Small Businesses Hit ‘Hard’ By Increasing Health Insurance Costs
Small businesses -- those with fewer then 50 employees -- have been hit "particularly hard" by increasing health insurance premiums, forcing many employers to shift a larger portion of health costs to their workers, according to an issue brief released Tuesday by the Center for Studying Health System Change. For the report, HSC researchers conducted site visits in 12 communities nationwide in 2000 and 2001 (HSC release, 10/15). According to the brief, small business experienced on average a 14.5% increase in health premiums, compared with 10.2% for business with 200 or more employees (HSC, "Cutting Back But Not Cutting Out," October 2002). As a result, small employers were "more aggressive" than larger businesses in implementing cost-shifting measures, including requiring employees to pay higher premiums, copayments and deductibles, and reducing benefits. HSC President Paul Ginsburg said, "Small employers pay more for coverage and typically have lower-wage workers then large employers, so rising premiums hit small firms harder. With today's weaker economy and even larger premium increases, more small firms will drop coverage altogether." A second HSC issue brief found that insurance brokers can provide "valuable services" in assisting small employers to obtain health coverage, including explaining benefits to employees and resolving claims disputes with insurers. Brokers also can educate employers and workers about public insurance programs and state policy initiatives to expand coverage, according to the study (HSC release, 10/15). The first issue brief, "Cutting Back But Not Cutting Out," is available online. The second issue brief, "The Role of Health Insurance Brokers," is available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.