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Tuesday, February 03, 2009

The part of massive unemployment that no one wants to talk about
Posted by Jill | 5:36 AM
It isn't going to be just the unemployed who lose their health insurance:
Even before the recession, owners of the smallest businesses had struggled to absorb the inexorable annual rise in health premiums. The share of firms with fewer than 10 workers that offer health benefits has declined by 16 percent since 2001, to 49 percent, according to an annual survey by the Kaiser Family Foundation and the Health Research and Educational Trust, while the rate in larger firms essentially stayed flat.

The economic downturn has only accelerated the pressure on small-business owners to pinch every penny, and many feel they have few options but to go after employee health coverage.

Surveys suggest that rising premiums have prompted more than half of small businesses to reduce benefits, raise deductibles or require workers to shoulder a larger share of an ever more expensive pie.

Workers in firms with fewer than 25 workers are now twice as likely to be uninsured as those in larger firms, according to the Employee Benefits Research Institute. For those small-business employees who do have insurance, the share with high deductibles has more than doubled in the last two years.

Yet for many small-business owners, it can be excruciating to reduce or eliminate benefits for employees who have long been treated as family and who continue to work at their sides, every day.

“When it’s a small business, it’s personal, and the impact is more emotional,” Ms. Allen said. “It’s not just about dollars and cents. These are actual people, and they’re very important to me. And I care about them.”

With the help of her insurance broker, Ms. Allen is exploring whether her employees could afford individual health policies if she provided them with stipends equal to about half of what she now pays for their health care. She is also researching whether it may make sense to shift her workers to a personnel leasing firm with more affordable group coverage, and then rent them back.

With her current insurance policy up for renewal on April 1, the clock is ticking.

“Either way, I’m going to make sure they have coverage,” said Ms. Allen, whose sales were stagnant in 2008 after two years of exponential growth. “That’s very important — to make sure they don’t feel I’m just cutting expenses and pulling the rug out from under them.

Ms. Allen is an unusually empathetic company owner, and she's trying to find a way to keep her employees insured, though essentially laying them off and then renting them from a temp agency in order to get them coverage sounds to me like a pretty unattractive option for the employees, though less unattractive than being thrown out on the street. But many of the small businesses that the Bush Administration spent its terms trotting out as examples of why we needed more and more tax cuts (even though they didn't benefit all that much from them) are struggling with this compact between employer and employee -- something they would not have to worry about if we had single-payer coverage and took health care out of the employment system altogether.

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Blogger Charles D said...
I own a very small business with only one employee - myself. I currently pay $4500/year to BCBS for the privilege of receiving their discount on drugs and services. Should I spend over $10,000, I might then qualify for actual coverage. This is the best policy I can afford for myself and my family.

In the past, I could contribute excess income to my Health Savings Account, but like most Americans, I no longer have excess income and am lucky to have income at all. If things get worse, which is highly likely, I could lose what little coverage I have.

A single-payer health plan is the most effective stimulus we could give the economy. It would relieve businesses of an enormous burden allowing them to reinvest or at least not layoff as many workers. It would give those Americans still in the middle class much greater security and no doubt stimulate a spike in consumer demand for all goods and services.
2/3/09, 10:59 AM  
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