Our Man in Arlington

Last Thursday, Lieutenant Governor Tim Kaine came to Arlington to conduct a roundtable discussion of the rapidly escalating cost of health insurance coverage for employees of small businesses in Virginia. The meeting was held in the George Mason Law School by the newly formed Lieutenant Governor’s Commission on Small Business Health Care Costs, and hosted by the Arlington Chamber of Congress.

Arlington Delegate Bob Brink, a recently appointed member of the commission, sat at the head table with Kaine. Brink came to the commission with the benefit of six years experience on the General Assembly’s Joint Commission on Health Care and is one of the General Assembly’s leaders in health care issues.

The commission is bi-partisan and broadly-based. It consists of small business owners and employees, labor leaders, lawyers, doctors, insurance company executives, and state and local elected officials. The Arlington meeting reflected this mix. It consisted of several Chamber of Commerce executives, small business owners and employees, doctors, insurance company executives, local officials, university executives, and several just plain citizens interested in health care and insurance issues.

Kaine opened the meeting with a clear and concise description of the issue – rapidly escalating costs of health insurance for small businesses and their employees. He pointed out that one in seven Virginians lacks health insurance. Three out of four of those have jobs, many of them in businesses of ten or fewer employees.

Far fewer small businesses carry health insurance for their employees (67%) than large businesses (98%), almost exclusively because of the high, and ever-escalating, cost of health insurance. In an economy where almost all Americans receive their health insurance through their employers, this is a very disturbing figure.

Annual double-digit increases in health insurance premiums negatively affect small businesses in many ways. Obviously, if the businesses opt to keep the insurance, the higher costs eat into their profit margins at a rate greater than their larger counterparts. At the other end of the scale, if the business feels compelled to drop health insurance for its employees, it becomes very difficult to keep their most competent employees. In between the employees largely feel the pinch because the small businesses are forced to pick up a smaller portion of the tab.

It is much easier to describe the problem than it is to propose viable solutions. One of the most consistently mentioned “solutions” would be to allow small businesses to joint together to create larger pools of insurees. Larger pools (the federal government is probably the largest) reduces the overall risk, and hence prices, for insurance company, helping to make health insurance more affordable. Another participant pointed out that Vermont, under governor Howard Dean, established a basic health insurance system for 90% of Vermont’s citizens financed by increased alcohol and tobacco taxes; poetic justice, perhaps, but unlikely of passage in Virginia.

General provision of catastrophic insurance was also discussed. Arlington doctor Thomas Connally said this was not the answer, however. People who hold catastrophic insurance tend to ignore treatment short of a health catastrophe. He emphasized that we need to get people into the health care system before the catastrophe.

Many people spoke, outlining the major problems faced by small business and offering a host of solutions. This meeting, combined with others the commission is holding throughout the state, promises to provide a solid foundation for the deliberations and recommendations of the commission. The overall problem, however, is beyond the state to resolve. While Virginia can, and I hope will, take many steps to alleviate the situation, the real answer must come from the federal government. Don’t hold your breath.