Small firms scrapping, scaling back health plans

[Omaha Steve]

Source: AP

By DAVID A. LIEB

JEFFERSON CITY, Mo. (AP) - Faced with high health insurance costs, a North Carolina brokerage passed the buck on to its employees, a Texas public relations firm switched from group insurance to stipends, and a Missouri travel agency let its workers walk away instead paying for insurance.

Across the country, businesses already strapped by the economy to turn a profit are sacrificing or scaling back employee health insurance plans because of their escalating costs. The crunch has particularly socked smaller employers, who have become a centerpiece in the debate over how to overhaul the nation's health care system.

In recent weeks, small business owners have pleaded their case to the White House and Congress. Top Democrats in both the House and Senate have announced probes into how health insurers price their policies for small businesses. And lawmakers have proposed a variety of insurance rating changes, mandates and tax breaks to try to control costs.

That comes against a backdrop of some stark statistics:

- Small businesses are paying an average 18 percent more than the largest firms for comparable health insurance policies, according to a study financed by the Commonwealth Fund.

- Many small businesses are facing double-digit rate increases for insurance coverage this fall. Insurers are requesting small group rate hikes of 10-15 percent in Ohio, an average of 15-16 percent in Maryland and as much as 20 percent in Washington state, according to an informal survey by the National Association of Insurance Commissioners.

- The number of businesses with three to nine employees that offer health insurance has shrunk from 58 percent in 2002 to 46 percent this year, according to the Kaiser Family Foundation.


Read more: http://apnews.excite.com/article/20091118/D9C1S2VO0.html

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