Michael Ciamarra
Tuesday, June 3, 2008Affordable Health Insurance Coverage for Small BusinessA modest beginning to transform health in Alabama By Michael CiamarraCategories: AlabamaThe pundit class in Alabama said it couldn't be done. Last week in a special session of the Alabama Legislature a bill giving small business tax incentives for health insurance passed. The pundits were indeed pleasantly surprised. Gov. Bob Riley deserves a lot of credit for advocating, encouraging and supporting a sound, practical reform that will help small businesses afford health insurance coverage for their employees. Fifty-two percent of individuals working for small businesses with less than 25 employees are uninsured. Small businesses currently can deduct from their taxable state income 100 percent of the cost of providing insurance. The new legislation signed by the governor will now allow small businesses to deduct 150 percent of the cost. In Alabama, employees currently can deduct 100% of the cost of their health insurance premiums, if medical costs exceed 4 percent of their taxable income. Now, the new law allows employees to deduct from their taxable state income an additional 50% of their premiums. While not on the scale of amazing health transformation of our neighboring state of Georgia, this was a big step forward and is the first of practical, market-based powerful step into the right direction. Oh, there was a little frivolity associated with this bill. When it became clear that this was an essential and sound measure that would help tens of thousands of small Alabama businesses (90% favored this measure and will use the new tax incentive for the benefit of their employees) the Democrats in the Legislature promptly "appropriated" the bill from its long time Republican sponsor and it magically became their bill. Isn't the legislative process wonderful! Seriously, Republican Gov. Bob Riley and his policy team did an excellent in making a compelling case for this much needed reform.
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Tuesday, March 25, 2008Certificate of Repeal - Long Overdue to be RepealedBy Michael CiamarraCategories: Certificates of Need (CON)The word about certificate-of-need laws is getting out, as evidenced by the following news clipping. --- Group seeks CON repeal Policy Institute says rules keep health care prices high Sunday, February 17, 2008 ANNA VELASCO News staff writer Michael Ciamarra knows the Alabama Policy Institute's mission to repeal the state's Certificate of Need law faces staunch and powerful opposition. No matter. The nonprofit think tank he works for plans a campaign to abolish what it considers an outdated bureaucracy that unwisely stifles health care competition. This past week, the institute sent state lawmakers a recent report it sponsored calling for abolishing state Certificate of Need laws, which regulate construction and expansion of services at hospitals and nursing homes. The group plans to begin meeting with editorial boards at newspapers around Alabama this spring. Click here to read entire the article or go to http://www.al.com/birminghamnews/stories/index.ssf?/base/business/1203239733117900.xml&coll=2
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Monday, March 24, 2008Alabama Governor Proposes Affordable Coverage for Small BusinessMoving toward a 21st century intelligent health system By Michael CiamarraCategories: AlabamaIn "Legislative Agenda: 2007" by Michael Ciamarra, Alabama Policy Institute, we supported a plan that would seek a common-sense, affordable coverage that would encourage small businesses to provide health insurance. I am very pleased that Alabama’s Gov. Bob Riley has put forth a very serious proposal that we believe will begin to change the dynamics of the health debate in our state. In Alabama 93% of privately insured individuals receive heath insurance coverage through their employer. Unfortunately, statistics show less availability of employer-sponsored health insurance among small businesses. In Alabama, 28% of small business employees do not have access to employer-sponsored health coverage, compared to just 1% without such coverage options in larger companies. Due to these limitations and increasing cost, 52% of individuals working for firms with less than 25 employees are uninsured. In 2006, employer health insurance premiums increased by 7.7% - two times the rate of inflation. As insurance premiums increase, more and more employees are declining to participate in employer-sponsored health insurance plans. A recent national survey found that 11% of small business owners who currently offer health insurance are considering dropping their benefit plans in the future due to rising costs. People without health insurance through an employer are more likely to go uninsured, leaving the state to bear the burden of exponentially increasing costs through state programs like Medicaid and SCHIP.Survey research indicates that small business owners would be more likely to provide heath insurance if tax incentives were offered. A 2002 Small Employer Health Benefits Survey conducted nationally by Employee Benefit Research Institute found that 71% of employers would be much more likely or somewhat more likely to seriously consider offering health benefits if tax incentives were offered. A recent study done by the NFIB in Alabama found that 90% of independent business employers support legislation that would provide a tax incentive for small businesses that provide health insurance. Gov. Riley’s proposal will begin to close the gap between large companies and small business by creating strategic, targeted incentives for small businesses to provide health insurance to their employees. The tax incentive would allow small business owners to deduct from their state income taxes twice the amount they pay for health insurance premiums. The deduction would be available to businesses with fewer than 25 employees. Employees of small businesses could also deduct twice the amount they contribute to premium payments. This deduction would make employer-sponsored health insurance more affordable and encourage greater employee participation. To qualify for the deduction, an employee must have an adjusted gross income of less than $50,000. This measure represents a focused plan to decrease the number of uninsured in Alabama by increasing the availability and affordability of employer-sponsored health insurance among small businesses. Moving the uninsured into employer health plans ultimately lowers health care costs borne by the taxpayers. The tax incentives would be phased in over 5 years and would save the taxpayers between $12 and $16 million annually. To prevent revenue loss in times of economic downturn and preserve education funding, Gov. Riley’s proposal contains a revenue growth guarantee. The next phase will not go into effect until 3% estimated growth in the Education Trust Fund has been certified by the state’s Department of Finance. Targeted tax incentives like these lead to economic development and new jobs, which in turn generate revenue for education. These incentives should be viewed as long-term investments in our state and its hard-working citizens. The effective date will be for tax years beginning after December 31, 2009. The need is great, the time is now. Can any of our SPN colleagues offer constructive feedback to improve and strengthen this proposal?
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