A new study reveals a frightening trend among small businesses and their employees. Access to affordable, effective health care insurance is becoming increasingly unaffordable, leading to a gap between high-wage earners and those who qualify for public health assistance.
The study, by the Northwest Federation of Community Organizations and Oregon Action, surveyed 388 businesses with 50 or fewer employees from May to August 2006 and found that an increasing number of individuals employed by small businesses are underinsured or have insurance with high deductibles, co-payments or other features that deter access to medical care.
Over 68 percent of responding companies said they do not currently offer health insurance plans to their employees, with an overwhelming majority citing cost as the reason it is not offered.
Anita Smith, owner of Hannah Bea's Bakery, said a small business's inability to afford health insurance is an "understatement."
In the five years Smith has been in business, she said she has been unable to find an even remotely affordable plan for herself or her employees. Along with fees, taxes and other costs, she doesn't know if she will ever be able to afford insurance if they continue at their current rates.
Of businesses who do offer health insurance, 65 percent have faced an increase in health care premiums over the past two years, according to the study. Unwilling or unable to incur those additional costs, 91 percent of the business owners in the study said they are increasing the amount of co-payments and deductibles to employees' plans. A smaller percentage switched to a health insurance plan that offered fewer services, while also increasing the cost of deductibles and co-payments. The remaining businesses had to drop health care entirely.
"For 25 of the 29 years that I have owned Gepetto's Restaurant, I was able to provide health insurance for my employees," stated Ron Roth, a study respondent from Ashland, Ore. "… we had to increase the cost of deductibles and charge employees for a portion of the coverage. Finally, a few years ago, we were no longer able to provide any coverage at all."
The study covered businesses in Oregon, Washington and Idaho and found the number of small businesses offering health insurance dropped by an average of 11 percentage points for businesses in Oregon and Washington. Many of these employees earn minimum wage and are supporting families. One employee respondent from Everett, Wash. told surveyors he was working about 100 hours a week at two jobs – neither of which offered insurance plans.
"I am fortunate that so far my health has been good and I haven't needed to see a doctor," said Ajaz Ahmed, a Pakistani immigrant who moved to Washington in 1999 when he was 19. "I would be willing to pay more in taxes for a health care system that covers everybody. It's the right thing to do."
The future doesn't look very bright to many of the survey's respondents. About 86 percent of small business owners surveyed said that providing health insurance in the future would be a "significant challenge." Competition with larger businesses, dealing with the hassle of insurance and expense were all cited as reasons these businesses would have trouble providing such coverage in the future.
With insurance costs increasing, authors of the report say primary responsibility lies on the state governments, and ensuring access to health care "should be a high priority for state policy makers across the Northwest." The authors of the study recommend three main ideas for closing this gap in coverage:
• "Create opportunities for shared responsibility for quality health insurance" by offering a way to pool resources to get more comprehensive coverage.
• "Increase access to public health insurance programs" by expanding eligibility.
• "Increase oversight and transparency in private health insurance markets" to better understand why premiums are increasing.