Businesswoman Rochelle Balch struggles with a daily challenge:
how to afford health insurance for her workers and still keep
profits high.
Balch, who owns a computer-consulting firm in Glendale, Ariz.,
said she pays more for insurance than large companies pay but gets
less coverage for her 10 employees.
“We get (charged more) because we are small,” said Balch, who
waits 60 days to insure new workers in order to save money.
Health benefits are key to attracting talented workers who help
fuel the economy. But most of the nation’s 5.6 million small
businesses say they can’t afford to offer those benefits.
As a result, uninsured workers at small companies account for 57
percent of all uninsured workers, according to The Commonwealth
Fund, a health research group. Those workers contribute to
overcrowded emergency rooms and increased health care costs for
everyone.
One possible solution: Let small businesses band together
across state lines to form “association health plans” that could
negotiate less expensive health care coverage.
“This is an idea that would empower small-business people, get
administrative costs down and wouldn’t cost a penny,” said
Republican Sen. Jim Talent of Missouri.
Small businesses, which employ about half the nation’s 115
million private-sector workers, list the rising cost of health care
as their No. 1 concern. They note that:
* Employees at small businesses have higher deductibles and get
fewer benefits than employees at large companies, studies show.
* More than half of businesses that employ fewer than 50 workers
don’t offer their employees health insurance. Among big companies,
only 3 percent don’t offer insurance, according to the Kaiser Family
Foundation, a health research group.
* Health care premiums for businesses with fewer than 200 workers
climbed 15.5 percent last year. The increase was 13.2 percent for
larger companies, according to Kaiser. Last year, companies of all
sizes paid an average of $3,383 to insure a single worker, the
foundation reported. The cost was $9,068 to insure a worker’s entire
family.
Carl Fellers, who employs 35 workers at his restaurant supply
company in Springfield, Mo., said he used to pay 100 percent of his
employees’ health benefits. But he can’t afford that expense today.
To contain costs, Fellers’ employees help pay for a company
health plan that provides fewer benefits. But Fellers still spends
$100,000 a year on health benefits — his third largest expense — and
said his premiums are rising 25 percent to 30 percent annually.
“It would help if I could get even a 10 to 15 percent reduction,”
Fellers said.
Talent and other lawmakers say that’s the promise of association
health plans. Under the proposal, one of several being considered by
Congress, the plans would be regulated by federal labor officials
rather than state officials, who regulate insurance plans for larger
companies.
The bill’s supporters, including the National Federation of
Independent Business, say it would make health insurance for small
businesses more affordable and accessible.
But the proposal faces stiff opposition from the nation’s
governors, state insurance regulators, consumer groups, some
small-business groups and some lawmakers. They say association
health plans shouldn’t be exempt from state-mandated benefits and
regulation.
“It’s not going to work if we deregulate small business,” Alabama
Insurance Commissioner Walter Bell said. “There is no silver bullet.
We just have to make health insurance more affordable for everybody.