Cost to insure raises concern

Employers struggle with high premiums

Bill could help small businesses

Associations could offer coverage under proposal

October 27, 2003|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Rick Silber has seen his health insurance costs rise by nearly 30 percent in one year.

The owner of the City Group, a Jessup-based janitorial supply company, pays 90 percent of health insurance costs for his employees. But as his health insurance rates have jumped year by year, Silber said he's had to think long and hard about what he can continue to provide for his employees.

"I said pretty soon it's going to be way out of hand," he said.

Silber is not alone. As the health benefits open enrollment season approaches, employers in Howard County and throughout the region are considering what they can afford to provide employees in light of the climbing costs of health insurance.

Small businesses are especially concerned.

But there soon may be some new tools to help businesses handle the mounting costs of health insurance.

The U.S. Chamber of Commerce is supporting legislation in Congress that would allow small group associations, such as chambers of commerce, to provide insurance to members' employees - a move that is expected to lower premiums for small companies, according to Kate Sullivan, director of health care policy at the national organization.

In the meantime, H. Walter Townshend III, president and chief executive officer of the Baltimore-Washington Corridor Chamber of Commerce, urged members and small-business owners to petition their elected officials to make sure they know how much the prices are rising and how the increased costs are affecting their business.

"There's a lot of education that needs to be done, and there needs to be more grass-roots involvement letting the elected officials know the costs are rising and they're having an impact," he said. "They have to know [employers will] have to shift more costs to the employee or not have health insurance anymore. That's a difficult one because health insurance coverage is a competitive factor."

Nationally, more and more people go without health insurance. From 2000 to 2002, the number of uninsured rose by 10 percent to nearly 44 million people, according to the U.S. Census Bureau.

Uninsured workers also are growing more common. According to a study by Commonwealth Fund, a private foundation supporting independent research on health and social issues, the number of uninsured workers at large companies - traditionally the backbone of the private insurance industry - is growing.

In 1987, employees of large companies made up a quarter of the uninsured work force, but the latest statistics show they now account for a third.

For small businesses, the issues are even more troublesome, because the options that are available to companies that employ hundreds simply are not there for companies with 10 employees.

"There's not a lot of options for small businesses, you just start cutting benefits, make employees pay more or get rid of it, and I see all those things," said Eileen Levitt, whose Columbia-based human resources services company helps employers choose coverage from a bevy of insurance providers. "The options that are available today to me just don't solve any of the problems, which is that the price is getting out of range of what [small-business owners] can afford."

At a health care seminar sponsored by the corridor chamber this month, Sullivan, the U.S. Chamber health care policy director, said her organization supports the Small Business Health Fairness Act, or association health plans that would allow associations to act as unions or large employers, offering health benefits unfettered by state mandates to small businesses.

The move would give small employers greater bargaining power, economies of scale and increased administrative efficiency.

According to estimates from the Congressional Budget Office, small businesses could see a 13 percent reduction in premiums on average, and in some cases up to 25 percent.

Similar bills have passed the House of Representatives six times, she said, and the current bill is finally in the Senate, but the effort needs more support from business owners, she said.

"We're launching a big grass-roots effort on this," she said. "The most effective thing is to take your next increase and fax it to [Maryland congressmen]."

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