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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Susquehanna Glass Co. | Columbia, PA
Pennsylvania decorative glass factory:
Fast-growing insurance bill worries owners
Keeping current insurance not an option with 160% price hike
For nearly 100 years, Susquehanna Glass has been a family-run business that etches designs on glass. Its work can be seen in winery tasting rooms, in restaurants and at home dinner parties where monogrammed stemware graces the table.
And for that near-century, the firm has ridden financial highs and lows, surviving the most recent economic downturn by expanding the types of work it does and making its factory more efficient.
But Susquehanna CEO Walt Rowen, grandson of the founder, wonders how the venerable firm will manage in the face of outrageously high quotes for health insurance next year. The price to keep the company's current plan came in at an astonishing 160% above last year's bill. "That one's off the table," Rowen says. "It's just crazy." Nevertheless, other health plans aren't going to be much better, with the final tab potentially 30% to 80% higher than the current cost.
As a result, the 24 full-time employees who use the company's insurance will end up paying more out of pocket. Susquehanna offers a PPO plan with a $1,500 deductible and, until now, has paid whatever portion of the deductible was used. It's unlikely the company can continue to afford to pay that full amount, which will have to be taken on by the employees.
Employees are already paying more than they used to. "Each year it gets a little bit worse," says Rowen. "We used to cover maybe 75 to 80% of the premium, and now we're covering about 50% of it."
"Each year it gets a little bit worse."
Insurance costs impact business decisions
Susquehanna has always offered health insurance and it's important to Rowen and business partner Chad Yaw to maintain the benefit. "Our average employee has worked for us 15 to 20 years, they're part of our family," says Rowen. "If we just suddenly dropped health insurance for them they'd never be able to get it on the open market on their own."
Health coverage has become an enormous cost of doing business for Susquehanna Glass in recent years. "Health insurance is a huge component of wages where it wasn't before," he says. "We have to keep raising prices" to accommodate the shift.
"The health insurance system is absolutely and totally broken. It's going to self-destruct."
Medical costs need to be shared by healthy and sick
Rowen believes the health insurance system can't go on this way. "It's absolutely and totally broken," he says. "It's going to self-destruct." Healthcare reform needs to happen soon to bring some certainty to the insurance marketplace. Rowen worries that the giant premium increases his firm is being offered are the result of insurers' uncertainty about what kind of reform might be approved by Congress in the next year.
What makes the most sense, Rowen argues, is establishing a large, robust insurance exchange that requires young, healthy people to buy in. Their typically low medical costs would balance out those of older, sicker people. "Maybe you would have some kind of regular coverage that doesn't cost everybody a lot but would have catastrophic coverage if something huge happens to you," he suggests. "But so far, reasonable, sensible people haven't sat down and set aside their entrenched positions and found the best way to do this."
But Rowen is still optimistic that Congress can find a common sense solution. "Obama is the first guy to come along and really step up and force the issue," he says.