Health Care, Small Business and Jobs
One of the biggest costs to a small business is health care coverage and therefore it is a significant source of anxiety. Larger groups can self-fund and even when they insure, their size often allows for lower premiums and more consistency in costs from year-to-year. Small groups are generally experience-rated, have higher administrative expense embedded in their premiums and frequently see very large rate moves from year-to-year, often in excess of 25%.
Because of the cost, small groups have increasingly stopped providing health care coverage or substantially increased the share that employees pay of those costs. The Wall Street Journal has described how those costs are now also leading some companies to reduce expansion plans. (WSJ Article) Many small business owners are torn between wanting to provide health insurance to employees and fearing that the costs could sink their companies. Competition for employees may also require them to provide good health coverage. Since small businesses account for much of the job growth in the United States, anything that inhibits their expansion is not good for our economy, especially as we attempt to climb out of our deep recession. While some reform bills attempt to explicitly address small business concerns, what would help them most is measures that limit overall health spending growth.