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In last week's State of the Union, President Barack Obama made it clear that he intends to continue with his health reform agenda. His opposition will no doubt continue to push for repeal. But are repeal proponents standing up for consumers, or are they standing up for the health insurance industry?
Talking points from each side often don't tell the whole story, so New Jersey Public Interest Research Group turned to the facts in our new report, "The Cost of Repeal: Examining the Impact on New Jersey Consumers and Small Businesses of Repealing the New Federal Health Care Law."
Using official research, data and projections from independent sources, we found that repeal would have harsh consequences for consumers and small businesses in New Jersey.
In the absence of cost-saving reforms to improve the efficiency of delivering and paying for health care services, the cost of employer-sponsored coverage will go up. If you get your coverage through your employer, the cost of your insurance could jump by $3,000 or more per year by 2019.
For the 593,900 New Jerseyans who don't receive coverage through their employer, rates for the same coverage they have now will increase by as much as 20 percent by 2019. In addition, those on the individual market will lose their insurance affordability tax credits, further increasing the financial burden of health care.
Repeal would be particularly painful for New Jersey's 163,000 small businesses. The Princeton Design Guild, a small Princeton-based architecture and construction firm, opposes repeal and fears the cost of repeal will punish the 25-year-old company. In general construction, where employees are exposed to environmental and weather hazards on a daily basis, it is critical to be able to provide health care for employees to maintain their viability. Running a small business is tough enough in this economy without worrying about keeping your employees healthy.
If health care reform is repealed, many small businesses will be forced to choose between their employees' health and their bottom line. In order to keep their businesses viable, and keep project biddings as tight as possible, owners may be forced to sacrifice the insurance that helps keep employees and their families healthy.
With a staff of 12, the Princeton Design Guild already spends $52,000 a year providing health insurance. With small businesses across the state facing similar high costs, repeal would remove two big incentives to provide health care to employees: tax credits to offset escalating costs and a statewide exchange to provide bargaining power.
The process of moving towards a better national health care system is just beginning, and we can't let Washington's intensely partisan health care debate spill over to New Jersey as the governor and state legislators consider key implementation decisions. Our state and federal leaders should look for solutions that hold down costs, not increase them.
We recommend a set of proactive policy changes, on which supporters and opponents of last year's health care law should be able to agree. These include:
- Using the substantial authority the state has under current law to design a health insurance exchange that is adapted to meet the needs of our state's markets, consumers, and businesses.
- Taking additional steps to contain health care costs, like using information technology to let doctors access the latest treatment research right from their patient's bedside.
- Cracking down on balance-billing, a practice whereby hospitals or providers accept payment from your insurance plan, but then charge you additional amounts above and beyond the usual co-pays and cost sharing.
In today's economy, the last thing that New Jersey consumers and businesses need is an increase in health care costs. Repealing a law that protects our health and encourages economic growth would be wrong. New Jersey's elected leaders should stand up for consumers, not the health insurance industry, and oppose efforts to repeal federal health care reform.
Gideon Weissman is a NJPIRG program associate and Kevin Wilkes is the owner of the Princeton Design Guild and president of the Princeton Borough Council.
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