U.S. business, big and small, hurting because of our current health-insurance system
October 12, 2007 by chrisgraham
Column by Sam Rasoul
The practice of work-related health insurance began as a way for employers to get around the wage controls of the Second World War. The idea worked then, providing companies a way to attract the best workers in a time of labor shortage.
Today, though, corporations find providing health insurance for their employees too costly. Since 2000, health-insurance premiums have risen 87 percent. The average employer-based premium for a family is more than $11,000 (more than a minimum-wage worker can earn in a year). Faced with such exorbitant premiums, employers have felt the pressure to switch to plans with high deductibles for their employees or to eliminate health plans entirely. They also have had to cut jobs. Chrysler announced it would close two factories and do away with 13,000 jobs to reduce their health-insurance costs.
Some companies, General Motors, for example, have cut benefits but still find their costs so high they cannot compete in today’s global economy. Their very existence is in danger. Ford Motor Co. carries insurance on 570,000 people, including past employees and current employees and their dependents, spending $3.5 billion last year. Those costs add $1,200 to every vehicle they produce, creating a serious disadvantage in competing with companies in countries with a national health-insurance plan. Beyond any doubt, high insurance costs hurt American industry.
Small businesses that offer their employees health insurance suffer also. Some businesses face 50 percent premium increases yearly. In order to cover exorbitant health-insurance expenditures, they often cut staff in order to keep the business running. Cutting staff, though, means more responsibility and more stress for the remaining workers. Small businesses that do not offer insurance have a profit advantage over those that do, but because of the disadvantages around hiring and retaining reliable, good workers, they too want to fix our broken health-care system.
With both big and small business, the money spent on health insurance is money not spent on growth, innovation, or higher wages.
A single-payer system, such as HR 676, Improved Medicare for All, will benefit business in general. The plan will contain and stabilize costs and eliminate the waste generated by the for-profit system (which I will examine in another article) while providing health care for everyone. Costs for employers would drop dramatically and benefits would improve. Those lower costs would go into profits, profits that could be used for capital improvements or adding more employees or improving salaries. With everyone insured, business could expect healthier employees and higher productivity, less absenteeism, and lower employee turnover. United States business could once again be competitive.
Sam Rasoul is a candidate for the Democratic Party nomination to run for the Sixth Congressional District seat in the United States Congress in 2008.
Mr. Rasoul,
I whole heartedly agree with you. I offer a good policy for my employees with only a $500 deductible then it is 80/20 through Southern Health. To my employees $500 out of pocket plus the 20% deductible would push them over the edge so raising the deductible is not an option for them. They would be better off to let the state help out or just not pay their bills if anything major happens. The health insurance I provide for my employees has gone up on average 15% a year since 9-11. I have a young staff for the most part that are healthy and with very few claims. I spend over $3300 a month for insurance benefits for my employees and it is killing me.
I try to be a responsible employer and to care for my employees but I am being price out of the market by providing insurance for my employees. This year I passed the increase off to my employees for the 1st time since I started coverage in 1999. My coverage for myself is nearly $800 a month; it is like a house payment. How will I ever be able to retire with these ever increasing premiums? I’m only 51 now but was hoping to retire in the next few years but I want be able to afford coverage. In the restaurant business at 51 years of age it is hard to work the 60 hours a week to maintain my business and I cannot afford to hire someone to cut back on my hours.
There are only 2 options in the Valley for health insurance and that is Southern Health and Anthem. I think they fix the rates because there is no competition and they penalize small groups, they act like they don’t even want to insure you. You have to fight with them to get everyday medicines or procedures approved. Hell I’m ready to move to Canada to retire, I’m a small businessman but I wished we had socialized medicine
Thank you,
Terry Holmes
Mill Street Grill
Staunton, Va. 24401
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I agree with Congressional Candidate Sam Rasoul (VA6D) on the Health Insurance issue. HR 676, the “Improved Medicare for All” bill is the correct choice. The present arrangement with private sector profit driven corporate entities as the sole source for medical insurance and drug production services for much of our economy has turned into a corrupt explotative monopoly. Human nature being what it is, where government establishes or allows a monoply, this always happens — as with the trusts of the 19th Century. Then the trusts must then be broken up or “busted” like those of the 19th Century. Until this is done the economy, and population, will suffer great injury. HR 676 will prove an appropriate and timely reform.