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Health Care Reform: Tackling The Tough Questions

The biggest problem with health care is being able to afford it. Will Health Care Reform mean savings in the long run for small businesses and their employees?  An audience of local business owners, CEOs and HR representatives heard from the experts Tuesday morning, during a WWJ Newsradio 950 Business Breakfast at Lawrence Tech University.Panelists said there's no way of telling whether the cost of health care will go down, given the scope and political pressures that will impact reform. 

Kirk Roy of Blue Cross Blue Shield said it will be a work in progress. "There will be intervention to shape things that are working, fix things that are not working, as we go over time," Roy said.

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Sitting in the audience, accountant Robert Barnham told WWJ's Ron Dewey he expects higher administrative costs to be passed along to customers, "Our overhead will go up, our costs will go up, and so will consumer costs. But we have several months to see what shakes out," he said.

What part of health care reform has the biggest impact? One provision of health care reform mandates 80 cents on every dollar be spent on claims, 20 cents on administration.

Ken Ross of the Michigan Office of Financial and Insurance Regulation says insurance companies will make every administrative penny count.

"Because you want to fit everything in there that they can, and not have that  flop into the other bucket," Ross said.

"Because, to the extent that you don't make that ratio -- that 80 cents on the dollar goes out to pay claims -- you have to give refunds back to the people who are paying the premiums. And insurance companies don't want to do that," Ross said.

CPA Tom Mulvihill of Rehman  Health Management Strategies said more administrative duties will have some business owners looking for the aspirin.

 "Going forward starting in 2012, you're going to have to report to the IRS any payment you make to any supplier over $600, so its going to be a big headache for small business," Mulvihill said.

Small business owners will see tax incentives for providing health care, while larger employers will face higher tax burdens if they don't.

 (Copyright 2010 WWJ.  All Rights Reserved.)

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