President Obama, in his weekly address to the nation, talked about the impact of health insurance reform on businesses. He refers to a new report released by the Council of Economic Advisors.
“I recently heard from a small business owner from New Jersey who wrote that he employs eight people and provides health insurance for all of them. But his policy goes up at least 20 percent each year, and today, it costs almost $1,400 per family per month – his highest business expense besides his employees’ salaries. He’s already had to let two of them go, and he may be forced to eliminate health insurance altogether.
He wrote, simply: “I am not looking for free health care, I would just like to get my premiums reduced enough to be able to afford it.”
Day after day, I hear from people just like him. Workers worried they may lose their coverage if they become too sick, or lose their job, or change jobs. Families who fear they may not be able to get insurance, or change insurance, if someone in their family has a pre-existing condition. And small business owners trying to make a living and do right by the people they employ.
These are the mom and pop stores and restaurants, beauty shops and construction companies that support families and sustain communities. They’re the tiny startups with big ideas, hoping to become the next Google or Apple or HP. And, as shown in a new report released today by the White House Council of Economic Advisers, right now they are getting crushed by skyrocketing health care costs.
Because they lack the bargaining power that large businesses have and face higher administrative costs per person, small businesses pay up to 18 percent more for the very same health insurance plans – costs that eat into their profits and get passed on to their employees.
As a result, small businesses are much less likely to offer health insurance. Those that do tend to have less generous plans. In a recent survey, one third of small businesses reported cutting benefits. Many have dropped coverage altogether. And many have shed jobs, or shut their doors entirely.
This is unsustainable, it’s unacceptable, and it’s going to change when I sign health insurance reform into law. (more…)