|

Health-care costs pinch businesses

BY JENNIFER DELGADO | MARCH 6, 2009 7:22 AM

When its health-care costs skyrocketed by 90 percent three years ago, the New Pioneer Co-op switched insurance companies.

Although the company — which provides health-care benefits for roughly 144 employees — changed its insurance plan, the staff now pay 5 percent more for their health-care packages. Still, Co-op officials said they are fortunate.

“We are one of the lucky ones,” said marketing manager Jennifer Angerer.

Small businesses in Iowa are reporting they can’t afford health care for their employees because of decreasing revenue and increasing insurance costs. This means some companies face a difficult decision if they want to continue to compete: Drop health care, or ask employees to pay more for their insurance premiums.

“Health care continually floats to the top of a list of concerns,” said Joe Folsom, the Des Moines director for the Iowa Small Business Administration. “Businesses will forgo it if it means staying alive.”

Mike Ralston, the president of the Iowa Association of Business and Industry, said he was unaware of any government entities for small businesses to turn to for assistance.

He has seen an increase in the number of business owners associated with his organization canceling health-care programs, raising copayment prices, and requiring more up-front payments from employees.

The majority of U.S. companies are small businesses, officials said. A 2006 study by the Agency for Health-Care Research and Quality showed 55.8 percent of small businesses provided health care.
Officials at the National Federation of Independent Business, another small-business group, said they are seeing some small companies eliminating health insurance. But some Iowa owners are looking for other cost-saving methods before dropping health-care plans.

“Members have taken the attitude to cut and trim as much as they can,” said Andy Warren, the state director for the National Federation of Independent Business. “Laying off is the last option.”

At the Co-op, officials said the economy makes it difficult to keep employees working full-time.

“Our business has slowed down just like everyone else’s,” Angerer said. “Some people are working outside their department, but so far, so good.”

There are a few bills proposed in the state Legislature to help lower health-care costs, but some officials remain unpersuaded they will work. These bills would increase mandates for insurance companies, meaning health-care programs must increase the number of illnesses they cover. But business owners would have to pay more for this increased coverage.

“The bills would add to the cost of health care,” Ralston said. “[The bills] would increase costs, without necessarily improving care.”

The only way to lower costs for small businesses is to apply pressure to the lawmakers, officials said.

“Once you do temporary measures to keep offering health insurance, you get to the point where there’s nothing more you can do,” Warren said.


Daily Iowan Advertising
Today's Display Ads | Today's Classifieds | Advertising Info




Sponsored Links  
   
T-Shirt Design  
Insurance Leads Charlotte Web Design
Health Insurance Leads Home Equity Loans
Home Service Guides  
Life Insurance DMI Furniture
Custom Magnets Buy a text ad




 
Privacy Policy (8/15/07) | Terms of Use (4/28/08) | Content Submission Agreement (8/23/07) | Copyright Compliance Policy (8/25/07) | RSS Terms of Use

Copyright © The Daily Iowan, All Rights Reserved.