Small Business Health Insurance Premium Assistance Act

Small Business Health Insurance Premium Assistance Act

Over 60% of the small businesses in the state can’t afford to offer health insurance to their employees. Up to 850,000 South Carolinians are uninsured. The SC Small Business Chamber of Commerce continues to recognize the crisis in health care/insurance cost as a top priority. Affordable health care/insurance is essential to lower personnel costs to small businesses and make small businesses more competitive for retaining skilled workers.

The Small Business Chamber is supporting the public/private hybrid “Small Business Health Insurance Premium Assistance Act”. This Medicaid buy-in program, already in place in Oklahoma and Arkansas, will authorize premium assistance to small businesses that employ 75 workers or less to provide private group health insurance coverage to all employees and spouses who are at or below 200% of poverty. Approximately 60,000 uninsured workers plus spouses could be helped. For these employees, Medicaid funds would pay 60% of the premiums and the employer and employee would pay the balance.

By reducing the cost to the employer for some workers, the business is then in a position to afford the group health insurance for all workers. Every dollar the state would put toward this program, approximately $87 million, would be matched by approximately 2.5 dollars of federal money.

However, before South Carolina can ask for such a waiver, it is first required to expand our S-CHIP program, the Medicaid program that pays for health care for children in poverty. Currently, in South Carolina our S-CHIP program only covers children in homes up to 150% of poverty while most other states cover up to 200% of poverty or more. To be eligible for the waiver mentioned above, South Carolina must raise the S-CHIP coverage to 200% of poverty. This will cover 40,000 more uninsured children. The state would need to increase its contribution to the S-CHIP program by about $20 million, which would be matched by $80 million of federal money.

The Board of Directors of the Small Business Chamber has agreed to support a modest increase in the cigarette tax to fund the “Small Business Health Insurance Premium Assistance Act”. An increase of 32 cents in the cigarette tax is proposed that will raise approximately $112 million. The cigarette tax would also become indexed to the Consumer Price Index to keep up with inflation. All the funds raised would go toward the “Small Business Health Insurance Premium Assistance Act” ($87 million) and S-CHIP ($20 million) programs except for five million to support a youth smoking cessation/prevention program and for the Department of Agriculture to help support our farmers.

Georgia currently has a cigarette tax of 37 cents. North Carolina is raising its cigarette tax to 35 cents in June 2006, and then it is to raise the tax to 40 cents in 2007. With a 32-cent increase in South Carolina’s cigarette tax, our tax would be 39 cents if this proposal is adopted. South Carolina would not be put in an uncompetitive situation with our border states.