NASE Blogs

Health Reform’s Bait and Switch: "If you like what you have, you can keep it!" [Commentary]

Sep 30, 2009
Posted by Kristie Arslan - The infamous bait and switch tactic is alive and well here in Washington D.C., and I am not referring to area used car dealers but rather the halls of Congress.

We have all heard the President and Congressional leaders say over and over, if you currently have health insurance and you like what you have, you can keep it. In fact, we are told that health reform for the numerous uninsured Americans will only help lower the costs for your current health plan and protect you from the tyranny of the insurance companies who can drive up premiums or drop your coverage at will.

It’s true that reform will offer consumers with insurance increased protections from unpleasant insurance industry practices. Not so true that you will be able to keep what you have, especially if you’re one of the over 22 million self-employed Americans needing financial assistance to afford health coverage.

BAIT: Can’t afford health coverage? How about a tax credit!

Finding quality, affordable health coverage is not so easy for the self-employed. In a February 2009 survey, we found that over 70% of NASE members had been uninsured at some point in their lives, primarily due to their inability to afford coverage.

With cost being key for the self-employed, health tax credits are the only item in all three major reform bills (Senate Finance Committee, Senate HELP Committee and House Tri-Committee) that provide actual, bottom line cost relief on health coverage for the self-employed.

To figure out how much help you would get to pay for health insurance under the major reform proposals, please visit Kaiser Family Foundation’s Subsidy Calculator.

Mind you that these tax credits are not available to all, but rather only those who fall below certain income levels. Furthermore, the amount of credit is offered on a sliding scale so that those that make more get less help to pay for health coverage. Yet, with the average household income of an NASE member being $62,500, a good number of our members would likely get some help from the tax credit.

SWITCH: Congratulations, here is your tax credit, oh wait…I’m sorry you can’t use the tax credit for your current insurance plan. But I have a great deal for you, try one of these health plans and I will throw in the tax credit for no additional charge.

In an effort to incentivize participation in their new insurance pools known as the Exchange, the Gateway or SHOP, policymakers have stipulated in each of the reform bills that the proposed tax credits will only be accessible for individuals, families and small employers that purchase health coverage through these new pooling mechanisms which will be set up by the government or states.

For all you Americans out there, especially self-employed and micro-business owners, who like their health plan, you are out of luck. Sure, you can keep what you have, as long as you aren’t looking for any help in paying for your escalating health costs.