Health plan draws fevered criticism

August 12, 1994|By Patricia Meisol | Patricia Meisol,Sun Staff Writer

With Congress in the midst of debate on a national health care reform bill, small-business owners gathered in East

Baltimore yesterday to warn that the ranks of the unemployed -- and the uninsured -- will grow if they are forced to pay for workers' health insurance.

A dozen business owners representing the retail, restaurant, hotel, and trucking trades, as well as food dealers, printers and contractors, vented their frustrations at Haussner's Restaurant over being painted as selfish and greedy in the debate over employer mandates.

Their message: The government should work to clean up inefficiencies in the health care system and reduce its cost before talking about employer mandates.

"The reason you have a health care crisis in America is because of the cost," said Tom Saquella, president of the Maryland Retail Merchants Association.

Yesterday's news conference came three days after some of Maryland's largest employers, joined by organized labor groups and Rep. Benjamin L. Cardin, a 3rd District Democrat, voiced support for a health reform that requires employers to buy insurance for their workers. That coalition labeled business owners that are against such mandates misinformed or selfish.

The big companies, which include Westinghouse Electric Corp., Safeway Inc., Giant Food Inc., General Motors Corp., Bethlehem Steel Corp., Ceridian Corp. and academic health care providers such as the Johns Hopkins Health System, argue that universal coverage paid for by employers is the only way to bring down costs.

But the small business groups, supported by the U.S. Chamber of Commerce, say the big guys don't get it. Rather than being selfish, small-business owners said yesterday, they are already taxed to the limit.

Harlow Fullwood Jr., president of Fullwood Foods, franchise operator of four Kentucky Fried Chicken stores in Baltimore, pays 85 percent of health care costs for full-time workers and said he isn't prepared to withstand "a hit" from mandated health insurance.

"I didn't have a background in business, but I've worked hard, and all of a sudden, persons who've never run a business are saying I can keep it going," said Mr. Fullwood, a former police officer who said he worked for a year without pay or vacation to keep his business going.

As an inner-city business owner, he said, "My biggest problem is not holdups. It is not drugs. My biggest problem is the federal government."

An estimated 600,000 people are employed by Maryland small businesses -- defined as companies with fewer than 100 employees. Businesses with fewer than 500 employees represent 91.9 percent of all Maryland businesses and employ 1.1 million people, state data show.

While they say they support access to health care, the small business owners say mandates will result in runaway inflation.

Small price increases won't pay for the mandates, they say, because suppliers with the same mandate will raise their prices as well, sending costs spiraling ever higher. "Who is going to want to pay 16 percent more to eat at Marie's?" said Frank Kosmakos, owner of a Westminster restaurant by that name. "We've tried to start a dialogue with Mr. Cardin, only to be called 'screamers' and 'misinformed.' "

At Haussner's, whose waiters put in 30 years and more, the bill to insure everybody would be at least $147,000 a year, or more than the restaurant's net income, said owner Francie George. The restaurant reduced its 100 percent contribution for employees' health care in 1985, when insurance companies began to "cherry pick" and Haussner's premiums rose disproportionately because of its older work force, she said.

Among the sentiments evident yesterday was anger that big businesses made commitments that they now want others to assume. "Why should I, as a retail merchant, pay for early retirees of GM and Beth Steel?" asked Gerald Jeffein, owner of Kaufman's retail store.

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