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NATIONAL POLL IDENTIFIES NEW CONCERNS ABOUT HEALTH CARE REFORM; SMALL BUSINESSES THAT NOW PROVIDE INSURANCE FEAR FEWER OPTIONS

 WASHINGTON, Sept. 16 /PRNewswire/ -- President Clinton is already anticipating resistance to his health plan from small businesses that don't insure their employees, according to media reports. Now, a new national poll conducted by Penn-Schoen suggests trouble is also brewing among small businesses that offer health insurance.
 Two-thirds of small businesses now providing health insurance think Clinton's plan will put more of a burden on businesses like theirs, according to a poll of people who make or recommend health benefit decisions for their companies. While President Clinton is promising health care reform will deliver three S's -- savings, simplicity and security -- these companies are worrying about losing three C's -- choice, cost-effectiveness and convenience.
 Commissioned by the Association of Health Insurance Agents (AHIA), the nationwide survey polled 410 small businesses that now provide health insurance for their employees. These small businesses see room for improvement in the current health care system, but they are concerned about sacrificing the features they like.
 Among the survey's key results:
 -- An overwhelming majority favor voluntary participation in government-sponsored insurance groups.
 -- Nearly half believe the large insurance purchasing groups the administration has in mind will make insurance less affordable for small businesses who currently offer health insurance to their employees.
 -- More than three-quarters rely heavily on the services of their insurance agents or brokers and want to preserve that relationship.
 "As consensus about the need for health care reform has been building, attention has focused on balancing what consumers want from a new system with what they want to preserve from the old system. This survey reveals that small businesses, particularly those already offering insurance, share many of the same hopes and fears consumers have expressed -- how to preserve choice, affordability and convenience," said J. Beryl Clifford, CLU, RHU, president of AHIA.
 Concerns About Having Fewer Choices
 Small businesses are particularly keen to preserve the maximum degree of choice in any new health care system. Perhaps because a majority (59 percent) expect large, government-sponsored insurance purchasing groups to provide worse, not better, service than they now get from private insurers, most small businesses (83 percent) want their participation in such groups to be voluntary.
 To make certain that they have as many options as possible, more than three-quarters of small businesses (77 percent) agree that the private insurance market should be permitted to compete on a "level playing field" with the government-sponsored groups. Because they're not certain that large insurance groups will be able to tailor uniform benefits packages to suit all small businesses, two-thirds (66 percent) of those surveyed prefer to have many different benefits plans to choose from.
 Convenience Matters
 Two-thirds of small business benefits planners think Clinton's reforms will put a greater burden on businesses like theirs. Only 8 percent expect their load to be lightened.
 Furthermore, small businesses say they like the way they now learn about and purchase insurance and don't want that process to change. More than three-quarters (78 percent) say insurance agents or brokers are a very (50 percent) or somewhat (28 percent) important source of detailed information about their employees' health care plan, the highest percentage from a choice of options that included insurance company 800 numbers -- an important source for 65 percent -- and handouts from the insurer, important to 72 percent.
 Eighty-four percent say the company's health insurance agent provides a useful service to their firm. Most of the companies surveyed rely upon agents to:
 -- Make recommendations on the right plan (82 percent);
 -- Negotiate policy renewal or a new policy (75 percent);
 -- Tailor a health care plan to fit employees' needs (73 percent);
 -- Review and deliver contracts (73 percent);
 -- Handle enrollment and claims problems (69 percent);
 -- Advise on employee contributions (54 percent);
 -- Make changes or modifications in the plan (54 percent);
 -- Monitor claims (51 percent).
 More than 90 percent of respondents say they have received quality service from their health insurance agents on each of these tasks.
 "Small businesses depend upon their insurance agents for access, advice and service," said Clifford. "Survey results show a high level of satisfaction with the way agents perform. It's not surprising small businesses are hesitant to trade what they like for something new and untested," said Clifford. Eight out of 10 (79 percent) benefits planners agree insurance agents should continue to serve as a link between insurers and the insured.
 Concerns About Cost
 The survey found that small business questions a core concept driving the Clinton health care reform plan -- that a change over to large insurance purchasing groups will help reduce their cost of health care. While 39 percent think health insurance will be more affordable under the new plan, 43 percent say health insurance will be less affordable.
 One source of concern may be the additional burden that eliminating insurance agents would place on small businesses. If there were no agents or brokers, most benefits planners (52 percent) think they would be unable to duplicate the services agents provide without making other arrangements. Among the steps they would be most likely to take: Hiring an outside consultant to administer their health plans, 35 percent; expanding the department that handles their plans now, 26 percent; and creating a department to administer their plans, 13 percent.
 "Small businesses rely heavily on their insurance agents and think they pay a fair price for their services (67 percent). If the Clinton plan eliminates agents, companies will be forced to recreate the role in-house," said Clifford.
 Other cost-saving measures likely to be part of Clinton's health care reform plan elicit more support from small businesses. They believe there should be a partnership between employers and employees in which both would be required to pay part of the cost of health care coverage, subject to their ability to pay: 31 percent strongly agree, and 35 percent agree somewhat. Eighty-seven percent think there should be more tax incentives for wellness and other preventive medicine programs to lighten the burden for small business.
 When asked which taxes would be most acceptable if raising taxes proved necessary to pay for health care, 30 percent opt for a value- added or national sales tax, and 35 percent would tax employers who do not provide health care. A mere 4 percent say a payroll tax on employers is most acceptable, and 6 percent choose a payroll tax on employees. Another 16 percent volunteered that no tax would be acceptable.
 A tax advantage small business is reluctant to give up is the tax deductibility of health insurance benefits: 41 percent disagree strongly on reducing deductibility and another 11 percent somewhat disagree.
 To ensure everyone has basic health care, 62 percent of small business benefits planners say there should be government subsidies for low-income employers and employees. "Small businesses are willing to shoulder their share of the health care burden. But as the debate about specific reforms evolves, it's important to consider these companies' reluctance to lose what they already have," said Clifford.
 AHIA, a conference of the National Association of Life Underwriters (NALU), is a national trade association based in Washington representing the interests of health insurance agents and providing legislative, educational and public relations support to those who service health insurance and employee benefit plans.
 NALU, founded in 1890, is a federation of 1,000 state and local associations. The 143,000 members of these local associations are sales professionals in life and health insurance and other financial services.
 SURVEY METHODOLOGY
 This telephone survey of American small businesses was conducted between Aug. 10-18, 1993, by Penn-Schoen Associates Inc., a nationally known survey research firm based in New York and Washington. A total of 410 interviews were conducted using the computer-aided telephone interviewing (CATI) facilities of Penn-Schoen Associates, located in Manhattan. A random-selection process was used to sample small businesses with 100 employees or fewer. Representatives of companies that do not offer their employees health insurance were excluded from the sample. The margin of error on the overall findings are a plus or minus 4.5 percent at the 95 percent confidence level.
 -0- 9/16/93
 /CONTACT: Betsy Glick, 202-331-6096, or Katy Shea Doherty, 202-331-2168, both of the Association of Health Insurance Agents/


CO: Association of Health Insurance Agents; Penn-Schoen Associates,
 Inc. ST: District of Columbia IN: INS HEA SU:


DC-MH -- DC007 -- 2694 09/16/93 12:56 EDT
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Date:Sep 16, 1993
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