No fix for businesses’ top worry?

By Courtney Sherwood, Columbian freelance writer

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Paying for health insurance is the most pressing frustration at many Clark County businesses, beating out taxes and government regulation.

And it’s little wonder. Though Washington rate data are not available, in Oregon — where several of Clark County’s largest insurers are headquartered — small businesses will face average rate increases of 13 percent the next time they renew their policies.

It’s tempting to blame these rate hikes on the federal health reform that passed in March, but the big changes that the law promised don’t go into effect for three years.

Furthermore, the latest rate hikes are much like those small businesses faced in the months before reform passed, when area health insurers were raising rates about 12 percent on average. From 2005 through 2009, premiums climbed by more than 50 percent.

The topic of the cost of health care coverage rose to the top of the list when trade group Impact Washington asked Southwest Washington manufacturers what concerned them the most. More than 71 percent said they were “very concerned” about health costs, the poll showed.

The federal Affordable Care Act probably won’t do enough to address their concerns. The Congressional Budget Office estimates that the reform will reduce U.S. health care spending by 0.5 percent by 2030. About $1.1 trillion of the savings will go to the government, not businesses.

Companies committed to insuring their workers have been forced to get creative. They’re switching to high-deductible plans, raising co-payments or asking workers to pay a bigger share of premiums.

But many industry watchers are skeptical that these measures will be enough. As baby boomers age, the cost of taking care of a larger group of older people will far outweigh that of care for the young. Advances in medical technology mean that doctors are treating diseases that there were no cures for a few decades back — and these new treatments cost money. As obesity rates climb, more people are developing diabetes and heart disease.

It’s tough to imagine how we can possibly change these trends. Nobody has yet figured out how to make America skinnier. We can’t stop baby boomers from aging. We are not going to stop researching new cures for disease or buying the best available medical equipment.

The Association of Washington Business will be watching carefully to see how the governor and Legislature attack health insurance issues in the coming weeks and months.

The AWB wants state leaders to pass laws to make state health care data more accessible to consumers and to encourage competition among insurers so people and businesses can make informed decisions about how to spend their health care dollars. It also wants malpractice reform — which it has failed to win in the past — and more support for programs that keep people healthy, which could reduce the need for treatment.

Something needs to be done, but with legislators focused on a $5.7 billion 2011-13 budget shortfall, it’s less clear that they’ll act on the one issue many businesses find most pressing.

Courtney Sherwood is The Columbian’s business and features editor. Reach her at 360-735-4561 or courtney.sherwood@columbian.com.