Small business owners and entrepreneurs throughout the US are facing impossible choices because of the skyrocketing costs of health insurance premiums, and, in many cases, the lack of access to coverage. Here are some of their stories.
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Fence Emporium | Palmer, AK
Alaska fence products maker:
Working harder when hiring is too expensive
Health insurance premiums make new help costly
When Debby and Keenan Retherford gave up their jobs to run their own business in 2000, they looked forward to all the challenges and satisfactions of being entrepreneurs. But the cost of health insurance is making that choice harder to live with. When their shop gets busy in the summer, Keenan works long hours every day because they can't afford to hire any more help.
That's because the cost of their health plan has gone up 40% in just one year. The firm, which sells fencing materials and makes gates and other products, has seen rates go up every year. The Retherfords have dealt with the expense by cutting back on the benefit. "It started out as pretty nice coverage, with a $500 deductible with vision and dental," explains Debby. "But we dropped vision and dental, and then after another year upped the deductible to $1,000, then to $1,500 and this last time to $2,500."
The small firm has just three employees, so the group's rates go up drastically whenever a major claim comes in and as the employees age. Everyone on the plan is around age 50, and one employee has been treated for breast cancer.
"We have a tiny company and we are like family."
Offering coverage is important to business owners
Without the option of hiring more help, busy times can become overwhelming. "My husband just runs himself ragged, he puts in long days, seven days a week," says Debby. "He's real hesitant to add the expense [of hiring additional people] because it's so much more than just the wages."
When the Retherfords bought the fence business in 2000, Debby didn't quit her banking job right away so she could hold onto the health insurance for a while longer. But they offered health coverage to their employees because they thought it was important. "It's not even for recruitment, but just because we have a tiny company and we are like family," Debby explains. "We just couldn't bear it if something did happen to one of our employees and they were uninsured, and had to go through personal bankruptcy. We've seen it happen to other people we know."
"The smaller states are trapped...we need a true national exchange...to spread the risk and increase competition."
Bigger pool is needed in small states
Debby is anxious for healthcare reform at the federal level to make insurance more affordable for small firms like hers. She's particularly concerned about small states such as Alaska, where the small population can make it difficult to spread insurance risk enough to reduce premiums. "I feel like the smaller states are trapped," she says. "We need a true national exchange or a public plan so we'll be in one huge pool to spread the risk and increase competition."
She also feels trapped by an expensive small group health plan that is, nevertheless, a lifeline for her employees. "I can't morally drop it; I just don't feel like there's anyplace else for employees to turn," says Debby. "Even if I went back to full-time work and got coverage for our family, I still wouldn't be comfortable dropping the group insurance knowing I wasn't leaving any options for our employees."