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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Friedman Realtor’s Group | St. Louis, Missouri
Health Insurance Exchanges Will Help Missouri Realtor ‘Rebuild St. Louis’
Eric Friedman
Friedman Realtor’s Group
St. Louis, Missouri
Founded in 1995
Full-time employees: 4
Eric Friedman, whose business was named one of St. Louis’s top 20 firms with fewer than 20 employees in 2011, has high hopes for the future of his beloved city.
With 40 successful years in real estate under his belt, the Friedman Group owner understands how crucial it is to stimulate the local economy. Aside from his work in numerous organizations aiming to “rebuild St. Louis,” he also wants to boost his city’s economy by using money saved on healthcare costs to invest in his business. Eric hopes the new health insurance exchanges, available in all states in 2014, will provide the extra funds necessary for growing his business and the economy.
“I plan to invest the saved money in our business in one way or another.”
Since the 4-person Friedman Group opened in 1995, Eric has provided health coverage for his employees. He currently pays PPO premium costs for himself and one other employee. However, he and the employee are not covered under a group plan. While his premium costs increase about 20% each year in the individual market, he continues to pay for that coverage because he believes it offers him more security than a group plan. If he switched to group coverage and lost his one employee he could be left in an untenable situation financially. Insurers often charge exorbitant group rates if an individual has a preexisting condition. If his covered employee quit, Eric would be left group-less, with the choice to either find an individual plan or face a gap in coverage followed by an astronomical rate increase if his next employee had a poor health history or if he became sick himself. He could even be denied coverage altogether.
“If we had a group and one person left, we’d no longer be a group, which would be very problematic if anyone got sick in that interim.”
The forthcoming insurance exchanges should help Eric avoid this potential debacle. He will be able to take advantage of the exchange in either of two ways: he can choose to purchase health insurance through an individual exchange or through the small group, or SHOP (Small Business Health Options Program) exchange.
In either case, Eric will have greater buying power than he does now and should no longer face the risk of losing affordable coverage. The exchange eliminates these concerns by first providing an online marketplace for individuals and small groups to pool their buying power and drive down coverage costs, and next by operating in accordance with the Affordable Care Act’s 2014 rescindment of an insurer’s right to deny coverage or charge higher rates based on preexisting conditions.
With the money he’ll save by entering the exchange, this small business owner will be able to invest capital in his business and the local economy, trekking onward in his quest to “rebuild the city of St. Louis.” It’s no surprise he’s in the top 20.
