Controlling healthcare costs by offering more affordable basic health plans, improving quality and reforming the tax system is the best way to increase the number of people with health insurance, New Jersey Business & Industry Association Vice President Christine Stearns said today in advance of National Cover the Uninsured Week .

Cover the Uninsured Week is a national project of the Robert Wood Johnson Foundation that will take place May 1 through May 7, 2006.  It is designed to highlight the fact that nearly 46 million Americans do not have health insurance and to encourage policy makers in Washington , D.C. and all 50 states to address the problem.  Stearns is NJBIA's point person on health insurance issues and will be available for interviews prior to Cover the Uninsured Week and from May 2 to May 5.

As the largest state-level employer association in the nation, NJBIA represents more than 23,500 member businesses, most of which struggle with the high cost of providing health benefits to their employees.  Overall, 5 million New Jersey residents get their health insurance from private-sector employers. 

But hyper-inflation in health insurance is pushing those costs beyond the reach of many businesses, especially small businesses.  The cost of health insurance is perennially listed in NJBIA's annual Business Outlook Survey as the number one problem businesses face.  According to NJBIA member companies responding to its annual Health Benefits Survey, the cost of providing health benefits to employees has exploded, increasing by 55 percent in just four years (2001 through 2004).  In fact, for the first time in the 12-year history of the survey, the number of employers providing health benefits to their employees dropped significantly, from 94 percent in 2003 to 90 percent in 2004.

“When it comes to providing health insurance to employees, the formula is simple: cost equals coverage,” Stearns said.  “Employers want to provide insurance and know they need to offer it to attract good employees.  But as costs explode, rising at rates two and three times higher than regular inflation, employers struggle to be able to afford the premiums and some have no choice but to cut back on coverage, require more employee cost sharing and sometimes, drop it altogether.”

Stearns said that NJBIA has been pushing for comprehensive health insurance reforms that will make it easier for employers to provide health benefits to their employees.

“ New Jersey 's health insurance system has identifiable flaws that can be corrected,” Stearns said.  “Our goal should be to build on the successes of the employer-based system to expand coverage while improving the affordability, quality and value of coverage for all.  State lawmakers can do much to accomplish these goals by refusing to enact costly new coverage mandates, injecting more flexibility into the state's regulated insurance markets, and giving employers who do provide coverage a State tax benefit.”

NJBIA's health insurance reform plan includes:

• Reforming the Small Employer and Individual Health Insurance Markets. Any plan to reform the state's health insurance system should target employers who purchase their health insurance through the state's regulated Individual Health Coverage Program (IHC), which covers sole proprietors and the Small Employer Health Benefits Program (SEH), which covers businesses with two to 50 employees. 
• The state should allow employers in the regulated market to have more flexibility in designing their own plans; offer “basic” health plans that are more affordable; change the 75 percent participation rule for small companies; require insurance companies to participate in both the individual and small group markets; reform the rating of the individual market ; and create a reinsurance program to cover catastrophic claims above a certain dollar amount.
• Improving the quality of healthcare in New Jersey.  Cost and quality go hand in hand.  Medical errors, duplication of tests and a lack of information readily available to the consumer add costs to the system.  New Jersey should encourage implementation of health information technology (Health IT) such as a computerized health records system and electronic prescriptions.  Health IT could create greater efficiency and quality by transforming healthcare from a largely paper-based system to an electronically integrated network of patient care.  Use of e-mail prescriptions by physicians and pharmacies could cut down on medical errors by automatically screening for duplicate prescriptions and negative interactions as well as informing doctors of less expensive generic alternatives. 
• Promoting greater transparency in healthcare. Employers and consumers need ready access to information to compare healthcare plans and providers on the basis of cost and quality of performance.  This should include posted fee schedules for commonly billed procedures, NJ Department of Health and Human Services report cards on quality and more reporting on pricing discrepancies among prescription drugs.
• Advancing value based purchasing (a.k.a pay-for-performance).   The "pay-for-performance" movement—rewarding physicians and hospitals for delivering high-quality care—should be advanced.  This trend should be considered for New Jersey 's State Health Benefit Plan (SHBP) and FamilyCare program. 
• Holding the Line on state-imposed health coverage mandates. New Jersey should use the Mandated Health Benefits Commission to review the cost and necessity of proposed new healthcare mandates and expand the commission's mission to include a review of existing coverage mandates.  Through the years, the Legislature has passed dozens of laws mandating costly insurance coverage of previously uncovered medical treatments and services.  Often these mandated benefits are not based in good medical science, but rather are adopted based on emotional appeals of affected parties.  These mandates add an estimated 20 percent to the cost of health insurance (about $1,500 per employee).
• Providing direct state tax incentives . Individuals and small businesses should be allowed to deduct the full cost of health benefits from their state income taxes or they should be given a state tax credit   Such tax benefits would help employers afford health insurance.  Additionally, employees participating in employer health plans should be allowed to pay cost-sharing premiums on a pre-tax basis.