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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TVGrams Digital Media | Tiburon, CA
California media entrepreneur:
Coverage denied despite good health
Tom Grams
TVGrams Digital Media
Tiburon, California
Founded: 2003
Employees: Self-employed
Health coverage: HMO without prescription drug coverage
Runner, mountain biker turned down for health coverage
Tom Grams is a healthy guy. In his early 50s, he runs every day and enjoys mountain biking in the rolling green hills near his home across the Golden Gate Bridge from San Francisco.
But when the successful independent consultant needed to buy health insurance, he was turned down more than once. He can only guess why: "I think it was my age, and that I take prescription cholesterol medication as a preventative," Grams speculates. He's trying to avoid developing the high cholesterol problems his father suffered from.
After 20 years in the cable television industry helping launching the Discovery Channel and The Learning Channel, among other well known enterprises, Grams saw an opportunity to help traditional media companies get established online, and went into business for himself in 2003.
He didn't think much about health insurance at the time because his wife got family coverage at her job. But a few years later she decided to stay home with their two children, and the family ended up opting for COBRA coverage-allowing them to continue receiving their previous health coverage, but at a much higher cost without the employer contributions to the premium.
Soon the COBRA plan got even costlier-the premium doubled in two years, so Grams started looking for other coverage. He was shocked when two different insurers rejected his application. "Our insurance broker was just as amazed as we were that we were turned down," Grams recalls.
Eventually they were able to get a high-deductible plan for Grams' wife and children, and a separate HMO plan for him. But it doesn't cover prescription drugs, so he has to pay out of pocket each month for his cholesterol medication.
"Health care is a huge hurdle for people who might want to start a business, and it's getting worse."
Insurance barriers stifle new businesses
When he was struggling to find insurance in 2008, Grams considered giving up his very successful consulting business. "I began to think, 'This is terrible, I've got to go back into a job.'" But he realized that he'd just face the same problem getting coverage when he left an employer in the future. "You want to keep your coverage wherever you go, so you don't have to go through this again," Grams says.
He believes the restrictive nature of the individual insurance market stifles innovation and keeps entrepreneurs from striking out on their own. "It's a huge hurdle for people who might want to start a business, and it's just getting worse," he says. "I do think it stifles people from going out on their own who otherwise would."
"There has to be available health insurance for everyone, that is absolute."
Healthcare coverage should be accessible to everyone
Grams knows he's not the only one who's been unable to get coverage on the individual market, and he'd like to see the rules changed so everyone can get insurance. "I like the idea of insurance companies not being able to turn people away because of their age or health condition," he says. "There has to be available health insurance for everyone, that is absolute."
