Employee Benefit News: Coalitions advocate for health care reform as costs threaten SMBs

Employee Benefit News, 4/1/08
By Chris Silva

The availability of affordable health care currently appears to be the No. 1 concern on the minds of most small and mid-size businesses (SMBs). According to a study of 506 California business owners with less than 100 employees, 75% rank the availability of affordable health care as extremely or very important. Fifty-seven percent see health care financing as a shared responsibility among individuals, employers and government.

To help give SMBs a stronger voice in the health care reform debate, the Small Business Majority, a nonprofit organization based in Sausalito, Calif., last year started a coalition, Small Business for Affordable Healthcare, addressing issues of cost control, affordability, portability and non-discrimination against employer size or type.

"Small businesses are not really being served by the employer-sponsored insurance system," says John Arensmeyer, founder and CEO of the Small Business Majority. "The only way we're going to get this is if everybody steps up and says they're going to be part of a solution," says Arensmeyer. The coalition has the support of dozens of small businesses in California, and is seeking to expand its message to at least 15 other states this year.

A 2007 SBAH study found that 80% of small business owners in California feel that employers should pay something to provide health care to their employees - four times as many as those who felt that employers should not have to contribute anything (20%).

This shows that California SMBs have their employees' interests at heart, says Arensmeyer, and view providing health care as an obligation.

"The obstacle is affordability, and a health care market that severely distorts and limits the rest of our market," says Arensmeyer. "The success or failure of a business venture should depend upon innovation, product quality and hard work, not the cost of providing, or not providing, health insurance."

Can't go it alone

Shifting to Washington State, a study released last December examines the status of employer-sponsored health insurance among more than 100 small businesses at the Pike Place Market - one of Seattle's best known landmarks and tourist attractions.

Thirty-nine percent of respondents are uninsured (including both owners and workers); only 19.3% receive health insurance through their business; and 41.7% have insurance through another source (either a spouse, parent or individual coverage).

The results paint a bleak picture of the condition of health insurance at Pike Place, which could be considered a microcosm of what small businesses are going through nationwide.

"These people are working hard, and they love their jobs. They love the independent spirit of being an entrepreneur," remarks Joshua Welter, health care campaign director for the Washington Community Action Network, or Washington CAN! "But when it comes to health care, they realize that they can't go it alone. When it comes to health care, we've all got to be in it together."

The accounts given by workers and business owners alike at Pike Place describe their problems and frustration with a system they feel has failed them.

A wildlife artist heard about an employee at a neighboring business who had his girlfriend sew up a large, deep gash in his hand because he had no health insurance. An employee of 16 years for a photography business had two knee construction surgeries in the past, but one knee is getting bad again, often becoming painful and swollen by the end of the day.

Nowadays, however, she can barely afford a physical, much less treatment of the knee. Her employer wants to help, but is unable to afford buying health insurance for employees.

It's so expensive

DoriLea Gaffaney has been owner of the Soap Box for three and a half years, a shop at Pike Place that specializes in selling triple-milled soaps from Europe. Gaffaney currently pays $682 a month for a policy with a $5,000 annual deductible that still only pays 80% after the deductible is paid.

Her prescription drug coverage only pays $20 on a $300 prescription she was administered after doctors discovered a tumor on her kidney in February 2007.

She's had several tests that her individual policy doesn't cover. Creditors have harassed her for payments, and she's slowly going bankrupt from the medical bills.

As a result, Gaffaney has quit answering phone calls from the hospital and has cut off her treatment. "It's so expensive ... I'm finding it difficult to pay the premiums," she says, adding that she can't believe decent, affordable coverage is so hard to obtain. "I think it's abominable, [and] there are people worse off than I am.

People in prison are provided with better care."

Welter is encouraged that small-business owners are beginning to discuss the topic more openly and amongst themselves in state coalitions and organizations.

He and Arensmeyer were part of a panel that spoke with small businesses on health care reform at a Families USA conference held in Washington, D.C., in late January.

"The fact that small-business owners are speaking out about this is helpful," says Welter.

"They are a natural and necessary ally, and are very supportive of the types of health care reform that we're advocating for," Welter comments.

An SMB advocacy success story

An example of where effective advocacy worked occurred earlier this year when the Washington state Senate, responding to public outcry, voted to restore the insurance commissioner's authority to review insurance rate increases. Joshua Welter, health care campaign director for the Washington Community Action Network, notes the legislation could help employers and employees, as some insurers in that state have been accused of inflating rates after attracting a significant number of members with smaller rates during enrollment periods.

Washington state is also considering a bill proposed from its house branch that would create the Health Insurance Partnership. Small and mid-size businesses could join the partnership which endeavors to make quality coverage choices affordable by providing premium assistance to low-wage small business employees, and allowing businesses and employees to pay their premiums with pre-tax dollars.

(c) 2008 Employee Benefit News and SourceMedia, Inc.
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