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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Little Dolphin School | Westbrook, ME
Shrinking benefits make hiring difficult
Double-digit premium increases each year pressure the budget
Little Dolphin School started out in New York City as the dream of Steven Brier's mother Sheila, a teacher who was thrilled to be able to open her own preschool in 1977. Steven, a chiropractor, opened a second branch of the successful school in Westbrook, Maine, in 1999.
Under the watchful eye of the Briers, the schools have maintained high standards for a warm and enriching environment for young children of all social and economic backgrounds. To meet their expectations, they rely on a high-quality teaching staff.
But recruiting and keeping top-notch educators is a challenge when providing them with benefits is getting so expensive. In the ten years he's been running the Maine location, Steven Brier has seen healthcare premiums go up between 8 and 30 percent nearly every year. "We can't compete with the tax-based school system when it comes to salaries, so we've always offered a rich benefit package," Brier explains. "But it's now costing us between 6 and 10 percent of our gross receipts. It's getting to be oppressive."
The benefits package has always included dental and vision, along with a generous health plan. But as premiums have risen each year, Brier has had to economize on the health plans and offer less expensive options. Employees now have the choice of an HMO, a PPO or a health savings account. They pay more for the better plans.
"We've had quite a number of people move off the HMO to save a little money, and I've done it myself," says Brier, the father of three young girls. This year, for the first time, the school has dropped its contribution toward insurance and established it as a fixed amount, rather than a percentage.
"It's hard to attract the best and brightest teachers without good benefits."
Hoping to maintain merit pay raises, avoid layoffs
Brier says he's proud of the fact that the school has avoided laying off any staff despite the increasing pressure of health premiums on the budget. The school has also managed to maintain 3 percent merit raises to deserving staff members. But the possibility of extending insurance benefits to spouses or families is unlikely, given the cost. "I can't see that in our future," he says.
"The insurance market needs to be opened up to more competition."
Insurance market needs more competition to drive down rates
Brier is a strong advocate for healthcare reform, arguing that in small states such as Maine there's too little insurance company competition to rein in skyrocketing rates. "You need to remove the interstate barriers so more carriers would be in more markets," he argues. "Then at least you expand the pool of people and get a more level playing field."
He'd also like to see a low-cost, trimmed-down option backed by the government that would be available to anyone. And small businesses that provide health insurance to their workers should get financial support in a reformed system, Brier argues. "There should be some kind of fiscal reward for businesses," he says.
Ultimately, successful healthcare reform will require some sacrifice from everyone, from individuals who would be required to obtain coverage, to insurance company CEOs who might get smaller bonuses. "There are going to be painful concessions," he predicts. "I don't think anyone should expect something for nothing."