By DAVID A. LIEB
Associated Press
Faced with high health insurance costs, a North Carolina brokerage passed the buck on to its employees, a Texas public relations firm switched from group insurance to stipends, and a Missouri travel agency let its workers walk away instead paying for insurance.
Across the country, businesses already strapped by the economy to turn a profit are sacrificing or scaling back employee health insurance plans because of their escalating costs. The crunch has particularly socked smaller employers, who have become a centerpiece in the debate over how to overhaul the nation's health care system.
In recent weeks, small business owners have pleaded their case to the White House and Congress. Top Democrats in both the House and Senate have announced probes into how health insurers price their policies for small businesses. And lawmakers have proposed a variety of insurance rating changes, mandates and tax breaks to try to control costs.
That comes against a backdrop of some stark statistics:
_ Small businesses are paying an average 18 percent more than the largest firms for comparable health insurance policies, according to a study financed by the Commonwealth Fund.
_ Many small businesses are facing double-digit rate increases for insurance coverage this fall. Insurers are requesting small group rate hikes of 10-15 percent in Ohio, an average of 15-16 percent in Maryland and as much as 20 percent in Washington state, according to an informal survey by the National Association of Insurance Commissioners.
_ The number of businesses with three to nine employees that offer health insurance has shrunk from 58 percent in 2002 to 46 percent this year, according to the Kaiser Family Foundation.
"There's no way that (small businesses) can go another 10 years like the last 10 years," said James Gelfand, senior manager of health policy for the U.S. Chamber of Commerce.
Small companies lack the leverage of their bigger counterparts to negotiate with insurers. So when health insurance rates rise, they often look for a new insurer — a time-consuming task for firms that lack a human resources department. Many small businesses seek to soften rate hikes by asking employees to make higher co-payments, offering high-deductible plans, switching to less generous benefits or simply dropping their coverage.
Cooper Smith tried each of those options over the past several years while straining to offer health benefits at his four-person public relations firm in Dallas. He dropped dental coverage, doubled the employees' yearly health care deductible from $1,500 to $3,000 and raised co-payments for doctor visits and prescription drugs.
"Every year I just saw it go up and up and up, like 18 to 20 percent, and every year we did what everyone does — we tried to figure out ways to get the cost of the plan down," Smith said.
Finally, Smith's firm decided to drop its group health insurance plan in favor of a $125 per month stipend that each employee can put toward an individual insurance policy. Smith was surprised to discover that insurers wouldn't sell him an individual plan because of a diagnosis of psoriatic arthritis. So he now pays about $425 a month for a $5,000 deductible policy through Texas' high risk insurance pool.
About three-fourths of states allow insurers to vary their standard rates by demographics such as age and gender, geography, industry and the cumulative health status of the people covered in the group. A small business with more older workers or women of childbearing age is likely to pay more than one composed mainly of young males. Employees with pre-existing health conditions or an unexpected big medical expense also drive up premiums for a small group, making it hard for small business owners to plan for their health care costs from year to year.
Classic Travel Tours & Tanning in Jefferson City, Mo., sought to provide health insurance when one of its fewer than a half-dozen employees developed breast cancer, said owner Linda Bax. But there weren't enough other employees wanting to purchase a policy for the company to be able to afford it. Eventually, the employee with cancer quit.
"We've had some great employees who have had to leave" for other jobs, Bax said. "Even though they took a cut in pay to go someplace else ... it provided them the benefits they needed."
Proposals in Congress would prohibit the insurance industry from adjusting rates based on the health of employees, though some variation for age would still be allowed. Small businesses also could more easily shop for policies through a new health insurance exchange.
Both the House and Senate versions would offer temporary tax credits to offset a portion of the health insurance costs for businesses with fewer than 25 employees and average wages of less than $40,000.
Those provisions could make health insurance more affordable for small businesses currently priced out of the market. But others not now offering health insurance could find themselves forced to do so.
Legislation passed by the House would impose a tax penalty on businesses with payrolls of more than $500,000 that don't offer health insurance or fail to pay at least 72.5 percent of the premium costs for a health plan with federally mandated benefits.
The National Federation of Independent Business estimates that payroll threshold would get triggered for businesses with about 17 employees. The group lists the mandate to offer insurance and the corresponding tax penalty as its top two reasons for opposing the legislation.
"It's a roadblock to job growth," said NFIB tax counsel Bill Rys. For a business near that payroll threshold, "the cost of adding one or two workers isn't just the cost of hiring the employee, it's the cost of complying with the mandate."
Ashley Ascott, whose 12-person brokerage firm sells commercial, home and car insurance, says her Morrisville, N.C., company faces the same financial pressures her customers are facing. She's laid off one employee, cut another to part-time and has two people working four-day weeks.
Yet her insurance company still is struggling to provide its workers health coverage.
Last year, the company paid 60 percent of the health insurance premiums. This year, Ascott switched to a flat $100 monthly contribution, amounting to about 40 percent of the cost for an individual plan and less for family coverage.
"We still need to provide it, but we just couldn't keep paying the 60 percent," she said.
Saturday, November 28, 2009
Small firms scrapping, scaling back health plans
Wednesday, November 25, 2009
How Health Insurance Discriminates Against Female-Heavy Business
By Marc Tracy
BizBox.Slate.com
Kaiser Health News has a new article detailing how woman-owned or -dominated small businesses tend to get hit particularly hard by high health care premiums. The reason is simple: women, particularly under 55, tend to require more health care than men of the same age, primarily due to maternal and infant care. If you think that means it's okay for women to have to pay more, then we suppose you're entitled. But we don't think that makes it okay, and we suspect more people agree with us than with you.
But even if you feel that way, there is simply no good argument for why so-called "gender rating" should apply to small businesses and not to large ones. You see, under current law, insurance companies are banned from gender rating among large-group markets. So if you have 51 employees, you're okay; if you have 50, you're out of luck. Of course, most of the legislation currently circulating on Capitol Hill would change that, and would establish that the small-group market be treated essentially the same as the large-group one. One more reason to hope for reform's success.
Sunday, November 22, 2009
Clipping health costs in the bud
BY CAROL FLETCHER
The Record
As health insurance premiums skyrocket and small businesses struggle to pay them, insurers are pointing to wellness programs as a way to help offset costs.
Through Web sites, health assessments and seminars, wellness programs act as health coaches to turn employees away from smoking and overeating and toward exercising and eating leaner, and to help them track their health data.
"Employers, large and small, who provide [wellness] programs for employees to address such common health challenges as diabetes management, heart disease, smoking cessation and good nutrition, will play a direct role in cutting health care costs," wrote Michael McGuire, chief executive officer of United Healthcare of New Jersey, a division of the health-care insurer based in White Plains, N.Y., in a column about wellness programs.
Such initiatives began emerging a decade ago and the concept has found its way into the health care overhaul debate.
In July, the U.S. Senate's Health, Education, Labor and Pensions Committee approved The Affordable Health Choices Act that requires health insurance policies to include financial incentives rewarding wellness efforts.
Most insurers' wellness programs include Web sites to determine and track health data. UnitedHealthcare's Web site includes a body mass index to determine body fat as well as heart attack calculators.
Newark-based Horizon Blue Cross Blue Shield of New Jersey's Web site allows employees enrolled in any type of health plan to monitor data such as blood pressure, weight and their progress toward quitting smoking, said Peter Morey, director of product development.
In October, Horizon began offering employers with 100 to 499 enrollees onsite health screenings and lunchtime seminars about issues such as weight management or control of diabetes as part of the premium, said Morey, something that previously required an additional cost.
"A lot of wellness activities seem to be concentrated in the higher end of the market — above 500 employees," said Morey, adding that United is offering activities to smaller employers who might not have the resources to do such programs.
He said insurance brokers are excited about the new offering and Horizon is considering it for even smaller employers.
On the topic of whether health screenings and assessments reduced insurance premiums, Morey said savings would come in the long run if conditions such as high blood pressure are caught early.
Employers participating in wellness programs with Amerihealth Insurance Co. of New Jersey in Mount Laurel can get slight premium reductions — up to 1 percent, said Paul Portsmore, vice president-health services.
So the insurer, which focuses on businesses with 50 to 500 employees, does not charge for wellness committees, health expos and onsite health assessments, said Portsmore.
Additionally, it offers discounts for services such as acupuncture and reimbursements for fitness-center memberships, weight-management programs and other efforts. Amerihealth also provides health coaches and online tools.
At UnitedHealthcare, "enrollment in certain wellness products and programs can reduce premiums anywhere from 5 to 15 percent," for employers, said Mary McElrath-Jones, a spokeswoman for the health insurer.
But insurers agree the key factor to making these programs reduce claims is senior management.
"The accountability of the behavior needs to be on the individual and the employer group," said Portsmore. "There's only so much an insurance company will be allowed to do."
Historic health care bill clears Senate hurdle
BY DAVID ESPO
The Record
WASHINGTON — Invoking the name of Edward M. Kennedy, Democrats united tonight to push historic health care legislation past a key Senate hurdle over the opposition of Republicans eager to inflict a punishing defeat on President Obama. There was not a vote to spare.
The 60-39 vote cleared the way for a bruising, full-scale debate beginning after Thanksgiving on the legislation, which is designed to extend coverage to roughly 31 million who lack it, crack down on insurance company practices that deny or dilute benefits and curtail the growth of spending on medical care nationally.
The spectator galleries were full for the unusual Saturday night showdown, and applause broke out briefly when the vote was announced. In a measure of the significance of the moment, senators sat quietly in their seats, standing only when they were called upon to vote.
Republican Sen. George Voinovich of Ohio missed the vote.
In the final minutes of a daylong debate, Majority Leader Harry Reid, D-Nev., accused Republicans of trying to stifle a debate the nation needed.
“Imagine if, instead of debating whether to abolish slavery, instead of debating whether giving women and minorities the right to vote, those who disagreed had muted discussion and killed any vote,” he said.
The Republican leader, Sen. Mitch McConnell of Kentucky, said the vote was anything but procedural — casting it as a referendum on the bill itself, which he said would raise taxes, cut Medicare and create a “massive and unsustainable debt.”
For all the drama, the result of tonight's showdown had been sealed a few hours earlier, when two final Democratic holdouts, Sens. Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas, announced they would join in clearing the way for a full debate.
“It is clear to me that doing nothing is not an option,” said Landrieu, who won $100 million in the legislation to help her state pay the costs of health care for the poor.
Lincoln, who faces a tough reelection next year, said the evening vote will “mark the beginning of consideration of this bill by the U.S. Senate, not the end.”
Both stressed they were not committing in advance to vote for the bill that ultimately emerges from next month’s debate. Even so, their announcements marked a major victory for Reid and the White House in a year-end drive to enact the most sweeping changes to the nation’s health care system in a half-century or more.
The legislation would require most Americans to carry insurance and provide subsidies to those who couldn’t afford it. Large companies could incur costs if they did not provide coverage to their workforce. The insurance industry would come under significant new regulation under the bill, which would first ease and then ban the practice of denying coverage on the basis of pre-existing medical conditions.
Congressional budget analysts put the legislation’s cost at $979 billion over a decade and said it would reduce deficits over the same period while extending coverage to 94 percent of the eligible population.
Wednesday, November 18, 2009
While Feds Debate, Small-Biz Health Care Rates Skyrocket
By: Carol Tice
Entrepreneur.com Daily Dose
The whole healthcare-reform debate hit home for me this week. I've been ignoring a large envelope that came from my health insurance agent about a month ago. They left me a sort of ominous-sounding phone message about it, too, but I hadn't had a chance to call back. You know how sometimes when you can smell something bad's up, you just want to avoid it? I was in that mode.
Then I started reading news stories about how small-business healthcare plans were all having their rates jacked up to the sky...and I finally got up the nerve to open the envelope. Then I about fell over.
I'm on a health plan through my local city chamber of commerce through my freelance writing business, for me and my three kids. When I signed up two years ago, I was paying about $450 a month in premiums. This year, that became $560 a month. Guess what they'd like me to pay for the same coverage next year? $840 a month. That's a more than 30 percent increase.
Apparently, it's not just me, though mine seems like it's top of the class for ridiculous rate hikes. The Poynter Institute's Al Tompkins reports the average hike is 15 percent--more like what I saw last year.
Obviously, I'm going to be looking for a new health care plan, and I gather I'm not alone. It'll be interesting to see if this small-business healthcare rate spike has any effect on the ongoing effort to create a national healthcare plan.
Are your rates going up? If so, what's your plan--suck it up, or look elsewhere? Cut benefits?
Does it change the way you feel about national healthcare reform? Leave a comment and let us know.
Obama Backs Mandatory Sick Leave Law
By ROBB MANDELBAUM
New York Times - You're the Boss
This news from our colleague Steven Greenhouse, a Times reporter who posted on the Economix blog. Swine flu, he writes:
has given momentum to Congressional efforts to enact legislation that would guarantee paid sick days to tens of millions of workers — although it is far from clear that such legislation will be enacted. Those legislative efforts received added momentum on Tuesday when the Obama administration backed the Healthy Families Act, which would guarantee seven sick days a year to workers in companies with 15 or more employees.
Separately, and a week earlier, Representative George Miller, the chairman of the House Education and Labor Committee, introduced temporary legislation that would require companies with 15 or more employees to guarantee five paid sick days when the company sends a worker home (or urges the person to stay home). Mr. Miller introduced that legislation, which would sunset after two years, the same day that Mr. Greenhouse reported in another story that a “lack of paid sick days may worsen flu pandemic.”
Not surprisingly, the leading small-business lobbies, like the National Federation of Independent Business and the National Small Business Association, are opposed to mandatory leave, even in the face of the H1N1 virus. ” The impetus behind this legislation is not sensible and lacks understanding of the complex dynamics of small businesses,” the N.S.B.A, wrote (pdf) to Mr. Miller. And: “it is unfathomable that Congress would consider legislation mandating additional costly requirements on small businesses.”
Sunday, November 15, 2009
When health insurance costs rise
What businesses can do:
• Make sure your broker has shopped around for the best price.
• See if you can reduce costs by offering a wellness program.
• Ensure that your broker is analyzing your claims to see where the costs and needs are. There may be a cheaper plan for that pattern.
• Consider cost sharing: increasing deductibles, copayments, employee contributions.
• Talk to other brokers to get different offers.
• See if low-income employees may qualify for state-funded care.
• Evaluate whether it would be cost effective to be self-insured.
Sources: The Employee Benefits Advisors Group; Singer Nelson Charlmers
The Record: In Chronic Pain
Thursday, November 12, 2009
Rothman supports health-care reform
By Susan C. Moeller, Senior Reporter
The Leader
(Nov. 12, 2009) — The U.S. House of Representatives voted for the historic “Affordable Health Care in America Act,” Saturday, Nov. 7, at approximately 11:30 p.m.
Congressman Steve Rothman, who represents the southern section of Bergen County, was one of the 220 legislators to vote for the bill, HR 3962. Another 215 logged “no” votes.
“This is probably the most important domestic policy vote I have cast in my 13 years in Congress,” Rothman stated in a press release after the vote.
“The vast majority” of the constituents who have communicated with Rothman “agree that the status-quo of our dysfunctional, wasteful and unfair health-care system is simply unsustainable,” the congressman continued. “While America’s present health system offers some of the world’s best medical care, ever-increasing millions of Americans are denied access to this care, because they cannot afford it.”
Rothman’s local listening sessions drew crowds of people with passionate opinions about health-care reform, both for and against.
The provisions of the bill will now be debated by the Senate.
A copy of the bill — 1,990 pages long — is available online at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3962ih.txt.pdf
Or by referencing the bill number at the Library of Congress’ Thomas Web site, Thomas.LOC.gov.
Tuesday, November 10, 2009
In chronic pain
By Hugh R Morley & Carol Fletcher
THE RECORD
As Congress debates the health care overhaul partly aimed at controlling costs, small businesses are facing a dramatic hike in the cost of employee coverage over the next year — squeezing employers already reeling from years of steady, often double-digit increases.
Insurance companies are seeking upward of 20 percent more to renew coverage, and as much as 40 percent in some cases, forcing companies to cut benefits or ask employees to contribute more, employers and brokers say.
Insurance companies say they are merely responding to increases in their own expenses, including a rise in patient visits due to fears over swine flu, and the ongoing escalation in medical costs.
The hike has left employers scrambling to cope with a cost they say is impossible to anticipate or control.
"It's insane," said Timothy P. Rose, president of Flyte Tyme Worldwide Transportation, a Mahwah-based limousine company.
He said the average per-person cost of covering his 180 insured employees jumped from $500 a month to $650 when the company renewed its policy with Aetna on Nov. 1.
Clifford Lindholm III, president of Passaic metal-products maker Falstrom Co., said his carrier recently raised the cost of covering single employees 17 percent, from $594 a month to $694. The cost of covering a family rose from $1,447 a month to $1,687, he said.
"We couldn't afford that," he said. "If I go to my customers and tell them I need to increase our prices 16 percent, they are going to tell me to jump in a lake."
Instead, he cut back on coverage for hospitalization — the company pays 90 percent of the cost now, instead of the 100 percent coverage of the past — and increased deductibles and copayments.
The surge in health care costs comes as the debate in Washington, D.C., over health care reform intensifies while lawmakers look for ways to provide coverage to tens of millions of uninsured workers and to slow the rate of cost increases.
Whatever the outcome, it will likely be too late to help businesses in the near term.
Last week, a Senate committee said it is investigating how health insurers price the coverage they sell to small businesses, sending letters of inquiry to UnitedHealth Group Inc., WellPoint Inc., Aetna Inc. and others.
Patti Goldfarb, owner of Ridgefield Park-based Employee Benefits Advisors Group, a broker, wondered if insurance companies are setting prices with one eye on the debate.
"I do think the carriers are taking their last shot at getting high rates before reform passes," she said.
One insurer, Horizon Blue Cross Blue Shield of New Jersey, rejected the suggestion. "That's not how we operate," said spokesman Daniel Emmer.
Other brokers and employees said recent premium increases are fueled in part by laid-off workers scrambling to get as many health benefits as possible before their policies run out.
"Folks who lose their employment are going to use their medical benefits … and maximize whatever value there is," said Adam Speck, who heads the Morristown-based brokerage and consulting business for Mercer, a global consulting firm. He said he believes that even employed workers are using their health benefits more, fearing they may soon be jobless and without insurance.
Faced with those kinds of pressures, insurers are driving a harder bargain, Speck said.
"They are being much more deliberate and less flexible in their negotiations," he said. "This is without doubt a more challenging renewal year than we have seen in years."
Companies with 500 or more workers surveyed in 2008 by Mercer said they saw a 6.2 percent increase in health care costs per person, and expected an 8.4 percent hike in their 2009 policies.
The results of a similar study conducted this year will not be released for several weeks. But Speck said that the companies he deals with, which tend to have 200 to 1,000 employees, are facing 20 percent increases, with some in the 30 percent and 40 percent range.
Singer Nelson Charlmers, a Teaneck-based insurance broker, also said its clients are seeing increases that far outstrip those of recent years.
Sean Abrams, an account manager, said that after a 19 percent hike a year ago, Oxford Health Plans is raising premiums 25 percent to 37 percent for companies with fewer than 50 covered employees that renew their policies in November.
"We're anticipating bigger increases for 2010," said Mark Shanock, Singer Nelson Charlmers' chief operating officer.
Emmer said Horizon Blue Cross Blue Shield is raising rates for businesses with fewer than 50 employees by upwards of 20 percent. One reason, he said, is rising out-of-network costs. Another reason, he said, is the fear of swine flu, which is driving patients to the doctor.
"If they got a cold or a sniffle in the past, they would normally have taken over-the-counter medication," he said.
At Aetna, spokesman Ethan Slavin said an "unexpected rise in medical costs" for New Jersey small businesses has affected policy prices, although he declined to comment on how.
Mary McElrath-Jones, spokeswoman for UnitedHealthcare, which owns Oxford, also would not discuss specific increases, but said the company expects to "continue to maintain steady pricing disciplines in response to prospective medical cost pressures."
Whatever the reason, the hikes have forced small businesses to look again for ways to cut costs.
Paul Gourhan, owner of Glen Rock-based PMW.net, a graphics design and branding company, said that until he cut his staff by half due to the recession he had six employees, but he paid half of them as contractors, in large part to avoid the cost of providing them with health care.
In addition, he has steadily cut benefits for his three staffers, slowing the annual growth in the company's health care bill, which otherwise would have grown at about 15 percent a year, he said.
In 2009, the cost would likely have risen by at least that much, but an employee in her 50s left and was replaced by one in her early 20s, he said.
"You have a young, single woman, who the demographics say is not going to get sick," replacing one with higher coverage costs, he said. So the company's overall health premium remained about flat, he said.
Last week, he received a notice from his insurer, Oxford, saying his 2010 policy would increase by 25 percent, taking the coverage for three employees from $1,416 a month to $1,761 each.
"It's obscene," he said, adding that he will consider whether to cut an employee to reduce his costs. "In an economy where everybody is cutting back prices to be competitive, and trying to bend over backwards to try and help their fellow businessperson, they are instituting a 25 percent increase."
"How am I going to find that?" he said. "With this economy, with everything the way it is, I am scraping by."
How small business fares under health-reform bill
By Kent Hoover, Washington Bureau Chief,
Denver Business Journal
Many small business groups oppose the massive health care reform bill that passed the U.S. House of Representatives late Saturday, contending it would raise insurance premiums for many firms and create disincentives for hiring new workers.
Some small business owners, however, support the legislation. They think the insurance market needs the bill’s reforms, such as barring insurance companies from denying coverage based on pre-existing conditions. Plus, they think providing a government-run option in new health insurance exchanges would bring needed competition to the insurance market.
The 220-215 vote on the House bill is the first step in the end game for health care reform. The Senate still must vote on its own version, and then the two bills must be merged for a final vote by each chamber. The legislation would then go to President Barack Obama for his signature.
This process could take weeks, if not months, to play out, but the House bill provides a starting point for small businesses to determine whether they would be helped or hurt by the legislation.
Here’s a look at some of the provisions that would have the most impact on small businesses:
Health insurance exchanges
The House bill would create a national insurance exchange where small businesses and individuals without coverage could shop for coverage. States could opt to offer their own exchanges or create regional exchanges.
These exchanges would become operational in 2013. In the first year, businesses with up to 25 employees could purchase insurance through the exchanges. That would increase to 50 employees in 2014 and 100 employees in 2015.
A government-run plan would be offered as an option in the exchange. This plan would negotiate the rates it pays to hospitals and other health care providers, instead of paying Medicare rates, which are lower than the rates that private insurers pay providers. The public plan’s costs would be covered by the premiums it charges.
By 2019, 30 million Americans would be covered through the exchanges, 6 million of them opting for the public plan, according to Congressional Budget Office estimates.
The exchange will “promote transparency and new choices,” said Kelly Conklin, who owns Foley-Waite Associates, an architectural woodworking company in Bloomfield, N.J. “It provides a competitive public health insurance plan that will give small businesses new leverage, drive down costs and inject new competition into the marketplace.”
Conklin serves on the national executive board of Main Street Alliance, a coalition of small business owners that supports the House bill.
In recent days, several Colorado small-business owners traveled to Washington to voice support for congressional health care reform efforts, including the public option.
The business participants were part of a pro-reform coalition assembled by advocacy groups, including Main Street Alliance, and labor unions.
The National Federation of Independent Business, which opposes the bill, supports allowing small businesses to pool their purchasing power for health insurance. It sees several major problems with the exchanges in the House bill, however.
Health plans that would be offered through the exchange would have to offer a minimum level of insurance benefits -- including behavioral health treatments and durable medical equipment -- that exceeds what’s now covered in many small business policies, said Michelle Dimarob, a House health care lobbyist for NFIB.
“It’s going to be more expensive that what small businesses typically are buying today,” Dimarob said.
All employers, even those not using the exchanges, would have to meet these minimum insurance standards by 2018.
Business groups also fear the public plan would undermine private insurance.
A letter to House leaders signed by 10 other business groups that oppose the House bill, including the U.S. Chamber of Commerce, said the public plan “will not operate on a level playing field and compete fairly if the government acts as both a payer and a regulator.”
Even if the public plan initially pays negotiated rates to health care providers, “soon there would be tremendous pressure for the new public plan to pay below-market rates, just as we have seen in Medicare and Medicaid,” the letter states. This would shift costs to private insurers and employees who are covered by private plans, it said.
Monday, November 9, 2009
House passes health care reform bill
CNN.com
Washington (CNN) -- The House of Representatives on Saturday night passed a sweeping health care bill by a vote of 220-215.
With the passage of H.R. 3962, the Affordable Health Care for America Act, proponents of health care reform took an important step forward, but turning the bill into law remains uncertain.
It's unclear when the Senate will vote on a version of the health care legislation debated in that chamber. If the Senate passes its bill, the House and Senate bills would have to be reconciled into one document and voted on again.
The House Democrats needed 218 votes to ensure passage of the bill. On Saturday, it appeared the vote would come down to the wire, as the intentions of some conservative Democrats remained unknown.
In the final tally, 219 Democrats voted for the legislation, and 39 voted against it.
Rep. Joe Cao (R-Louisiana) was the only Republican who voted in favor of the bill.
Read the House bill (PDF)
Democrats began counting down with eight seconds left in the voting period and erupted in a loud cheer when the hotly debated legislation was passed. Republicans in the chamber stood across the floor, some with their arms folded.
"Oh what a night," said House Speaker Nancy Pelosi in a news conference after the House adjourned its session for the night. She thanked President Obama and her colleagues who fought to get the bill passed.
The Republican National Committee released a statement after the vote.
"Today with help from their liberal House allies, President Obama and Nancy Pelosi finally got what they have been creating behind closed doors these past months -- a government-run health care experiment that will increase families' health care costs, increase the deficit, increase taxes on small businesses and the middle class, and cut Medicare," the statement said.
Earlier, the House passed an amendment to pending health care legislation that prohibits federal funds for abortion services in the public option and in the insurance "exchange" the bill would create.
The vote passed 240-194.
A second amendment considered by the House, introduced by Minority Leader John Boehner, which would have substituted several sections of the health care bill dealing with insurance, did not pass. Legislators voted against the amendment 258-176.
The first amendment, introduced by anti-abortion Democrats, bans federal funds for abortion services in the public option and in the insurance "exchange" the bill would create. Its consideration was considered a big win for them and for the U.S. Conference of Catholic Bishops, which used its power -- especially with conservative Democrats in swing congressional districts -- to help force other Democratic leaders to permit a vote that most of them oppose.
The prohibition, introduced by Democratic members, including Rep. Brad Ellsworth, D-Indiana, and Rep. Bart Stupak, D-Michigan, would exclude cases of rape, incest or if the mother's life is in danger.
Republicans strongly supported the measure.
The GOP accounted for 174 of the votes in favor of the amendment, with 1 Republican voting "present." On the Democrats' side, 64 voted for the measure, and 194 voted against.
Earlier Saturday, President Obama said members of the House of Representatives face the chance of a lifetime as they consider the legislation.
After a meeting with the House Democratic leadership, the president said he told lawmakers that "opportunities like this come around maybe once in a generation."
"This is their moment, this is our moment, to live up to the trust that the American people have placed in us," Obama told reporters in the White House rose garden. "Even when it's hard, especially when it's hard, this is our moment to deliver."
Small Employers Struggle to Offer Health Insurance
By John Tozzi, Businessweek.com
Unlike most small employers, Boeggeman, George & Corde, a New York law firm with offices in White Plains and Albany, pays full health insurance coverage for each of its 23 employees and their families. At least for now.
Premiums are rising so quickly that partner Richard Corde has been grappling for six years with whether to make workers pay part of the cost. In that time, the health-care share of the firm's total compensation budget has doubled, to 10%. When Corde went to his insurer, Health Net (HNT), to arrange a November renewal for the firm's' policy, he was given a 22% higher rate, an increase Corde says is typical. He has switched insurers at least three times to avoid such hikes. To keep the policy affordable this year, he agreed to higher deductibles for doctors' visits and prescriptions.
Even with the concessions, the firm will pay about 9% more this year—close to $200,000. "I don't know how many years of those kind of increases I can absorb," Corde says.
Washington lawmakers are trying to write legislation to contain health-care costs and expand coverage. But even if reform passes this year, any effect on the price of care won't manifest until 2011 at the earliest, according to an analysis by PricewaterhouseCoopers. Many small businesses, some closing the worst year (or two) in their histories, face hard questions about how—and how much—to pay to keep their employees and their families healthy.
Workers see ever-higher deductibles
In the past decade, the average health insurance premium for a single worker at a company with fewer than 50 employees went from $2,475 to $4,501, an 82% increase, according to data from the U.S. Department of Health and Human Services. Family premiums increased by 93% in that period, to $11,679. As costs rise, companies ask workers to contribute a greater portion of premiums: Employees at small companies that provide health insurance in 2008 paid more than twice what they did in 1999. Even adjusted for inflation, the increase is 63% for single coverage and 49% for family plans. At the same time, the percentage of small businesses offering coverage dropped from 47% to 43%, compared with 96% for companies with 50 or more employees.
Overall medical costs will grow by about 9% in 2010, according to the PricewaterhouseCoopers analysis. Many companies, especially those facing leaner demand, are buying less generous policies to keep prices in check and shift part of the cost increase to workers. "A company that maybe has a $1,500 deductible today might renew and get a $2,500 deductible," says Carey Wolf, sales manager for the small group health unit at online insurance broker eHealth (EHTH). "Businesses are realizing that maybe part of that has to be absorbed by the user by having a little bit higher deductible or a little bit higher co-pay."
Small businesses that want to continue to offer health benefits face limited options to control the cost. EHealth has seen many more companies shopping for new plans, Wolf says, which sometimes keeps premiums down, at least for a year, as competing insurers try to acquire new customers with attractive rates. But the money that supports ever-growing health-care costs must come from somewhere—higher premiums, deductibles, or co-payments.
"appalled by this entire process"
About three years ago, Hoglund Transportation, a family-owned school bus operator in Monticello, Minn., switched from paying half the premium for comprehensive coverage to paying the full cost of a high-deductible plan offered by the same insurer, Medica. The cost to the company was about the same, leaving Hoglund paying over $44,000 annually for its six covered employees. But Medica quoted a 26% increase at the end of September, which would raise the premium to $55,800, according to Kari Kounkel, who runs the business her grandfather started in 1947.
Kounkel says she will discuss three options with her employees: Keep the current policy, but ask them to start paying part of the premium; increase the deductible from $5,000 to $9,000; or agree to a plan where employees would pay 20% of their medical costs even beyond the $5,000 deductible—which could cost someone with a catastrophic illness many thousands of additional dollars. She doesn't like any of the choices. "I've just been appalled by this entire process for the past two years," she says.
She hopes to blunt future increases by finding a creative solution, such as giving her workers incentives to improve their health—discounted gym memberships, for example. But like most small businesses, health insurance takes up an increasing share of Hoglund's compensation spending. Few see better alternatives ahead. Kounkel doubts that reform will really curb premium hikes and she fears that her company could be forced to provide even costlier coverage than its current high-deductible plan.
For his part, attorney Corde says his firm will pay the higher premiums this year without asking workers to contribute. "I don't want my employees in this economic environment to try to save money and not carry health insurance," he says. But he's not sure how long the firm can keep it up. "I don't know what next year's increase in premiums is going to be, or the year after that, or the year after that."
