How to Kill a Small Business - All of them in fact.
As most of you know, I run a small telephone company here in East Texas. We have less than 20 full time employees, fitting anyone's definition of a small business. We provide health insurance for our employees along with dental and life insurance.
Well, I just received my renewal from United Healthcare, one of the largest insurance companies in this rapidly consolidating field. They proposed a 50% (no that is not a typo) increase in our health insurance premiums. 50%, who are they trying to kid. I have not seen one credible report indicating the cost of anything - outside of a barrel or oil - increased that much last year. Why didn't they just tell me they were no longer interested in my business? I would have been less aggravated over the matter.
After spending the last three weeks poring over the details of a number of other plans, I have come to the inescapable conclusion that the health insurers are intent on putting small employers out of business. I will pay almost $60,000 next year to provide decent health care coverage to my employees. This is a ridiculous amount, and an amount that will prove to unsustainable depending on the level of increases we are subject to in the coming years. Here is what health insurers, the health industry and the government better consider before it is too late.
If health insurance is too costly for small businesses, what happens? Do small business owners and their stake holder quit the business or do they cease providing health insurance to their employees? This may end up being the only choices we have. Will small businesses be able to attract "star" employees if they cannot provide benefits? How about just regular employees? What a shame it would be to lose the "engines of employment" in this economy due to the greed and oligopoly pricing policies of the medical industry.
If small businesses do not buy health insurance who will? Individuals? Get serious, very few people can afford the $1,000+ per month health insurance costs for a family of 4. Governments? This would be a bad deal for insurers, as Governments are big networks and have pricing power. Big businesses? Get serious again. Big businesses are off-shoring as many jobs as they can to avoid having to pay salaries and benefits. GM and Ford are in the process of cutting health benefits for their retirees as well as current employees. If they can do this with the backing of the unions, then every big company will follow suit. For another example of the issue, look at Wal-Mart's classification of employees, and how many are insured by the company. Wal-Mart, with all of the money and purchasing power they have, may be showing all businesses the way to reduce medical costs.
How will these uninsured persons pay for their medical costs? This is a much larger crisis than you would imagine. Higher costs of uninsured patients are passed on to patients who are insured, leading to higher insurance rates, leading to higher numbers of small businesses who cannot afford health insurance, and leading to more off-shoring by big businesses, leading to higher numbers of uninsured employees. Where can we get off this merry-go-round? The whole system will collapse in just a few more years of this.
At the end of the day, the health insurers and the medical industry is just screwing itself. In this peanut's opinion, it is only a matter of time until health insurance is unaffordable to most individuals and businesses. This will lead to a financial crises in the health care community (doctors and hospitals) due to the level of bad-debt they will have from patients not paying them, or from the discounts they will have to provide uninsured patients to get any payment at all. At the end of the day the government will have to step in and offer a solution. Not a band-aid, but a solution. This will be expensive. As a good Republican it pains me to no end to say that I almost wish the Clintons would have enacted a national health plan 15 years ago. The price tag would have been a pittance compared with what it will cost to fix this mess we have today.
When this happens, who needs insurers? Maybe the insurers will get what they deserve. Unfortunately, it will cost everyone but the insurers way too much money in the meantime.
Well, I just received my renewal from United Healthcare, one of the largest insurance companies in this rapidly consolidating field. They proposed a 50% (no that is not a typo) increase in our health insurance premiums. 50%, who are they trying to kid. I have not seen one credible report indicating the cost of anything - outside of a barrel or oil - increased that much last year. Why didn't they just tell me they were no longer interested in my business? I would have been less aggravated over the matter.
After spending the last three weeks poring over the details of a number of other plans, I have come to the inescapable conclusion that the health insurers are intent on putting small employers out of business. I will pay almost $60,000 next year to provide decent health care coverage to my employees. This is a ridiculous amount, and an amount that will prove to unsustainable depending on the level of increases we are subject to in the coming years. Here is what health insurers, the health industry and the government better consider before it is too late.
If health insurance is too costly for small businesses, what happens? Do small business owners and their stake holder quit the business or do they cease providing health insurance to their employees? This may end up being the only choices we have. Will small businesses be able to attract "star" employees if they cannot provide benefits? How about just regular employees? What a shame it would be to lose the "engines of employment" in this economy due to the greed and oligopoly pricing policies of the medical industry.
If small businesses do not buy health insurance who will? Individuals? Get serious, very few people can afford the $1,000+ per month health insurance costs for a family of 4. Governments? This would be a bad deal for insurers, as Governments are big networks and have pricing power. Big businesses? Get serious again. Big businesses are off-shoring as many jobs as they can to avoid having to pay salaries and benefits. GM and Ford are in the process of cutting health benefits for their retirees as well as current employees. If they can do this with the backing of the unions, then every big company will follow suit. For another example of the issue, look at Wal-Mart's classification of employees, and how many are insured by the company. Wal-Mart, with all of the money and purchasing power they have, may be showing all businesses the way to reduce medical costs.
How will these uninsured persons pay for their medical costs? This is a much larger crisis than you would imagine. Higher costs of uninsured patients are passed on to patients who are insured, leading to higher insurance rates, leading to higher numbers of small businesses who cannot afford health insurance, and leading to more off-shoring by big businesses, leading to higher numbers of uninsured employees. Where can we get off this merry-go-round? The whole system will collapse in just a few more years of this.
At the end of the day, the health insurers and the medical industry is just screwing itself. In this peanut's opinion, it is only a matter of time until health insurance is unaffordable to most individuals and businesses. This will lead to a financial crises in the health care community (doctors and hospitals) due to the level of bad-debt they will have from patients not paying them, or from the discounts they will have to provide uninsured patients to get any payment at all. At the end of the day the government will have to step in and offer a solution. Not a band-aid, but a solution. This will be expensive. As a good Republican it pains me to no end to say that I almost wish the Clintons would have enacted a national health plan 15 years ago. The price tag would have been a pittance compared with what it will cost to fix this mess we have today.
When this happens, who needs insurers? Maybe the insurers will get what they deserve. Unfortunately, it will cost everyone but the insurers way too much money in the meantime.
posted by slates at 1:05 PM
1 Comments:
For all intents and purposes - other than a 12-hour-a-week, mildly diverting, mildly vexing part-time job - I am self-employed. I have been for nearly a decade. I pay my own taxes and fund my own SEP IRA.
However, there is no possible way I could do this without access to my husband's health insurance plan. If he would lose his job, we would divorce or, heaven forbid, he'd die, I would be forced to get a "real" job.
I do not want to - I do quite well as a entrepreneur and in certain years, my annual income has far exceeded what I would have earned had I been employed in a comparable "real" job. However, there is no way I could ever buy a comparable family insurance policy on my income.
As a conservative - I fall a hair short of using the "R" word - I do not abuse our cadillac insurance policy. There's a certain amount of cognitive dissonance involved in this for me. But I am dismayed at the tremendous cost of health care when we do use it. A recent MRI cost $2,800. Ten sessions of PT? $2,100. A tonsilectomy with a single overnight stay for our daughter? $8,400.
Maybe I'm just naive, but these numbers verge on ludicrous. It's absurd. If I was uninsured and presented with those bills, my only response would be to laugh. Those three bills would eat up nearly 60% of my gross income in 2005. Net? I'd be in the red.
It's just senseless.
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