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Expanding Health Insurance Coverage in West Virginia
Out of 1.4 million non-elderly West Virginians, 300,712, or 21
percent, have no health insurance. Ten percent of children are uninsured.
Forty-seven percent living in families headed by a full-time, full-year
worker are uninsured, as are 32 percent of workers employed by a firm with
less than 25 employees. Finally, 54 percent of families with incomes below
$20,000 are uninsured. Recently, Blue Cross/Blue Shield, the Employee
Benefit Research Institute, and the Consumer Health Education Council
conducted a survey of small employers to determine why insurance levels
were so low. In that survey, they found that many small business owners
were simply unaware of valuable insurance options to which their employees
were entitled. Together with the existing tax laws and other rights of
small employers, West Virginia is in a position to fight the growing
numbers of uninsured people in our State.
The survey showed that levels of health insurance among employees
could be raised by increasing employers’ awareness of helpful federal and
state programs. According to the survey, many small employers did not know
about new rights granted to small employers through state and federal
legislation. For example, 67 percent of these employers were unaware that
insurers could not deny them coverage, even if their employees were sick.
In fact, virtually all states have required insurers to spread the claims
costs of small employers with sick employees across their larger pool of
small firms through the use of rating restrictions. In turn, these
restrictions would help make health insurance coverage more affordable for
both employer and employee. In addition, more than 70 percent of small
employers did not realize regulatory limits exist on how much insurers may
charge employers with healthy workers versus employers with sick
employees.
Education efforts are needed to guarantee that small employers
understand existing tax incentives and the relatively new laws on
insurance options. Toward these efforts, an educational outreach program
has begun so that no small employers will lack comprehensive information
concerning their ability to afford to insure their employees. Most
importantly, employer contributions to employee health plans are treated
like general business expenses and are, consequently, 100 percent tax
deductible.
In addition to raising awareness among employers, I believe carefully
crafted, targeted federal tax incentives are an excellent way to lower the
uninsured rate in West Virginia. As evidence, the study found that 86
percent of small employers supported tax breaks for health insurance for
low wage workers. Sixty-four percent said that they would be more likely
to offer health insurance if a government assistance program were
available. Finally, 53 percent of small employers who did not offer
coverage cited their inability to afford insurance as a key obstacle. More
interestingly, more than one-third incorrectly believed employees who
bought their own insurance could deduct their premiums on tax returns.
In West Virginia, the State has enacted laws that guarantee
availability of health insurance for small employers, placed limits on
premium variation for small employers, and developed the State Children’s
Health Insurance Program (SCHIP) to raise insurance levels among children.
On the federal level, I will work for targeted, carefully crafted tax
incentives which will make insurance a more viable option for employers
and employees alike.
September 25, 2000 |
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