Mon
Dec 22 2008
09:43 am
The Continuing Health Care Crisis For Small Business
By: reform4

I pinged my agent early for our renewal rates for our small business (9 employees) with BC/BS. I may have written a year ago that we had to suffer a 28% increase last year. This year, it's a 32% premium increase.

I'm not surprised, because with growing unemployment, the number of people paying into the system is dropping. Hospitals, however, still have to have someone to charge their overhead and their indigent emergency room visits off to. It falls on the backs of us remaining in the health care system (that still have jobs), so our rates skyrocket.

In addition to the 32% jump, coverages are being cut / copays being raised- a 33% cut in physical therapy benefits, 150% increase in ER copay, and more.

I'm a small business owner, and I would be 100% behind a single payer system paid for by higher taxes. Right now, as it stands, health care is an effective tax equal to, in some cases, what the employees are paying in income taxes. It's equivalent roughly to a 30% to 50% sales tax. Don't anyone tell me that the government can't do a better job than this (they do already with the federal system and the system for the armed forces).

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Bird_dog's picture

Did you consider a HDHP?

Submitted by Bird_dog on Mon, 2008/12/22 - 10:33am.

Our small business of under 20 employees found that we could switch to a $2500 deductible and pay the $2500 into an HSA for the employee and still save $1000 per year on each employee over the previous BC/BS plan. This is the 3rd year and it is working well.

reform4's picture

We looked at HDHP

Submitted by reform4 on Mon, 2008/12/22 - 12:46pm.

.. but we just didn't see the savings. If we were healthy, it was the same cost. If we got sick, we lost money.

Bird_dog's picture

In our case,

Submitted by Bird_dog on Mon, 2008/12/22 - 1:33pm.

we had about 17 covered employees, and the group plan premium was about $6000/yr each. The HDHP premium was about $2500 each ($2500 Ded and $2500 HSA). So in the year we changed, the company paid the premium AND made the deposit to each employee's HSA - a total of $5000 per vs $6000. Once the deductible was met (covered by the HSA, which the company funded) the employee out-of-pocket was zero. Healthy employees got to keep their HSA in the tax-sheltered account for future med expenses, including non-covered (by ins) expenses that were allowed by IRS. The agent said that the HDHP plans would not see the premium increases that the "rich-benefit" plans would. I spoke to him recently and he said, despite some initial concerns 3 yrs ago, everyone is enthusiastic about the plan now.

reform4's picture

Our premiums..

Submitted by reform4 on Mon, 2008/12/22 - 3:15pm.

..total range from $6,000 individual to $18,000 family (2009 rates). That's up from $3600/$10k two years ago, or roughly a 80% increase. The HDHP option at the time would have saved individuals only $1200 per year, families about $2400 per year. I don't know what the difference would be this year (e.g., did HDHPs go up 30% as well). If we saw the premium differences you saw, sure, it would be a no-brainer. For us, it was a bad roll of the dice.

Here's the total BS- in the breakdown of renewal factors, 16% was attributed to change in demographics of our employee mix. But our average employee age actually DECREASED about 10 years. Hmm.... new young employees? Let's raise the rates!

Breakdown: 1.3% base rate increase
Risk AdjL 3.8%
Demographis: 15.6%
State regulation adjustments: 8.5%
unexplained/they can't do math: 2.7%

I'll say it again- health care for profit is a losing proposition for society.

Factchecker's picture

Go back to France

Submitted by Factchecker on Mon, 2008/12/22 - 10:49am.

Socialists!

Konabuds's picture

:)

Submitted by Konabuds (not verified) on Mon, 2008/12/22 - 7:23pm.

:P

Aren't we just awful?

Damn hippies want to be healthy. The nerve....

RayCapps's picture

Insurance Pool of 9....

Submitted by RayCapps on Mon, 2008/12/22 - 3:06pm.

I know single families that could come up with an insurance pool that large. It's really hard for an insurance company to allocate risks across a pool that small, and it says a lot for you personally that you still provide insurance at the rates that would necessarily result. Tying employers to health insurance was an accident of the second world war, not a fundamental principle of our democratic system. Time to rethink it, folks. Conservative, Liberal, Socialist, or Libertarian... what we have now just can't make you happy.

reform4's picture

We are in a risk pool

Submitted by reform4 on Mon, 2008/12/22 - 3:24pm.

Actually, BC/BS pools all small businesses into a single risk pool. I think our pool is well over 100,000.

The problem is that the entire health care industry in this customer is based on a rob-peter-pay-paul system. Medicare reimbursements too low? Have a different schedule for for-profit insurance companies. Emergency room visits by people without coverage? Charge it off to the people with insurance in the form for $27 a pill for Tylenol in the rooms.

And, don't forget- if the insurance company parked their cash in bad investments (e.g., the stock market or real estate trusts), guess who gets to subsidize their investment losses so they still pay dividends? That's right, us premium payers.

Just give us a 13% national sales tax and give us single payer. Any idiot with a calculator can figure out we'd all be better off. Take a household income of $60k. Take out taxes, housing and food and other non-taxed expenses, say you have $20K in discretionary income (hah!). 13% on that 20K is $2600, which is TWO MONTHS premium for a family plan, and still less than an annual premium for a single.

It's a giant no-brainer.

Konacare's picture

single is the way

Submitted by Konacare (not verified) on Mon, 2008/12/22 - 6:56pm.

I agree with the author. I too am a small business owner and health care for me is absolutely unreachable at this point.
I'm at the age where preventive care can be beneficial in many ways.
I mean, all my friends are going to the Dr. and getting fiber optics rammed up their kazoo. Why not me?
I feel so....so left out.

Anyway, this sums it up for me.
(link...)

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