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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Media Mechanic | Tualatin, OR
Oregon website designer:
Cost of health benefits discourages hiring
Paul Ward
Media Mechanic
Tualatin, Oregon
Founded: 2005
Employees: Self and three contractors
Health coverage: On wife's employer's policy
Premiums thwart expansion plans of a successful business
Paul Ward's web design business is booming. He has so much work he needs help from other designers and programmers, and keeps a couple of them on contract. But it would make better economic sense to hire them as employees.
There's one reason why he doesn't: the prohibitive cost of healthcare benefits. "Even though my shop is doing very well and sales are up 75 percent over last quarter, it still gives me pause to go ahead and bring in full-time people because my single biggest expense is healthcare," says Ward. "It's a massive expense for my shop."
Ward's story is particularly worrisome as the country struggles to pull itself out of recession, and is leaning heavily on small businesses to create new jobs. But the difficulty of finding affordable health insurance for workers is holding small business people back from providing those positions.
"This is the first time I've taken the contractor route," says Ward. "I don't like to. Having employees breeds loyalty and is better for the books because you're not paying huge per-hour wages."
"To see healthcare double and then get less coverage is outrageous."
Some states have rules that allow easier access to coverage
Ward has also struggled to maintain health insurance for his own family-himself, his wife and his young daughter. They moved from Michigan to Oregon in 2008, drawn by a better local economy. And while they love their new Portland-area home, there was one drawback: Oregon does not allow sole practitioners to buy into group insurance for employers, while Michigan does. "It doesn't matter all that much if my shop is in Grand Rapids or Portland because my clients are all over the country," he explains. "But to see healthcare double and then get less coverage is outrageous."
The Wards were thrown into the individual insurance market, where it was nearly impossible to get coverage because of preexisting conditions for both his wife and daughter-illnesses that had been treated and no longer pose a threat, but that left insurers unwilling to offer a plan.
The family paid high rates to belong to Oregon's high-risk pool and to purchase Cobra coverage until Ward's wife got a job that includes health insurance. But they still pay a high premium ($1600 a month) for family coverage.
"Why can't we do healthcare for the rest of us?"
Expanding coverage would help family and business
After his experience having to navigate different rules in different states, and paying extremely high rates for the Oregon high-risk pool, Ward wants to see a system that is fairer and simpler for average people to manage. "Why can't we do healthcare for the rest of us?"
Ward would like to see reform that provides access to affordable healthcare for everyone, and is open to options that involve contributions from all parties, including employers. "Whatever's practical to get the cost down is fine," Ward says. "Whatever the compromise needs to be. As a small business person I'm practical, so whatever helps the small business community get this weight off their shoulders."
