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Boulder Bicycle Lugged

Thursday, June 29, 2017

Obamacare Repeal Threatens Boulder Bicycle

Its been a very long while since I've posted here.  And this post is low on bike content.  But its important.  I hope to start posting fun bike related info very soon.

Business has been very good for Boulder Bicycle the past few years.  The Rando biz is down, but vintage is way up for us.  We're having fun and despite not having regular shop hours lately, we've been working more than full time filling orders and doing the best we can to keep up with inquiries.

As some may know, I'm doing some work as Research Team Leader for the Colorado Foundation for Universal Health Care.    Of all the challenges that face Boulder Bicycle as a small business, the lack of affordable health coverage is most concerning.  

The following letter I wrote was recently distributed by the foundation.  Please don't fear - Boulder Bicycle is on very good footing for now.  But I am concerned.  For everyone who enjoys the benefits of a small business owner, I urge you to contact your legislators and let them know your concerns.  If you tend to lean right, than at least advocate for a change to a system that lessens the market imperfections in the health care industry and which will bring down costs.  The current proposed legislation does nothing of the sort.  



ACA Repeal Threatens My Business

By Michael Kone


I am a small business owner and I’m scared. If the ACA is replaced, our family’s health insurance is likely to become even less affordable. My wife and I each own a small business. Provisions in the replacement bills may force either my wife or me to shut our business and find employment with less costly large-group health insurance.

Our family earns just enough that we are ineligible for subsidies. About one-third of our income goes to pay for health insurance and related costs. The proposed ACA replacements will allow insurers to raise premiums for older workers like me, which could make the cost unbearable.

But I fear that it could get much worse. Despite arguments from the opposition, the ACA was very well thought out. It imposed an individual mandate so that everyone, especially the young and healthy, would pay into the system so they could have affordable coverage when they become older or less healthy. The proposed legislation eliminates the mandate. Folks may then put off purchasing insurance until they are more likely to need it, which will increase premium costs for those with coverage.

Because “more affordable” health insurance is tied to larger-group employment, the ability to grow my small business is severely limited. A few years back, I was in discussions with someone who I considered a potential dream business partner. He was familiar with my business, had perfectly matched management experience, and a vision to grow my company. His salary requirements were flexible, but there was no way that my small business could afford to find coverage to match what he received from his current (larger) employer. And so I lost this opportunity.

As a business owner, I understand the power of the free market. My business is engaged in a constant struggle against larger mail-order companies that aggressively compete on price. But the current repeal measures do nothing to harness market power. There is nothing in the repeal effort to increase price transparency and no new mechanisms to empower health consumers to seek out less costly providers. What the repeal effort does accomplish is to provide huge tax cuts to the very wealthy. Once the tax cuts are fully implemented, 40 percent of the tax savings are expected to go to the top 1 percent!

I constantly ask myself: Do my customers get a good value for their hard-earned money? Based on what they tell me, I believe that they do. Can I say that about my family’s health care expenditures? Not even close. I’m paying into a system that consumes roughly 17 percent of our nation’s GDP. But in Japan, which has a relatively older population, the share is about 10 percent.

Not only do I pay into a system that I feel is overpriced, but I’m paying into a system that leaves many without adequate health care. And the proposed repeal measures make this bad situation much worse by removing the ACA safety nets that so many have thankfully started to rely on.

I hope for the day when a health care system emerges in our country that takes care of everyone. Currently we pay too much and we get too little. And many folks have no access to care at all. I dream of a single-payer system focused on providing health care rather than creating profits. In the meantime, I hope that our legislators preserve the ACA and the gains we’ve made so far. My family, my community, and my business depend on it.

2 comments:

  1. Having been an independent contractor for over 35 years, I have never thought about the impact of health insurance costs...until now. During the past 8 years we saw our top of the line health insurance cost go from $575/month to $2105/month! This caused me to rethink what I'm doing since we are relatively healthy (knock on wood). I wound up taking a full time job (1st one in over 35 years) because of this. Our health insurance system is broken. I keep using the word insurance because we are a responsible family and believe in undertaking a certain amount of risk, the kind of risk one takes when getting insurance...for anything. If we wanted health care, we'd expect something different. Our society is filled with too many people who don't even think about their own health. Heck, if they don't care, why should I? Why should I pay towards someone's health care when they constantly eat garbage and wind up with diabetes and become obese and suffer from all the ill effects those things bring. What happened to personal responsibility? What happened to health insurance? If the system is to be fixed, the problem(s) have to be stated. How many reading this ask how much the cost to repair their car will be? How many look at the price tag on a pair of pants or even cycling shorts before they buy? Do you do any comparison shopping? If you need a lawyer, you most likely ask what the hourly rate is. Similarly, when you bring your bike to a shop, you ask how much they charge BEFORE you buy. An accountant will tell you how much their hourly rate is and the computer repair facility post their prices. In the medical profession, I have never once seen a rate posted for a service...until you get the bill. I believe that the medical and dental profession should be forced to post their fees for the services that they provide. For some who believe in HSA, this will be a big help. Insurance companies will tell one doctor, hey, your competition down the road charges less so we're going to pressure you to charge less. And when the more expensive doctor starts losing business, you had better believe they'll lower their rates.

    The ACA is not affordable insurance. Perhaps it is affordable for health care, but I don't want that.

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  2. The "problem" is that before the ACA things were even worse. All the market failures you describe were causing health care costs to skyrocket. Under the ACA, the rate of health care cost increases declined.

    If the ACA is repealed, many people, including many who strive to take good care of themselves, will be made worse off.

    In an ideal world, I'd like to see a single payer system that significantly increases market competition and can bring down costs. In the republican plans (and democratic led efforts as well) there is little discussion of empowering consumers to seek lower cost services.

    So your exactly right for pointing out deficiencies in the system. But those problems were present before the ACA and its repeal without a reasonable replacement will force many to suffer in a market with terrible imperfections without the protections that the ACA provided.

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