First Person: Rising Health Insurance Costs Are Hurting Our Small Business (Obama to blame!!!)

yahoo ^ | 11/10/2011 | By Ted Sherman

[tobyhill]

In our small real estate business, our employees are the reason for our success and we try to provide a benefits package that reflects those feelings. We have four full-time employees and three part-timers and rising health insurance costs are really hurting our bottom line. We may have to choose between laying off employees or reducing benefits to the existing employees to maintain everyone on the payroll.

The prices continue to rise each year, with the cost of employer-provided healthcare rising an average of 9% last year to an average of about $15,000 per employee. That's not what the insurance paid out, that $15,000 is the premium cost alone. The health insurance premiums we pay each month have risen more than the average; our costs have jumped about 15%. These rising healthcare costs have also prevented us from hiring more people; if we can justify the salary, we can't find the extra money to also pay for the health insurance. It also affects our ability to pay our current employees more money. Health insurance is necessary to find and retain good employees, so we must simply bite the bullet and pay for it.

Our monthly premium is about $2,700 this year, it was $2,300 last year and $2,100 in 2009. As it is for many small businesses, it's our largest monthly cost, exceeding our office rent or our truck leases. As costs continue to rise, we find ourselves looking at options we once thought we would never consider.

[lowbridge]

bump

[Blado]

Let’s go with a hypothetical...

Suppose you have two employes - Jack and Jill

You could lay Jill and Jack off
.
,
,

Or you could get rid of Hussein

[tobyhill]

This employer actually got off pretty easy, my rates are going up 23% this coming year and already went up 26% this last year.

[Mister Da]

There is no legitimate reason for employer provided health insurance.

Your employer has little interest in your health. It's really none of his business - it's yours. Your productivity is his only concern. If you can't or wont do your job, you can be replaced. Therefore, providing health insurance is a burden & an unnecessary cost of doing business.

Employer provided insurance is no wonderful benefit for the employee, either. Your choice of insurance is limited to what the employer offers - take it or leave it. Employees often remain with a really bad employer & forgo new job opportunities because they fear a loss of insurance. Lower level employees often pay for free or enhanced executive insurance thru higher monthly payroll deductions.

If given the choice, I'll bet many employees would rather be paid that $15,000 a year, & shop for & buy their own insurance, or just keep the money & buy no insurance at all.

If health insurance was sold like car, home, or life insurance, consumers would have choices, which usually means lower prices & better products. The current system limits competition, which increases prices & lowers quality.

The free market has always be the best value for the consumer. Health insurance is no exception.

[tobyhill]

You ever heard of benefit packages?

That's how we get the best employees we can find.

The system was working just fine before Obama came along and I'm not talking Medicare or Medicaid.

[Bluebird Singing]

Have you ever wondered how these “benefit” packages came to be in the first place?

http://www.u-s-history.com/pages/h1689.html

The Emergency Stabilization Act was passed in October 1942, which placed wages and agricultural prices under control. There were immediate wage restrictions, and in order to attract labor, the employers offered a range of such fringe benefits as pensions, medical insurance, paid holidays, and vacations. Because the foregoing were not paid out in cash, they did not violate the wage ceiling. Controlling output proved easier than controlling wages.

[tobyhill]

Benefit packages have helped hire and keep quality employees. To eliminate benefits now will not increase wages for employees because now companies will have to pay a fine to eliminate or not offer benefits.

[Eye of Unk]

I have been in the employment of the same job for 16 years, they have offered a health care insurance plan several times and hardly anyone was interested, its a seasonal job and all everyone wants is all of the paycheck for the few months of work.

I don’t live in the big city where its a honeycomb of worker drones that must be kept healthy to supplicate the queen be or the whole hive suffers.

With the economy in such a disarray awaiting Obamas exit its a no brainer that most people are refusing to partake of having their paychecks whittled down bit by bit, but should an employer decide to just give the benefits away to retain worker loyalty then so be it.

It all boils down to the fear of a future Marxist state for America. Remove the problem is the only solution.

[ChurtleDawg]

but how many people would be barred due to pre-existing conditions on the free-market? I read somewhere that around 50% of the population could not get a new policy because of one medical condition or another without their group insurance.
The fact is, nowadays, insurance companies will not sell you a new policy if you have even had a cold in the past.

[Mister Da]

As a long time employee & contractor, I can tell you that money talks & everything else walks. Benes are here today, & gone tomorrow, especially for lower level employees. And having money deducted from your paycheck sure doesn't seem like a benefit. The really sharp people you want to hire: They already know this! They aren't buying the "free undercoating" scam.

Health insurance premiums have risen every year since I can remember - 30+ years. This particular benefit has been a burden for employers/employees long before Obama.

I have personally heard both employers & employees curse the system. I have seen hundreds of employees suddenly laid off, & left with expensive choices to continue to insure their family. I have seen people who work for the spawn of Satan, but cannot leave their job in Hell because of an ongoing illness of a covered dependent.

This is the system you would perpetuate for some nebulous inducement to new hires? A system that is crumbling from inefficiency & inequity.

In the current consumer-unfriendly system, where privately acquired health insurance is very expensive, the employer has a real (& unfair) advantage over employees. But if widely available, market priced insurance were available to individuals & families, I believe businesses would quickly abandon employer provided insurance.

[Bluebird Singing]

Excellent post.

[Mister Da]

You raise a good question & I don't have an easy answer at hand.

People who have long term or permanent illnesses are a financial burden we all share. How we resolve & finance this eternal tragedy for families & society is beyond me. We must provide for the sick & weak among us, or become animals. Shame to the society that does not.

But I'm not sure that is the full responsibility of the insurance industry. If they want to assume that responsibility freely, that's fine, but to legally coerce them to do so is wrong, IMO.

Is it any fairer that a father must remain in a dead-end job, turning down great job opportunities, because a child is sick? How does the family prosper in that situation? How is that better for the child?

Right now, there are huge legal impediments to an open market. State line restrictions need to go immediately - nothing but a gov’t sponsored monopoly. Get rid of these so an open market can grow.

A transition period will occur. Some will stay with their employer provided insurance. Others will see the advantage of private insurance. I'll bet in 20 years, employer provided insurance will be history, except in unique situations.

[Mister Da]

Thank you!

Even a blind hog occasionally finds an acorn! :)

[tobyhill]

I have interviewed hundred's of people and almost everyone of those I interview ask if there is health benefits. I like when they ask because it shows me that their health is important to them and we did offer insurance until recently.

We never had increases of 30% annually until after Obama got in office. We had increases before that but it ranged between 2% and tops 6%.

Now with Obamacare we can look forward to either providing an insurance to our employees for about $450 per month or pay a fine of $2,000 a year. I know which one we're taking.

[Vatcha]

What the employer can provide is a group policy without prior condition restrictions. In the individual market the insurance companies don’t have to sell you insurance if they don’t want to. Its not that they say “with your situation and/or prior conditions, we’re going to charge you more.” They just don’t sell you insurance. So unless you have access to a group policy, you can’t get health coverage through health insurance. I have 3 people out of 11 at my company that would not be able to get coverage if they tried to get an individual policy on the open market, based on their recent medical history. On top of that for us the street price for individual policies had been anywhere from 15%-20% higher than the same coverage under a group policy.

[Mister Da]

You are speaking of the CURRENT system, with its built in state monopolies & over-regulation. I am referring to a new, open, free market system, as car insurance is sold now.

If an employer can provide a “group policy without prior condition restrictions”, then he must be buying that insurance from an insurance company. That “group” you refer to is an artificial contrivance, & has zero effect on risk calculations. For an insurance company that covers millions of employees in thousands of businesses, its risk is calculated on its total insured, not on individual groups, unless those groups are high risk occupations. Risk is far more ACCURATELY calculated when the group is very large.

So, insurance companies are already providing insurance “without prior condition restrictions”. No reason that cannot be extended to private health insurance, & in a free, national market, it likely would be available. In our current, monopolistic market, I'm not surprised it is unavailable to private insurance purchasers.

Folks tend to forget that the premise of insurance is to compensate for a calamity that may NEVER happen. If the premise is now changed to compensate for a calamity that has ALREADY happened, then the insurance industry can only survive by increasing premiums for everyone insured.

I don't think that is the best way for society to pay for long term care, as the insurance industry takes a profit out of every dollar that passes through their hands. But, I suppose profit is the only motivation, these days. Gov’t certainly cannot do a better job, as witnessed by Medicare/Medicaid.