State Small Businesses, Employees ‘Hard Hit’ by Increased Health Insurance Premiums

California small businesses and their employees may "take a particularly hard hit" this year as a result of increased health insurance premiums, the Contra Costa Times reports. In 1999, 2000 and 2001, premiums increased more for small businesses in the state than for larger companies, according to a survey conducted by the Kaiser Family Foundation. This year, small businesses face premium increases that range from a few percentage points to as much as 25%, and some health insurers also have increased copayments, the Times reports. Many small business owners have not reduced benefits or shifted costs to employees in the past, but the Times reports that "exorbitant" increases this year have forced some employers to move "in the direction of shifting costs to their workers." In response to complaints from small businesses about increased premiums, a number of health plans have begun to offer less expensive policies with fewer benefits. The policies often have larger deductibles and copayments for physician visits, hospitals and prescription drugs. According to health plans, the increased cost of prescription drugs and state mandates to provide coverage for services have prompted increased premiums. In addition, the state's aging population, which requires more care, and "lucrative contracts" for hospitals have contributed to increased premiums, the Times reports (Silber, Contra Costa Times, 5/19).