Health Care and Missing Benefits

Did you know that a significant number of small businesses don't offer health coverage to employees? Where you aware that about a very large percentage of companies in the U.S. have no health benefit offer for their workers? And, according to AISHealth.com, only 71% of large employers offer retiree health benefits; plus, only a few current US workers will ever become eligible for retiree health benefits according to NewsObserver.com. AISHealth also recently reported that a surprising 72% of Mississippi employers with less than 50 workers--one of the poorest states in the country--have no coverage for employees. The Center for Mississippi Health Policy has released this statistic from a recent survey of companies in that state.

Many small to mid-size employers are limiting their benefit offers to health insurance only, while others are dropping benefits altogether. Rising Healthcare costs – outstripping the ability of many workers and employers to afford health insurance premiums – have been the major cause of a long-term decline in job-based coverage according to a study released by the UCLA Center for Health Policy Research. So, the average American worker in a small company is faced with making some serious choices related to health care. Going solo with no way to pay for medical treatment is a very scary option, especially if there is no catastrophic care coverage. With no cap on expenses, one trip to the hospital could force most families into personal bankruptcy.

More and more middle- and low-income workers are being priced out of job-based health coverage each year because they can’t afford their share of the cost. In addition to that,
only 41% of Hispanics have job-based insurance according to La Raza. Historically, ethnic groups have a lower average of benefits than white employees. Many employers with small businesses holding less than 50 workers have a difficult time paying for health benefits, and often those who are on the low end of the income scale suffer the most with no insurance. According to a report by the Employee Benefit Research Institute in March, 2008, only 71% of all workers have a health plan that is employment based, and access to health insurance varies by company size.

The EBRI also reported that of the 20.5 million employees who have no insurance, about 50% of them are either working for a company with 25 or less employees or are self-employed. And, companies with 9 or less workers show that about a third of them have no health insurance. The contrast against companies with over 500 employees shows that only 10% of these workers go without a health plan sponsored by the employer. Their report was based on information supplied by the Census Bureau Current Population Survey.

Additionally, the Consumer Health Coalition (a non-profit organization that helps uninsured Americans get benefits) stated in February, 2008, that employees working for small businesses are less likely to have health coverage. When large companies negotiate with insurance companies, they have significant negotiating power because they have more employees to offer. A larger group of workers means better rates and richer benefits for a lower cost to the employer based on economies of scale. Conversely, many small companies often cannot afford health insurance as a benefit. A crisis currently exists in America with small businesses as indicated by reports from all over the country. Station WPXI in Pittsburgh is one more source reporting recently on the issue of uninsured workers. Insurance rates are based on the number of employees a company has, and many small businesses run into problems with a smaller risk pool and higher premiums.

One way to help out small businesses would be to set up guidelines limiting rate increases. Insurance commissioners in each state would need to approve the request to raise costs for a health plan by insurance companies before the rates were increased. Some states have rules in place to accommodate for these requests, but some do not. Surprisingly, the Pennsylvania insurance commissioner has limited power to regulate health insurance rates based on feedback from the Consumer Health Coalition. Also, discrimination based on pre-existing conditions or utilization should be prevented. Although these issues should be factored into the decision by the insurance company as part of the rate increases, they should not be the sole determining factors to raise the cost of a health plan.

On a federal level, the call for universal health care continues to be trumpeted by many politicians and other proponents who wish to nationalize the insurance and health care industries. Those who wish to have a national insurance czar who would oversee how every American would access medical providers are beating the drum loudly on this issue. However, it is a pretty scary thought to consider having the government dictate what doctor to see and when you can go for treatment. Although there are millions of uninsured people living in the U.S., there are options available that provide access to the health care system that are now in place without having to totally re-invent the health care wheel. The market place can adjust to provisions made in both the private and public sectors that will help anyone who needs access to treatment. Before sliding down the slippery slope of government controlled health insurance, the players in the American health care industry need to work toward better solutions.

Until next time. Let me know what you think.