More Small Firms Drop Health Care

[AlphaCentauri]

Source: WSJ

Accelerating health-care premiums and sharp revenue shortfalls due to the recession are forcing some small companies to choose between dropping health insurance or laying off workers -- or staying in business at all.

Sheryl Weldon, owner of Commerce Welding & Manufacturing Co., saw health-insurance payments increase to more than $800 monthly per employee from about $200 five years ago. With monthly revenue down 10% since December, Ms. Weldon stopped providing health coverage to employees, including one being treated for prostate cancer, for the first time in the 64-year-history of the Dallas sheet-metal company.

Ms. Weldon and several of her 14 employees are going uninsured and the third-generation business owner is struggling with the emotional toll of the decision.

"I have a terrible time handling that I can't give them that coverage," says Ms. Weldon, 52 years old. "How do you expect someone to be at their job everyday and perform if they can't be healthy?"



Read more: http://online.wsj.com/article/SB124329442612051953.html

[LooseWilly]

1. I just wonder what it takes for a story to qualify for interest at this point.

I mean... I've been through the cracks for over a decade... so I'm out of touch... but this sounds like the sort of story that should have resonance. I just don't know though. Hell, I'm not even sure who the story has to have resonance with in order for anyone in a position to make decisions about upcoming changes to hear, let alone give a shit about, the story...

[crim son]

2. Interesting perspective.

I was covered all my life until my divorce last month, and I have long-standing health problems. Thing is, I'm looking for work and while health benefits would be great, I am no longer assuming they'll come with the job. I have an undergraduate degree which means nothing. What means something, is that I am uninsured and quite literally cannot afford to insure myself. I have great empathy for small business and blaming them is not an answer (not that you're blaming anybody, obviously).

[eridani]

11. The problem is parasitic insurance companies, not small business n/t

[Common Sense Party]

3. Health insurance never should have been foisted upon employers

in the first place. To tie health care coverage to one's employment never made any sense.

[DollyM]

4. Didn't that start after WWII as a benefit?

I think health insurance started as a benefit package after WWII along with things like pensions. We had a lot of young men coming back from war and starting families. Employers were anxious to help them get on their feet. But health care costs have gone out of control due to greed on the part of the medical profession as well as the insurance companies. It is a vicious cycle, health care costs go up, insurance rates go up, health care costs go up more, insurance rates go up more, meanwhile the person who is paying for these things is getting squeezed in the middle with all the rising costs. If we just did away with insurance companies we might be able to get a handle on health care costs.

[Common Sense Party]

6. Yes, it did. Some employers may have offered it before the war,

but it became commonplace after.

[pattmarty]

22. DING, DING, DING, you win the prize!!!!!

[happyslug]

24. Actually During WWII, wages were restricted during the War, and there was a labor shortage

The Labor Shortage was caused by the needs of the Military for Personnel AND the drop in births after 1927.

With the war in full swing, labor was in short supply, so to prevent workers from jumping from one employer to another for higher wages (And the subsequent tax increase for all of them were making things for the War Effort) the Government imposed wage and price regulations. Larger employers quickly found out that the best way around those regulation was to increase benefits, namely Medical benefits. Thus Employee based medical care was born. While wage controls ended in 1945, Congress came to like Employer Based Medical Benefits and made it fully deductible (and other Favorable tax treatment) starting in 1970.

[ejpoeta]

17. it may have made sense in 1945... but people worked at one job for their whole life.

now that is more the exception than the rule. as evidenced by how many people are losing their jobs daily now. imagine someone losing their job who has had a problem in the past.... like cancer, or diabetes.... now they're through a giant hole in the net. it's just insane. we really need to look at other countries who now offer a national healthcare or something like that. see what works and doesn't work about them. and let the health insurance companies do that supplemental insurance they do now for medicare.

[DollyM]

36. one of those "giant holes" here . . .

My husband is diabetic, try getting private medical insurance with that.

[Gormy Cuss]

33. It made sense when most people had no health insurance.

It worked fairly well for about 40-50 years when most plans were indemnity insurance. The problem arose when that model evolved to managed care options (HMOs, IPOs) and the insurers broadened the scope of coverage in an extremely competitive marketplace. Once the marketplace was less competitive the insurers weren't making as much money and raised premiums and "managed" care to the point of mangling it.

We'd all be better off if primary health care coverage came from a single payer plan.

[Sen. Walter Sobchak]

5. This is a huge competitive disadvantage to the United States

I know of two large companies, one Canadian and one Dutch that pulled the plug on US expansion due to healthcare costs just in the last year, the company from Quebec thought it prudent to build a facility to serve the Western US and Canadian provinces because of high shipping costs. They were considering Long Beach and Salt Lake City. The cost of providing benefits equal to those provided in Quebec meant they would be further ahead shipping by Space Shuttle than taking on the cost of the new facility and providing benefits to a US based workforce.

The Dutch firm was doing a great deal of business in the US and planned on opening three US offices so to better serve their US clients - virtually the same story the cost of shifting work from Europe to the US just didn't make sense. Instead of a couple hundred US jobs they have a few tiny offices with some chicks to answer the phones during North American business hours who can demonstrate their gear in english and refer inquiries to the appropriate people in Holland.

The firm I work for operates in Canada - the benefit costs are trivial as we just supplement the provincial plan with dental, vision and drug coverage at a very low cost.

[madrchsod]

7. do`t worry obama`s going to make sure we all can -buy-insurance

of course it`s really hard to buy insurance when there`s not enough money to pay for the utilities,food,and shelter.

to paraphrase mr dylan- that`s alright ma-we`re only bleeding

[snowdays]

20. no juice in a dried up beet my mom always said.

[dflprincess]

34. If he models after Romney Care you won't have a choice

You'll have to buy insurance - food and shelter can come second. As I've said many times this should be known as the "Health Insurance Comapany and Campaign Donation Protection Act", not healthcare reform.

[DollyM]

37. yes, I am kind of disappointed with Obama in that . . .

I think Hillery had the right idea, cover everyone and the disposable income will go up when people don't have to worry about medical bills.

[quidam56]

8. Maybe we should drop the coverage for the congress and senate

we can pay for them to have good coverage, we should have the exact same health coverage as they do. It's a shame what health care has come to in America. http://www.wisecountyissues.com

[ejpoeta]

18. oh, i so agree!! too bad the congress are the ones to vote on that.

never happen. would you vote away a perk you have?

[dipsydoodle]

9. For comparative cost consider the UK's NHS model

to put single payer in context with the alternative cost to empoyers of private healthcare. Employers have to pay 12.8% of gross annual salary above c. $6000 / c. $10000 - no exceptions. It's not even a hidden cost of employing staff - it s a fact of life.

edit to ad - BTW the employees pay 11% on top of the above on the same basis until retirement age.

Notwithstanding the above some employers provide private healthcare on top too.

If you think for one minute that with single payer there will be no private insurance available then dream on. You may also find, eventually , that the local A & E isn't quite as local as it was as may not be your doctor.

[eridani]

10. With single payer, her business would be on the same footing as Microsoft or Boeing n/t

[No Elephants]

12. Single Payer Please, Mr. President. I hope the POTUS watched

Bill Moyers this past weekend. http://www.pbs.org/moyers/journal/05222009/profile.html

What if the POTUS also had to lay a wreath each year at the tomb of the unknowns who died from lack of health care insurance?

[Delphinus]

14. Exactly.

It would be a hell of a lot more than the 22,000 everyone wants to use as a figure.

[snowdays]

21. He has earplugs on when it comes to single payer. He is NOT listening.

[Delphinus]

13. This blows President Obama's

latest assertion, given in New Mexico last week, that we have a history with employers providing insurance coverage. We also have a history with slavery, does that mean we should go back to it? And civil rights abuses - again, go back or perhaps use this economic downturn as a way to move forward, into a new day.

[Vinca]

15. I'm self-employed and know many other self-employed people

and very few of us can afford to buy insurance. It's even too expensive for the young, healthy ones and those of us who are a little older and have had any sort of health issue are not offered insurance at any price. Whenever you complain people tell you to go get a job with benefits. Right. Companies are lining up to hire old people with health issues. This country would be so much better off with single payer.

[TheFarseer]

19. Buying health insurance as a self employed is absolutely brutal

I can't believe what my dad pays. His monthly premium is about 40% of my monthly pay - and I'm not working at McDonalds. Just a few more years til Medicare though.

[Dappleganger]

25. Can you imagine the freedom that small biz owners would have

in this country if they didn't have to worry about providing health insurance for their workers? That would free them up to do so much more!

[GKirk]

28. Do you feel that

the small business owner's expenses will go down as a result of a single payer policy?

[Dappleganger]

29. Absolutely, yes!

It'll let them hire more people because they won't be so worried about who has what illness, how much $$ is it going to cost them if they have down time, etc.

It's MUCH better all-around to have a single-payer source for insurance.

[GKirk]

30. OK,,,but...

I don't provide health insurance for my employees, if I were required to I would be losing money. What is this single payer thing going to do for me?

[Vinca]

32. Keep you and your employees healthy.

A healthy workforce is a more productive workforce.

[riderinthestorm]

38. You'd have to have more than 15 employees. Are you that large?

I'd say if you are, and aren't offering health insurance, I'd be pretty surprised. If you have 14 employees or less, you would not have to mandatorily provide health insurance.

I'm the owner of a small corporate farm with 8 employees and I've always been grateful we could offer it as an option. While I am firmly in the single payer camp, I would definitely save money as a small biz owner under the (entirely speculative and nobody truly knows) proposals being floated.

I'm almost giddy at the potential savings (obviously re-stating that nobody knows what's coming down the pike). I'd definitely use those extra dollars to hire more people.

[ejpoeta]

16. but we already have a system of employer based insurance. why change that now!!

i mean, you have companies moving to canada or other countries because of the insurance issue... well, at least in part... and then there are all those unemployed people that don't have insurance anymore because it is tied to their jobs. the employer based healthcare may have been ok once upon a time when you worked at one job until your retired, but who stays at the same job that long these days. we need a whole new system. why fix what's broken, i guess huh.

[Shagbark Hickory]

23. My dad's small business pays about $600 per employee.

They are afraid to mess with their health benefits because they have a rather small talent pool in their industry and lot of old codgers working there.

They have moved some to HSA's though to reduce costs and yet it's still $600/mo.

That's how our diseasecare system works.

[happyslug]

26. Minimum Wage time 40 hour per week, x 4.1 weeks in a month = $1172.60

Thus your father is paying the equivalent of over 1/2 the minimum wage per employee just for Medical Coverage.

[Abq_Sarah]

40. And that drives down wages

I sat down with my employees this year when I distributed W-2s and opened the books. I showed them what they took home in the form of a payroll check vs what they actually earned when you add in state/federal taxes, FICA (the entire amount) and insurance. They now understand exactly how much they earn vs how much they take home.

[colsohlibgal]

27. Time For Obama To Get Real

Obama is bright, I can't believe he has no idea how inane his talking points about health care have been. He has to understand at some core level the burden our companies have against almost all foreign companies, who do not have to provide health care because the government does that.

Since we already have this awful system in place we can't change it? Please, don't insult us.

There is no reason on earth why a profit making concern should be making decisions about what kind of care we get. You don't need to be a rocket scientist to grasp that. Just as you don't need any special mental capacity to connect the dot, the lobbyists deliver tons of cash to Washington, so Washington won't deep six them.

If we had real reporting going on in MSN how much all these people like Baucus are getting from the insurance and drug companies would be regularly reported while they do stories about this issue. As it is only people like Bill Moyers and occasionally Keith and Rachel do that,

Again, it's going to take monumental civil action to force the Senate and Obama to say no to the cash and do what is obviously right.

[bemildred]

31. Can we say: "For profit health insurance kills jobs!" yet?

Because it does.

[avaistheone1]

39. You can say that again.

Single-payer health insurance would create 2.6 million new jobs.

Obama needs to get on board this.

http://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdf

[Wednesdays]

35. K&R

:kick: