State’s Small Businesses Hit With Largest Insurance Premium Hikes
Health insurance premiums for small businesses in California rose higher than did premiums for any other business sector, the Sacramento Business Journal reports. A new study by Managed Care On-Line, a health care information company, evaluated policies in effect for the first four months of 2001, finding that premiums for businesses with fewer than 50 employees rose an average of 20% this year, compared to an increase of 17% last year. Individuals, who were "socked" by premium hikes of 18.3% last year, experienced only a 9% increase this year. Premiums for mid-sized firms with 50 to 999 employees increased 4.5% this year, compared to 13.1% last year. Employers with more than 1,000 workers experienced a 7.3% increase this year, compared to 8.2% the year before. The study found "huge cost variance by location," with some counties experiencing greater hikes than others. The study stated that health plans are trying to expand their market by "wooing" mid-sized businesses and individuals. However, high rate hikes and the slowing economy may deter small businesses from offering health coverage to their employees, Peter Lee, executive director at Pacific Business Group on Health, said. "This is not a slayable dragon. We are talking about a potential doubling of health care costs in the next five years," Lee said. Through Pac Advantage, a statewide health plan purchasing pool for small employees run by Pacific Business Group, small businesses will have an alternative to traditional plans, Lee said. Pac Advantage is developing a "cheaper" plan that "combines a fixed number of preventative visits with catastrophic medical coverage," levying a "hefty deductible" on all care that falls between those two categories (Robertson, Sacramento Business Journal, 6/4).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.