer-Provided
Benefit Plans, Workforce Composition and Firm Outcomes. Technical Paper
No. TP-2005-01 (2005). Suitland, MD.: U.S. Census Bureau, LEHD Program.
[Whereupon, at 3:41 p.m., the hearing was adjourned.]
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