Healthcare Reform: Big Benefits or Big Bust?

Healthcare reform will bring many changes to businesses and how they provide insurance for their workers.  The requirement that they do, will lead to unprecedented growth opportunities in this industry sector.  Healthcare financing companies may be seeing an unprecedented need for medical capital as businesses look to take advantage of the healthcare policy developments.

The country has been deeply involved – and divided – over the healthcare policy debate and developments during this administration.  Big changes are impending for individuals and businesses and one thing is certain, the changes will come with a potentially high price tag for some and a big payoff for others.

Businesses with over 50 and under 200 employees will be hit with the requirement to provide healthcare insurance for employees; or pay the fairly large fees for opting out; and subsidizing employees who choose a less expensive government insurance option.  Businesses with over 200 employees will be required to automatically enroll employees in any company sponsored healthcare plan.

What about small businesses – how will they be affected?  The government claims the reforms will even up the current tax disadvantages to small firms, which currently pay a disproportionate amount per worker as compared to their larger counterparts. Because of their higher health care costs, small businesses are far less likely to provide health insurance for their workers than larger businesses and the fraction of small firms offering health insurance has been declining in recent years. Political proponents of the reform claim that, as envisioned, the draft legislation  would reduce the current burdens on small firms and their workers and provide sizeable tax credits, as well as insurance “pools” to reduce healthcare costs.

The actual effects of this bill will not be known for years to come, since it will not be fully implemented until 2014.  Predictably, in the broader market sense, the biggest negative impact stems from the tax and deficit impacts of the legislation. The biggest advantages seem to be within the health care sector.  The hospital companies, along with other beneficiaries of increasing healthcare volumes, will profit.

This sector could see major growth and will be seeking to fund it.  In this competitive credit market, it is important for businesses to be prepared.  A well established commercial finance firm with solid experience in healthcare finance can be a key partner in saving time and money: they will know which healthcare financing companies are reputable, which are actually deploying medical capital and be expert at strategically matching lenders with clients.

As always, it is highly advisable to thoroughly check references and BBB rating when dealing with an intermediary.

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