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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Pacific Cookie Company | Santa Cruz, CA
California independent bookstore:
Rising health costs threaten coverage
Larry and Shelly Pearson
Pacific Cookie Company
Santa Cruz, California
Founded: 1980
Employees: 35
Health coverage: PPO for 20 full-time employees
Earthquake can't shake their commitment to workers
Larry and Shelly Pearson started baking cookies in 1980 from a small storefront in Santa Cruz. Retailers around the San Francisco Bay Area sought out the popular treats until the 1989 Loma Prieta earthquake, which destroyed the company's headquarters and distribution facility. But Pacific Cookie Company came back bigger than ever, expanding into commercial distribution of frozen cookie dough and Internet-based gift sales.
Throughout all its travails, Pacific Cookie Company has remained committed to the health and well-being of its employees. That includes providing health insurance coverage. "It's just a conviction of ours," says Larry Pearson. "The tremendous downside to being uninsured can be instant poverty and bankruptcy, and that's not something people deserve."
The business was able to keep up with increasing healthcare premiums over the years as sales grew too. "But in the last decade we've found ourselves paying more and having our employees pay more for declining coverage," Pearson explains.
Premiums have been going up by double digits each year, prompting the company to scour the landscape for new options. "We end up cutting and snipping away bits of coverage to keep medical coverage affordable for us," Pearson says. "We're not a large company, so these decisions are very difficult for us."
"Our premiums have gone up in double digits every year. We end up cutting and snipping away bits of coverage to keep it affordable for us."
Deductibles take a toll on workers' take-home pay
The Pearsons have tried hard to maintain a low cost barrier to seeing the doctor. "We have people living very modestly. If somebody is making $10 an hour working on our production floor, for them to go to the doctor and get some tests and some medicine is a very expensive thing," Pearson says. He is distressed that despite their best efforts, the drug deductible has gone up to $250, raising the possibility that workers won't buy medications they need. "That's the best we could do."
The owners often find themselves stepping in to help their non-English speaking employees navigate the health system and get fair treatment.
"We have very long-time employees and one important factor in that is the fact that they get health coverage," he says. "We're convinced that it works for us in that very selfish way. It gets good people to stay with us."
"Can you imagine a society where if you have something wrong with you it's never an issue of payment?"
Sharing the responsibility and the benefits
Pearson would like to see everyone in the Unites States get health coverage. That probably means everyone paying their fair share into the system as well, with help for those who truly can't afford it.
Since his company is already spending $40,000 each year to provide insurance coverage for its workers, Pearson would be open to a system that employers contribute to in order to insure every individual. "I would not like to see my particular situation get worse, but I already pay a pretty substantial amount of money for health coverage," he says.
"Can you imagine a society where if you have something wrong with you it's never an issue of payment?" he asks. "There are a lot of societies like that in the world and I would like for us to be one of those. I would be willing to pay into that system."
