Small businesses and self-employed people have struggled with increasing healthcare costs for as long as I’ve been in practice. We had double-digit cost increases in the late 1980s that triggered me to focus on this issue as a core of my work for the next three decades. But the important point is that we always found a way to cope. Managed care, cutting back benefits, shifting costs, tax credits and tax deductibility have all played a role in helping us to manage in this long period of spiraling health care costs. Our strategies have been effective, until now, in allowing us to cope with healthcare cost escalation in an otherwise unsustainable environment.
Now here we are in late 2016, and it seems that we are losing ground in this health care expense battlefront. At the same time the Affordable Care Act (ACA) has stripped away the remaining weapons that could otherwise be used by small businesses to help us control costs.
I conclude, like many others, that the impact of cost increases on the horizon – now legislated into the system by ACA- are unsustainable and will soon cause our current health care finance system to crash. Following that collapse, I also conclude that single-payer, government-run health care financed by higher taxes is the inevitable next phase that will be considered. In fact, that consideration may be closer than we think.
Colorado has a ballot initiative on November 8 called amendment 69 that is designed to test the water for such a system. It would allow the state to opt out of ACA and replace it completely by a government-run health care system. Nobody denies that the proposed plan will limit care options and increase taxes. Some even argue that this was the predicted and intended consequence of ACA policymakers from the beginning. We expect this Colorado initiative to fail in 2016. But that doesn’t mean that the issue will go away. As the financial pain of Obamacare continues to spread there will eventually be more support for a replacement system. This is only an early vision. More will follow. For now, it only makes sense for us to consider the type of healthcare arreangements that will eventually dominate our system.
In the meanwhile, our challenge is to deal with health care costs here and now. The tools and strategies are limited. The most effective strategy will vary from business to business, and from person to person. I expect that as a small business health care strategist, I will have more conversations on this topic than any other in the coming year. These conversations will almost always focus on 1) using available resources, 2) manage worst-case risk and 3) see the big picture.
How do we navigate from the health care system of today to the health care system of tomorrow with the least damaging effect? How do we transition from Obamacare a more sustainable plan? The decisions that you make for you and your business will play the largest role in answering that question. A bibliography of more topics in this discussion is compiled on my web site.