Health-care costs top concern for small business owners

 

Health-care costs rank as the most critical issue concerning small business owners, according to a new survey released by the National Federation of Independent Businesses and Wells Fargo.

Nearly two thirds of respondents to a 2004 survey listed health-care costs as critical, up 18 percentage points from 2000, the NFIB said.

Other top issues of concern included liability insurance, workers' compensation costs, energy costs and electricity rates.

"The cost of health insurance is eating us to death," said Jack Faris, president and chief executive of the NFIB, said in an interview. The NFIB is supporting association health plans, or small business health plans, under which small businesses aggregate under an association, which can get similar health benefits as larger companies.

"Big business spends 7 cents of every premium dollar on administrative costs, while small business pays 30 cents," Faris said. "There could be a 20 percent to 25 percent savings on premium costs simply by aggregating," he said. "We just want to level the playing field."

U.S. Sen. Jim Talent and U.S. Sen. Kit Bond, both Republicans from Missouri, have supported the association health plans on the federal level. "There is no one in the U.S. Senate who knows and understands this issue as well as Jim Talent," Faris said. Both senators have served on small business committees.

Faris was in St. Louis for a three-day visit with NFIB members in Missouri, which he said is a key state for NFIB. The organization has 11,000 members in the Missouri, which is closely watched by neighboring states.

"Missouri is a bellwether state -- what happens in Missouri is a forerunner of what may happen nationally," said Faris. "In Missouri, all of our members are screaming that they need some relief from unemployment costs, workers' compensation, liability and health-care issues. One of the reasons I'm in Missouri is to meet with members and to encourage members to know the facts about the people running for office."

In addition to Missouri, Faris is visiting NFIB members in other states where it sees the most emphasis needed, including Colorado, Indiana, Ohio, Florida, North and South Carolina and Georgia.

The high health-care and liability costs and other issues concerning small businesses can have a larger economic impact, Faris said. The costs cause a small business to stop growing, hiring, promoting, investing and borrowing," he said.

"It is a huge hit on the economy, not immediately, but over not too long a period of time," Faris said. "If they stop, big businesses that sell them the supplies aren't getting any orders, and their inventories start going up, their profits go down, their stock prices go down, then we're in a recession.

"It's like the nail of the shoes in the horse of the general in the battle that wins the war," Faris said. "People don't think the nails are important."