Once again, a new survey puts health care reform at the top of small business concerns.

The National Small Business Association launched its new health reform campaign, this week, with a survey finding that more than one in five small businesses experienced health insurance rate increases in excess of 20% last year, and more than half reported that increased health costs meant no salary increases for employees. Most small businesses can't afford to provide wellness incentives to employees.

A large majority of small business people who do not offer coverage would, if it were more affordable. That same group supports, in large majorities, better information about the cost and quality of health care, tax incentives, allowing for early buy-in to the Medicare program (75.8%) and even the elimination of our current third-party payer system (77.4%).

If this survey is any indication, small business people are ready for something dramatic to happen.

NASB launched its campaign shortly after the GAO released a report with some big picture findings about the dismal state of competition to insure small businesses. According to the GAO, in most states fewer than five companies dominate the market. In Alabama and North Dakota Blue Cross has almost all the business to itself. In most states, Blue Cross is the dominant company by a considerable margin.

But you, small business people among us, already know all this. When we asked you about your own experience as small employers and self-employed workers, you gave us hundreds of comments. We're still working them up into something more formal, but I wanted to post just a few --without personal information to respect your privacy-- because they really tell the story.

"A few years ago it became financially impossible for me to offer employee insurance. So, I started hiring only part time help or people over age 65 and paid for my own insurance until I dropped it when I too reached 65."

"As we age, health care costs go through the roof. I need experienced people in the high tech industry that we work in. This usually means older people. The older the person, the higher the health insurance costs. This severely strains our ability to offer health insurance. It is much worse in a recession as sales are down and insurance costs rise often 15-20% per year. The costs are ridiculous! We have the most expensive health care in the world with the least ROI. This is wrong."

"Both my husband and I own our own businesses: we're the only employees. When I check on health insurance, the cost is staggering. In fact, this economy is such that we will probably have a bankruptcy. And we are 60 years old. How do you get insurance when in our situation."

"Health insurance is a factor in my business closing down. We are a small business with 3 employees and it cost me approximately $2,500 per month in sure 3 persons which is a costly proposition for a small business."

"I had to lay off three people who had worked for me for 20 years in December 2008 in part because of health insurance costs. For two healthy married adults, who have HTN treated with one medication but NO OTHER medical problems at all...active non-smokers, normal weight, we pay 1000/mo for a private insurance policy that has a $10.000 deductable. We cannot get sick. We are insuring against catastrophic illness only."

Unfortunately, the road to real reform for small business is bumpy, in part because doctors are small businesses too--but they have rather different concerns and can sometimes take a different approach to health reform.

Last week, the House Committee on Small Business invited "Small Providers" to give their input--so lawmakers heard from the AMA, the American College of Physicians and the American College of Surgeons among others. Despite the fact that most small businesses cite cost as the key barrier to coverage, the surgeons suggested that health reform must include, well, more money for surgeons, particularly from Medicare. The primary care docs wanted more money too, but at least provided stats showing that primary care docs make a lot less money than other docs (like surgeons, for example).

In the end, we will have to address the question of escalating health care costs--not just the health insurance costs and the bloated administrative costs--but the actual cost of the care we get. Take a look at what the docs have to say and tell us what you think about payments to them. Do we need to pay them more? All of them? Some of them? These are the kind of fundamental debates we will need to resolve in the coming months for health reform to provide real relief to every small business person in the country.

comments (4)

Great site and I am really pleased to see you have what I am actually looking for here and this this post is exactly what I am interested in. I shall be pleased to become a regular visitor

Granted health care is a huge problem ready for a solution, but let's not throw out the baby with the bath water. Today I get great health care provided by Medicare supplemented by health insurance provided by my former employer and supplemented by my monthly payments. I'm concerned that CR Health has a strong bias for a government solution that will create the kind of mess Canada and many European countries have.

Issues not addressed above:

How are we going to ration health care -- cost as in a private system or waiting time as in a Canadian system?

Who is going to sort out quality health care providers vs. those with just a license. My private insurer does that. Medicare can't because it is subject to congressional pressure.

Who is going to fight fraud? I understand that private insurers do that, but Medicare has not been effective in that area due to congressional pressure to keep administrative costs down.

Who is going to evaluate what works and what doesn't? Medicare took a big step recently by saying it would not pay for infections patients get in hospitals. That was great! Data mining in electronic health records could save the country billions. Maybe government can do this, maybe not. Again, congressional pressure may deter cutting off tests and medications offered by campaign donors.

Who is going to regulate the private insurers? States have done a miserable job. Hopefully the federal government will allow all consumers to get private insurance with high deductibles and copays so the cost is low and almost everyone can afford it.

The agreement by insurers to accept all patients regardless of existing conditions is a great step forward. If they can set rates based on age and sex they will have a level playing field with no incentive to avoid covering some people.

According to my doctor, the lack of standardization in illness and treatment coding is the biggest source of cost and frustration for him. Standardization there will reduce providers costs significantly.

If insurers are going to compete with a government system like Medicare, I hope Medicare gets no more funding per person covered than the insurers. It will be interesting to see a comparison of costs and care levels.

I own a small business in Alabama. Our Governor got headlines that - looked like - he was helping small businesses afford/get Health Insurance. Read the details, it was only to help the employees of small businesses, that make less than $50K/year. Nothing for the small business owners, or small businesses with no employees. We are going to see a lot more headlines, that look good politically, without really addressing the problem.

Insurance does not belong in the Medical Industry.
They only add cost to Health care and hinder progress.
They have priced themselves out of the market by continuing their trend of raising premiums and lowering coverage and dening claims.

Insurance companies increase operating expenses at the Doctors office and pay the Doctors less and less for the same procedures every year.

Insurance companies also force the Doctors to violate their Hippocratic Oath by not approving needed procedures. How have we allowed this illegal practice of medicine to occur? Insurance companies are now involved in making life saving medical decisions.
Insurance companies are not licensed to practice medicine yet have been allowed to have medical authority over trained medical professional Doctors. This practice by the Insurance companies must be stop for better Health care and preventing them from causing premature deaths.

So, let’s get back to the basics of what Insurance companies are for. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed small loss to prevent a large, possibly devastating loss.

I can get much better basic health care directly from my Doctor by paying him less than half of what my current premiums are.
The Doctor will make more profit by lowering his expense of having to comply with Insurance companies policies and I will get better and lower cost BASIC health care.
This is just one way free market conditions can correct the rising cost of Insurance and reduce the cost of staying healthy.

Please kick Insurance companies out of the health care business and leave it to the professionals. This will lower the Insurance companies cost and they can get back to the basics of covering unplanned emergency expenses.

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