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Clark Howard's Tips

Small biz gets boost from new health proposal

May 30, 2008

People see Clark as a beacon of non-political discourse in the talk radio world. But, Clark believes it's reasonable to step in from time to time, especially if a politician has an idea that he thinks has merit. So in the interest of bipartisanship, Clark discusses a health proposal fromÉwait for itÉ2 Democrats and 2 Republicans!

Their joint proposal, the Small Business Health Options Program (SHOP), would make it possible for small business employees and entrepreneurs to receive a tax credit for buying health coverage. SHOP would also allow multi-person risk pools that would lower premiums.

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Entrepreneurs have long suffered without readily available healthcare. If they do have coverage, they're often individually rated. So while an illness may initially be covered, they'll face exorbitant future premiums designed to drive them out of the insurer's pool. The tax credit idea would extend the help that large corporations get to the world of small business. They'll have money coming back from the government to buy private healthcare.

Meanwhile, the issue of redlining is a hot one in the insurance realm. Clark wants transparency in health coverage and thinks it could be achieved if there were only 8 plans offered to small businesses: 2 HMOs, 2 PPOs, 2 HSAs and 2 of the traditional 80/20 splits. Every insurer would have to sell identical plans, and they could charge what they wanted for them. That way you could switch to another insurer's HMO plan No. 2 if your insurer's HMO plan No. 2 is too costly. As always, Clark says the real risk to insurers if they don't shape up will come from the threat of socialized medicine.

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