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Posted: June 16, 2011

Commentary: Help for high health care costs

Colorado small businesses now have some peace of mind

John Arensmeyer

On June 1, Colorado became the first state in the nation to enact bipartisan legislation setting up a health insurance exchange. Gov. John Hickenlooper signed SB 200-a bill that creates Colorado's Health Benefits Exchange-into law, and now small business owners can have some peace of mind knowing that relief from high healthcare costs is on the way.

While not a perfect bill, SB 200 has the components necessary to ensure greater choice and competition in the market, and more affordable health insurance plans for the state's small businesses. However, it can be improved upon. One way they can do this is to make the exchange an active purchaser so it can negotiate lower rates for all of the small business clients.

This model of an exchange enables the administrators to do everything that can to get higher-value, lower-priced plans for their customers. Besides being able to negotiate for better rates, it provides greater transparency and oversight so consumers get the best bang for their buck. This should be the first modification and can be done through the regular legislative process.

The Health Benefits Exchange is one of the most important provisions of the Affordable Care Act for small businesses. This marketplace will allow small businesses to band together to purchase insurance at a lower rate. Once it is fully up and running in 2014, Colorado's small businesses and other consumers will be able to shop online, over the phone or in person to compare plans. It's a one-stop shop and gives entrepreneurs the ability to find the health insurance policy that best meets their needs and budget.

Nora Hill is the perfect example of a Colorado entrepreneur who needs a strong exchange with active purchasing power. She owns a chocolate and ice cream shop in Fort Collins, but has been unable to find an affordable policy for herself and her employees due to high costs and limited options. An exchange that has the power to negotiate for low cost, high-value plans would open the doors to health plans that Nora and so many others currently find closed to them.

There's substantial evidence to suggest that the exchange will in fact help rein in costs and expand access to health insurance for entrepreneurs like Nora. A study released by the Urban Institute in January found that total healthcare spending by small firms would decline by 8.7 percent, due mainly to cost savings in the exchanges. It also found that the average employer contribution per employee would decrease by 7.9 percent for small businesses. That's a huge chunk of cash for entrepreneurs struggling to keep their doors open, wanting to expand their company or needing to hire a new employee.

Now that Gov. Hickenlooper has signed SB 200 into law, Colorado's policymakers must make sure the health benefit exchange serves its function, which is to lower healthcare costs and increase coverage for small business owners and their employees. Making the exchange active will be achieve this.

Additionally, it's imperative that small business owners be appointed to the 12-member exchange board so the small business perspective can be included in the decisions this governing body makes. Laws can and, when possible, should be improved upon. Colorado is already off to a good start by moving quickly to implement key components of federal healthcare reform. But they have the opportunity to make it even better, and we hope they seize it.

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John Arensmeyer is founder and CEO of Small Business Majority, a national nonprofit organization founded and run by small business owners. Contact John at or 866-597-7431

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Readers Respond

Hey Vicki, Give me an email at and I can try and help you. I am a broker of 18 years an welcome the opportunity to assist and inform individuals and small business owners that there are options and alternatives available. By Dewey Remington on 2011 06 16
It seems that most business people have this figured out. I'm proud of them. this is just another scam by government to make more government. Good analysis by most. I agree with John on the broker deal. I've used many over the years and when they take you for granted get a new one. get WRITTEN bids By John on 2011 06 16
Vicki -- You need to talk to a good business insurance broker. If you email me at, I'll forward all the info about my broker who is pretty good. If you have an actual business that files actual business tax returns and has a business location, getting insurance is not all that difficult...or at least it wasn't for us when we started. But an insurance broker is the person to answer those questions in detail. By John Heckers, MA, CPC, BCPC on 2011 06 16
This whole article is hype with few facts. SB200 guarantees 1) That Colorado bureaucracy gets more of that free federal money for setting up an exchange that complies with Obamacare. 2) That an unelected board be assembled that will design and implement an exchange. That board cannot be voted out. 3) That our private medical information can be shared with other exchanges and the federal government. Colorado HB10-1330 provides for a medical dossier on each of us. The stimulus act established the federal medical dossiers. There is virtually nothing in the bill that guarantees lower costs, better service, or anything else beyond what I mentioned. To attribute all those fine advantages is downright dishonest. How will this exchange be financed - by higher and higher premiums? People can already compare and buy at very good prices online. Can anyone tell me what government does well? By Lis Smith on 2011 06 16
Getting past the vitreol, I have one question that I wish somebody could answer. Yes, I own a business, but I have no employees 'cept little ol' me. So, what options will I have for myself? I know hundreds of other business owners like myself who are asking the same thing. By Vicki Felmlee on 2011 06 16
I'm continually amazed that ANYONE can believe that a government program can "lower" prices. Lots more "administrators" on the government dole that are going to save us money. It's never worked and won't now. Our ONLY chance is to get obamacare overturned. My insurance has ALREADY gone up FORTY % strictly because of obamacare. Now if the government committee that decided that costs would go down would guarantee those results, I'd be interested; otherwise not! This is just another example of our socialism. If this "exchange" deal is such a great thing, then why didn't we allow it long ago by allowing groups across state lines which would have done the same thing without more and more government expense. This will be a disaster. mark my words.. By John on 2011 06 16
"Colorado is already off to a good start by moving quickly to implement key components of federal healthcare reform." BS. Ultimately, the Colorado exchange bill was about nothing more than grabbing a piece of federal money to expand bureaucracy. There was nothing in the bill describing anything like is described in this article. Shopping online and using brokers is, today, more informative than anything that will come out of this. By Dick Murphy on 2011 06 16
John - As a health insurance broker, this, as with the whole exchange "thing" is very frustrating. The exchange does not inform individuals as to the options they do have. In addition, they do not explain the different types of plans available, and neither do you. Brokers already do what the exchange is proposed to do. "pooling" the risks of individual and small groups, and negotiating as large groups can do not decrease premiums as you "experts" think. Large groups do not get tha much of a savings over all other plans. All this is going to do is increase costs in the end as only unhealthy people will qualify. This is just another example of how decisions are being made without involving the people who can really help. I have been in contact with Loren Meinholz of Gov. Hickenlooper's exporatory panel, and he could not give me answers that would explain how the exchange is better than the assistance brokers provide. It is apparent that your small business owner either does not use a broker, or has a bad one in that there are many options and alternatives available in her area. In addition, most companies are offereing multiple plans within a group's coverage to better assist each employee with coverage that fits both benefit needs and budget. Please educate yourself before promoting this type of legislation. Sorry for ranting, but this gets very frustrating. By Dewey Remington on 2011 06 16
John ---- Health insurance is incredibly confusing to most entrepreneurs, including me. An article going through EXACTLY and precisely what the new law does and how the exchange works would be a great service. To those who are in insurance or who "get" the whole insurance thing, it is doubtlessly transparent. But I would prefer to read Homer in Greek than read an insurance policy and try to make sense of it. I read some Greek, but don't read loophole. By John Heckers, MA, CPC, BCPC on 2011 06 16

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