In the push/pull for more affordable health care, the forces of the status quo (read insurers) are fighting to keep their money flowing. Meanwhile, health care premium costs have soared for small businesses. A recent study by the Kauffmann-Rand Institute found that health-care costs had nearly doubled between 2000 and 2005 for businesses with fewer than 25 employees. For these companies health care costs now exceed 10% of total payroll costs. Now a bi-partisan group led by Senators Durbin and Snow are trying to break the log jam.
The Small Business Health Options Program (or SHOP Act) would enable small businesses to set up health-care insurance pools and seeks to establish a nationwide pool by 2011. It also offers tax credits of more than $2,000 per family covered for employers that provide health-care to workers under this program. The national pooling feature has been fought by insurers as well as health advocacy groups (like the American Cancer Society) which do not want to see state regulations overturned. This bill addresses those concerns and as a result may have a better chance of passing. It is supported by the National Federation of Independent Businesses, the country's largest small business advocacy group.
No easy remedies have been proposed to address the overall ballooning of costs and inefficiency of our health care system. Short of a full overhaul, this bi-partisan program is a good start for small companies. Let's see if it gets through the Congressional battles, it is there where we'll see which entrenched money maker of the current system opposes it.
Showing posts with label costs. Show all posts
Showing posts with label costs. Show all posts
Tuesday, April 15, 2008
Tuesday, February 5, 2008
Small businesses suffering under the current healthcare system
While large firms (those with 200 or more employees) unanimously provide health benefits to employees, not so for smaller companies. The reason is cost. As a result, it is time for small firms to add their voice to change the system.
According to the annual Kaiser Health Survey for 2007 (available at Kaiser Family Foundation) 99% of large firms provide coverage, and of those 95% cover at least 50% of the premium cost for families. With small firms (3-199 employees) coverage is provided by only 59% of the firms, and for those that do provide coverage they only cover 63% of premiums. Why is this discrepancy happening?? Cost increases are the obvious reason. From the Kaiser Survey we see that since the Spring of 2000 health premiums have risen more than 80% in total, or more than 10% annually, well out-pacing inflation and employee earnings.
What is this doing to small businesses? It is forcing them to drop coverage in increasing numbers. It is also pushing creative solutions including funding health costs outside of traditional programs. In many cases employees are forced into individual high deductible plans, which are fine for healthy consumers, but devastating for health challenged workers. In either event, these issues help make these firms look unattractive to new workers when compared to larger firms.
Would a national health plan fix this discrepancy, yes, but only if the overall costs per capita are the same or lower. More study is needed, but it looks like small businesses should be looking for a change in policy compared to their larger competitors.
As I have argued before, we cannot keep paying the increasing costs of the broken US health care system, and we can now see that it's finally time for small companies break with the US Chamber of Commerce, which advocates augmenting the current system, and add their voice to the Physicians for a National Health Program.
According to the annual Kaiser Health Survey for 2007 (available at Kaiser Family Foundation) 99% of large firms provide coverage, and of those 95% cover at least 50% of the premium cost for families. With small firms (3-199 employees) coverage is provided by only 59% of the firms, and for those that do provide coverage they only cover 63% of premiums. Why is this discrepancy happening?? Cost increases are the obvious reason. From the Kaiser Survey we see that since the Spring of 2000 health premiums have risen more than 80% in total, or more than 10% annually, well out-pacing inflation and employee earnings.
What is this doing to small businesses? It is forcing them to drop coverage in increasing numbers. It is also pushing creative solutions including funding health costs outside of traditional programs. In many cases employees are forced into individual high deductible plans, which are fine for healthy consumers, but devastating for health challenged workers. In either event, these issues help make these firms look unattractive to new workers when compared to larger firms.
Would a national health plan fix this discrepancy, yes, but only if the overall costs per capita are the same or lower. More study is needed, but it looks like small businesses should be looking for a change in policy compared to their larger competitors.
As I have argued before, we cannot keep paying the increasing costs of the broken US health care system, and we can now see that it's finally time for small companies break with the US Chamber of Commerce, which advocates augmenting the current system, and add their voice to the Physicians for a National Health Program.
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