Health care: The hidden business killer

From Mona Lori, Chicago, IL

Keeping Our Health Care Costs Down
As a small business owner, our employees have adopted high-deductible health plans with health savings accounts. Our HR team spends a great deal of time upfront educating our employees about choices, teaching them how to make the most of their health care dollars and encouraging them to find the best value using some of the tools that are available today. The result of this has not only reduced our health care costs, but has allowed employees to be in the drivers seat and make informed choices, take better care of their health and find cost effective health care services.

It's been a win-win situation for employees and the employer.

Regards,
Mona Lori
Founder
http://www.outofpocket.com

From Basil White, Sterling, VA

Here's a health care stimulus plan for small business that costs very little. Allow small businesses to pay their own way to participate in the Federal Employees Health Benefits Program. If the small business pays the Government's part of the premium and the small business employee pays the Federal employee's part of the premium, both parties can benefit from the bargaining power of the Federal Government at no additional cost to the taxpayer except for minimal additional program oversight.

This also allows the Executive Branch to put our money where our mouth is when we encourage small business to partner with the Federal Government.

From Mchael Sherman, TX

All I know is that we can not provide health insruace for our employees as the use of illegal labor has driven us out of most markets. Last week I bid a job that the only way I could match the low price the General Contractor said he had was to pay 1977 wages and no workmans compensation or any of the taxes,Social Security etc.

Before you see any improvement in healthcare cost or the ability of employers to provide this for their employees you have to look at what made it possible in the fist place.

An industirial base that produced products and goods. Corperations have sent these jobs overseas so they could have the goods made in plants that don't have OSHA or the EPA regulations to protect the workers or the enviroment.

Every job lost in the US isn't just that job alone, but also affect the livleyhoods of the people who provided goods and services to that industry. Also the tax base shrinks, as the tax base shrinks the cost of goverment per capita rises and so taxes rise. When taxes rise you have less to spend on goods or services, or in the case of business the profits fall or disappears. So you enter a cycle of business wanting tax breaks or sending jobs overseas. As Tax revenues start falling what is the usual course of goverment? Rather than determine why tax revenues are falling and fixing that, they raise taxes.

Until we wake up and realize that we are living on credit by purchasing goods and services from countries that haven't the laws and regulations we do, that we can't compete with them as the playing field isn't level. The quality of living will continue to decline in Americia.

As your article pointed out, the insurance companies are becoming too large (consolidating), creating a lack of competition. I see a parallel with the "too large too fail banking system". I believe we are going to see a melt down in the health care system as you are currently seeing in the banking industy.

The rising cost of health care is in part to the fall in real buying power for the average americian. As the national debt increases the value of the dollar suffers. As we send more jobs overseas and have more people working for less, the ability to pay the debt decreases and their dollars won't buy as much. Therefore a larger piece of a dwindling income is neededto pay for healthcare.

From Brian, FL

I'm self insured and was rudely awakened when I learned that I paid over $2,000 more than I needed to recently. It happens every day and it happened to me by simply going to the hospital that my wife’s doctor referred her to for two MRI scans…and then come to find out that if we would have gone down the road a few miles to a different facility we could have had the same procedures performed for $2,000 cheaper! That big of a difference…same city, same procedure…MUCH different price. Well, that ticked me off enough to start a new business which is simply focused on one thing and one thing only…to expose what medical facilities charge for procedures. It's just getting started but if you now go to http://www.NewChoiceHealth.com you can identify what each facility in your community charges per procedure. It's eye opening to see the difference in pricing schedules…sometimes by more than 100%! A key that we must all educate ourselves and employees on is that “HEALTHCARE IS RETAIL”! Meaning that you can and should shop for your healthcare, insured or not, because by doing so you can save a significant amount of money… oh yea, in addition to showing pricing I am also building cost savings tips which will help educate you in how to negotiate rates even lower. It's a hidden world out there that we're exposing and I hope NewChoiceHealth.com can save you some money. Please share with your friend and or share your feedback…that's how it will only get better. Good luck as we all move forward!

From Anonymous

insurance reform,,,
not health care reform….

From Evan Lakewood, NJ

I, as a small employer (10-11)employee, will pay 1/2 the premium for a single person and the empoyee pays the difference plus any extra for additional family via salary deferral which is exempted from some federal taxeable income. Thus they save some in taxes. Sadly, the state of NJ gives no break for people who are paying for their own medical insurance. If any employees have coverage from their spouse then can elect not to participate.

From Peter, San Jose, Ca

Health industry is out of control and this causes a lot of stress for business owners and enterprises in the US. Medicines are ridiculously expensive. It contributes to the decision why companies are moving jobs oversea and the chain reaction goes on. The only way our country can recover from the spiral downward is to reduce health care cost so employers can afford to keep business here in the US. Why not implementing a public healthcare system to cover all the uninsured as Canada does and leave the private healthcare system for the riches who can afford it.

I can't imagine a developed country like the US can't cover all its citizens with free or low-cost healthcare as other much less advanced countries do, like China, Viet Nam.

From Rob /Las Vegas,NV

Alfred Newman: Thank our govt. for you and millions of other citizens getting to enjoy the privelliage of being underpayed and underinsured. Uncle ulcer has offered tax incentives to their big business compadres for years. Now we are seeing nationwide the results of a service economy, opposed to a producing economy. The results of the greed of people running corperations and their top execs ie: 400% or more increase in pay differential oover the last 25 yrs. That is workers pay 6.00- 24.00 opposed to Top execs, not those of you with meaningless titles, 14.40-5760.00, for those of you let down by our ever less demanding and able to teach school systems. Thomas Jefferson said that our constitution could not survive a corrupt society. I feel that until the people living large at everyone elses expense gain a reality that they are only better and more deserving than you or I in their own minds, and all you hero worshipers figure out that you don't make heros and idols based on BLING, FASHION, CARS, MONEY, etc. all get back to the basic concept of our country, the one that states for the COMMON GOOD. Things can only get worse. BRING OUR INDUSTRY HOME! FIX OUR POWER AND FUEL PROBLEMS WITH THE TECHNOLOGY THAT IS SITTING ON SHELVES BECAUSE GREEDY PEOPLE WOULD LOSE MONEY IF IT WAS BROUGHT TO MARKET. You power mongers will find more ways to make money. Thats all your life is, But when you take awaY EVERYONE ELSES DISCRESIONARY INCOME, ABILITY TO SPEND. You Sign your own demise. Of course the top people of organizations like Walmart probably are laughing at blogs like this. Rest assured, the word is getting out, the taxpayers are getting tired of paying your employees health and pension benefits. People are once again figuring out that strenght is in numbers and that they have been fed a line of crap over the last 30 or so years, that there are plenty of laws to protect workers on the books, you don't need to band together. Ever try to stand alone and use those protections working or used to have a job, or skill that someone else in another country is getting paid pennies to do. Wages so low that people from the countries with what was our industry still come here in hoards working for less and bringing us down more. Lets not hate them, lets work with them to organize so we the people thake back our lives from the KINGS,lol, in their own minds. IT"S TIME!!!

From Charles, Boston MA

Sean in Carlisle. I'm not sure what you mean by "normal" people in your post below, but let me assure you that the Mass Connector policies are not inexpensive and certainly are not government handouts. I'm middle-class and out of work and pay $831/month for my family coverage. Hardly free. BC/BS and the teaching hospitals in Boston are greedy; that's why they increased your premium.

From ben cleveland, ohio

I worked for a medical billing company for several years and witnessed first hand how carriers operate. It is a complete sham and they are killing small business. There is zero transparency for carriers and something needs to be done. The HSA idea was great in theory but a joke in reality. We need to get to the point where we can buy health insurance like we buy car insurance, with competition. With this, we can aslo not have pre-existings held against us.

From Alfred E Neuman, Austin, Texas

Our company handled it by laying off thousands of people, exporting jobs to India and Brazil, where they don't have to pay benefits, and paying our executives exorbitant salaries and bonuses. Isn't that how everyone does it? (No, I'm not one of the favored few, sadly)

From Chuck Foreman, Dawsonville Ga

I get healthcare but the deductible has risen from $200 to $3000 in the past several years.I still pay for this plan which is really a catastrophic plan rather than one I can afford without hardship. My doctor co-pay has risen from $15 to $40.
It's a healthcare plan but I don't feel secure. I am 61 1/2 years old and I hope that the medicare swystem I have paid into for over 40 years will be there when I reach 65. I don't trust government to honor the committment they have made which for those who don't get it, I have paid for all my life.
Pete

From Pat Phillips, West Brandywine, PA

My husband is a sole proprietor and I am a personal assistant to a retired executive (part time, no insurance offered). We have four children (two in college). Our premium went from $1,000 to $1,600 in January of this year. Yes, we belong to a chamber and this is laughingly the reduced cost offered. I have a condition for which I need monthly IVIG at a cost of @ $4,200 per month. No insurance company wants us. My husband is attempting to secure a second job (only for the benefits). This is a devasting issue for small businesses. We don't need health care reform, what we need is insurance reform. We want to do the right thing by having insurance but at what point is enough, enough.

From Lisa, Austin, TX

Insurance industry is out of control!
I am self employed and basically uninsurable because of a pre-existing condition that in no way has affected my health over the years. If I need to hire an employee, I doubt I'd find anyone with the right experience because I cannot afford to offer insurance coverage. The Texas state risk pool *might* insure me but the rates are through the roof. The situation of millions of uninsured Americans is shameful and will eventually ruin our hospital systems as well.

From Carmen, Miami Florida

I am an Employee Benefits Broker in Miami, Florida. We have been helping employer groups (small and large) gravitate towards Consumer Driven Health Plans for the last 3 years in hopes of lower premiums. The majority of our small groups, however, continue to receive annual rate increases that are incomprehensible. Last year, for example, most of the increases oscillated between 20-low 30%, and when questioned, carriers argued that they were "adjusting improperly priced" products. The same groups are getting hit with larger increases this year…how do we explain that?

From Sean, Carlisle, MA

The Massachusetts program is BAD! What no one talks about is the increases that "normal" people got hit with because of the low cost plans they force to offer through the state program. My health insurance (BCBS) went from $1,250/month to $1,650 last year. When we called to ask why we were told all of the plan premiums went up to cover the losses they had from the state offered plans. Once again the middle class gets screwed!

From Rebecca Atwood, Timberville, Virginia

I co-own a small business – 2 owners, 2 part time employees. We, the owners, work on average 80 hours a week each, and pay ourselves for much less. We can't afford to provide medical coverage for ourselves, never mind our part time employees. For 15 years, (up to 2 years ago when I was finally able to go on my husband's coverage) I bought my medical insurance over the counter. The last year I purchased insurance for myself I was paying $455/month – for a healthy non-smoking woman who saw her OB/GYN once a year, and her GP once a year for annual check ups. We are fortunate in that both our part time employees have coverage through other means. I believe in universal coverage, especially for basic care. However, I do not see how a small business which is already struggling in today's economy, can take more of a hit.

From Charles, Boston MA

Let me tell you that the real story of Massachusetts' mandatory health care coverage has been missed. It is an onerous, burdensome law. I have been out of work since last August but MUST buy health coverage at a cost of $831/month. I don't find that premium affordable in the least, yet the plan I have is the second least expensive option available. I write "must" because if I don't have coverage I would actually be fined. If states require citizens to have health insurance they should at least make it available at reasonable prices. Anyone else here think $831 is reasonable?

From jan – toledo ohio

Lare employers do not purchase health insurance. Rather, they self insure and use health insurers as administrators in much they same was as CMS uses fiscal intermediaries. Why not national health insurance?

From Carol Isaacs, Deseronto, Ontario

After 12 years of being self-employed and no health coverage except for my husband's VA coverage, he developed diabetes and our local VA hospital was threatening to close. We had a choice, move closer to another VA hospital but that still didn't help me out, or move to Canada. We've been running a fantastic business, the same one we did in New York, in Ontario now for 13 years and don't regret a day of it because my husband has had several minor operations and full prescription coverage that hasn't cost us a dime out of our pockets. I love the U.S., but could never afford to live there ever again. At least now I can sleep at night without worrying about the cost of health care.

From mksledge

my employer, an investment firm, informed me on 01/21/2009 that my insurance would be cancelled on 02/28/09…i am paying for my husband's coverage since his business does not offer insurance…we are 50 & 55…the net cost to me is going to be $1,000/month for a policy which will have a $6,000 deductible, if they will cover us – been denied already and we are in good health – nothing major in the past 3 years!!! How am I supposed to come up with the funds to pay this premium??? The amount exceeds our house payment, car payment and insurance for each combined!! And – we pay $12,000 a year for the privilege of being covered IF we need it?? And then have to pay $6,000 out of pocket first??? Where on earth are we to come up with an additional $18,000??? Our girls are raised and gone – we were looking at this time of our life to really prepare for retirement – pay off the house, reduce all debt to zero and save, save, save!! Cannot do that with a new $12,000 bill every year!! We qualifiy for no government assistance – our combined salaries are $89,000……When is this nation going to finally address the actual MIDDLE class Americans needs? We set our goals to get ahead – and get pushed back down every time we just start to get there….It is disheartening, frustrating, stressful and just plain wrong….we pay our bills, do the right thing – don't over extend ourselves and yet – the health care coverage premuim could put us in financial peril…..

From P.S.

My small farming business cannot get health care for me, it's key employee. Why? Because it is an Iowa corporation and I am a Pennsylvania resident. Luckily, I am also an attorney and joined the Bar Assn in PA so that I can get health insurance as a group – otherwise, myself, as a group of "one" would have less coverage and higher premiums. I would like to move but am afraid of losing health insurance.

From Samuel Hunter

We have a hybrid coverage with a high deductible health plan, matching for an employee health savings account, and a service-based benefit to cover gaps between the HSA and the deductible.

The costs for employees over 50 are simply outrageous.

In our area most small medical practices cannot afford to offer insurance to their own employees. As an owner of such a practice, I haveseen costs double and reimbursement to providers be flat and decrease the last five years. We have seen our overhead also rise from 8 to 15% just to collect the money owed from insurers.

A large culprit is insurance industry, which is the most profitable business in the world, and seems to have no accountability, and their anti-trust exemptions permit them to operate like organized crime with impunity.

A few simple laws is all it takes to fix this travesty. However, the Federal government has a terrible track record for managing and funding health care incuding the disasters which are the VA, Medicare, Medicaid, and TRICARE.

From C. Steven Tucker

My name is C. Steven Tucker. I had the distinct privelage of being interviewed for this particular article by Patricia Gray. Two of the Small Business Owners listed in this article (Steve Cole & Northridge Holdings)were also interviewd. They have both been my clients for over a decade now. Each year as the article mentions, I have made recommendations to both clients to keep their health insurance premiums low whilst maintaining quality health insurance coverage for them and all of their employees. The best way to do this is through the use of CDHPs (Consumer Driven Health Plans) These products such as HSA qualified HDHPs and HRAs (Health Reimbursement Arrangements) are the only way for the self employed and Small Business owner to maintain quality coverage for themselves and their employees. Most especially during our current economic situation. If you are a Small Business owner or you are self employed please take the time to educate yourself on the aforementioned insurance products. These products have significantly lower premiums and tax advantages alloted by the IRS that have never been seen before in the health insurance market. If you are looking for expert advise, at no charge to you, please feel free to contact us Toll Free (866) 724 7123 or visit our brokerage site at smallbusinessinsuranceservice.com

From John Kim Atlanta GA

After being in training for more than 17 years, I finally started a primary care clinic offering an integrative approach to medicine focusing on wellness rather than illness.

I have decided to opt out of all insurance plans. Despite the economic difficulties, the business has been growing steadily because we provide much needed new approach to health and healing.

However, we do not make enough to offer insurance coverage to employees at this time. The figure presented to me equalled an extra payroll per month.

Being a primary care physician, I can provide most of their needs. I am constantly upgrading our capabilities in our office in terms of being able to provide injections and IVs so that if one of our employees need the services, it can be provided.

I advocate for high deductible insurance for employees (up to $5000) but recently, one of my employee's husband went through a major surgery and then the company closed doors. They are effectively not insurable.

Recently, we opened a community clinic services for people for a flat fee of $50, knowing that there are other people in need. I made arrangements with radiology group to extend a discounted rate and contracted with lab for discounted rates. The next steps are more difficult. What happens if they need specialists or require hospitalization?

I admit that I don't have all the answers, but I hope that my small efforts will contribute to a collective solution.

From George Heathcote,Madison, WI

As of Janaury 1st, 2009, IRC section 125 Flexible Spending Accounts (FSA's) can now be used to pay for monthly medical premiums, in addition to out-of-pocket medical, vision, dental, etc. expenses, and dependent care expenses. For small employers under 25 employees, the employer can now offer a fixed amount per month/year to go toward whatever the employee chooses,as a pretax employee benefit expense. This helps the business to control operating budgets regardless of increasing health care costs. This plan is simple to adminster and there are some very inexpensive TPA's to manage the plan. (8 employee plan is $40/month.) Any funds not used in the 15 month period reverts to the employer, not the Government.

This is also good for the employee who can contribute pre tax also. Then the emplyee can choose the benefits they want to use the money for. With a 15 month period to use the money, and including medical, dental and vision care premiums, there is no problem using the flex plan dollars. The employee must submit expenses to the TPA and that is about it.

As far as the employee getting a health plan, there are multiple options. For a small employer, the employer can get a group plan and still use the FSA and fixed monthly contributions. Or each employee can get thier own plan and have many choices based on their personal situation.

What about employee who are uninsurable who can't get full coverage or any coverage at all? Well in most states the state has a plan for these people. State high risk plans are more expensive than preferred private health care but still an option. Also, using the FSA, usually only one person in a family would have these challenges, leaving the rest of the family to qualify for private insurance.

Though not perfect in every situation, there are only a few instances/employees that actually have real challenges. This is a great solution for the small employer. Offers good benefits where there otherwise may be none. Puts accountability on the employee to take accountability for their health and life choices.

The most common problem I run into with this is the employee who wants and all expense paid smorgesboard of options and feels the employer owes it to them. Second most common challenge is helping hte employee to understand and maximize this benefit for thier situation.

I like presenting options rather than barriers.

From TSL, Vancouver, Canada

My company began moving facilities to Canada when health costs became too much of a burden on planning. Taxes are higher and labour costs are more, but the tax code is 15% the size of the US one and most health coverage is paid for out of the tax base. All citizens get a single card usable anywhere in the country.

From Bob in Camp Hill, PA

I do not have any constructive comments but to give more credence to your story. I ran a small business for 29 years with 4 or 5 emplyees and gave everyone full medical insurance coverage. We closed the business three years ago and the cost of insurance was one of the major reasons.

From John Manning, Orlando, Florida

I am an Owner of a small construction consulting business and we currently provide 100% paid health insurance for all our employees (they have to pay for family coverage). Every year it goes up. Our agent prices alternatives and provides useful ideas for reducing costs like HSA. Most of us came from large corporations and to date no one has had a good explaination of why insurance companies are allowed to put individual companies into small groups for medical insurance and charge more. It seems that the rates should be developed more in alignment with how Workers Comp does except with other type of variable. No one can tell me why a healthy 40 year old working for Small Busines A is charged more for health insurance than a healthy 40 year old working for GE or someother large corporation.

From Laura, Georgetown TX

I am newly self-employed, and do not yet have an income from my business. I pay a nanny to care for my children.

Sadly, even though she deserves it, I provide her no health coverage. She is paid $2,000 per month, just enough to support herself and her two children.

Last week, she was in the hospital and received a $3,000 bill for the 4 hour stay. This week, she has another $400 in medical bills.

An insurance premium for her and her family would run $1,500 per month, which neither she nor I could afford. And she falls between the cracks on the Medicaid question.

So she's piling on the debt.

I believe it would be the right thing for our country to have a mandatory system in place. This would lower our premiums, and justify a requirement for no pre-existing condition exclusions. A minimum standard can be set by gov't, and then citizens could choose extra perks based on their own interests or needs.

I lived in Germany for 7 years, and that is exactly what their system is (it's not socialized medicine as the opponents claim). Every person is required to carry insurance, either through an employer or privately, and there are at least 20 companies I know of.

No insurance provider can deny coverage for the state-required minimum. Premiums are gov't supported for low income.

Result? They live longer. They are honest with doctors – that is, they don't hide pre-existing conditions – so they get better care.

Paperwork is ZERO, so docs concentrate on providing healthcare instead of paperwork for insurance companies looking for a reason to not pay.

Healthcare costs are much lower – yet the care provided is better! Don't worry, doctors still make a comfortable living, as they rightfully should.

Oh, one more thing: doctors in Germany MUST accept patients on all public health plans, unlike in the US. Our Medicaid system is so ridiculous that when a patient calls a doctor asking, "Do you accept Medicaid?" the answer isn't no, it's "H**l no!"

So that's another thing. We need to require that doctors performing work covered by Medicaid or any national system accept this. And it needs to be made much less of a burden for doctors to do so. Why is it that gov't contractors can get paid $1,000 for toilet seats, yet only a couple of dollars for a health checkup? What's more important?

From dan ford saint charles missouri

We are a medium size construction company in Missouri covering 13 employees and their families. About two years ago we started contributing the employees deductible ($1500.00 single $3000.00 family) into a non-taxable HSA. The money is non-taxable to the employee but deductible to the corporation. That way we could raise the deductible on the policy and saved almost $40k on the premium. The cost to fund the employee deductible was about $30k. So net we saved $10k. The employee had no out of pocket cost since we funded the deductible and the company saved $10k on the policy. It was a win-win for everyone. There were certain requirements on the type of policy you had to provide but there were no significant changes for the employee.

From Blanca, San Diego, Ca

I have a billing an collection business and sell health insurance. The way I approach this issue is by offering my employee's health insurance as an individual policy which is much cheaper, but not always guarantee's coverage. I also combine it with AFLAC coverage and this make it affordable for both me the employer and the employee.