With Congress only weeks away from votes on health care reform, small businesses are learning that their health care insurance costs for 2010 will be sharply higher. "
Many small businesses say they are facing the steepest rise in insurance premiums they have seen in recent years,"
The New York Times said:
"Insurance brokers and benefits consultants say their small business clients are seeing premiums go up an average of about 15 percent for the coming year -- double the rate of last year's increases. That would mean an annual premium that was $4,500 per employee in 2008 and $4,800 this year would rise to $5,500 in 2010.
"The higher premiums at least partly reflect the inexorable rise of medical costs, which is forcing Medicare to raise premiums, too. Health insurance bills are also rising for big employers, but because they have more negotiating clout, their increases are generally not as steep.
"Higher medical costs aside, some experts say they think the insurance industry, under pressure from Wall Street, is raising premiums to get ahead of any legislative changes that might reduce their profits."
A report on Recovery.gov, a site that's managed by the Department of Health and Human Services, recently published a report about
small business employees who are at risk of losing coverage. The report claims:
"If trends continue, health care costs for large firms will increase 166 percent by 2019, resulting in a cost burden of $28,530 per employee. And by 2025, one in every four dollars in our nation's economy will be spent on health care -- money that could have been invested in our nation's businesses. Rising health care costs cut into employee wages and impede hiring and business growth.
"As a result of high health care costs, the percentage of firms offering health insurance coverage has declined. Between 2000 and 2009, the percentage of firms offering coverage fell from 69 to 60. Much of that drop occurred in the past year alone, from 63 to 60 percent. Small businesses in particular struggle under the current health care system. For firms employing less than 10 workers, the erosion in coverage is striking -– from 57 percent offering coverage in 2000 to 46 percent offering coverage in 2009."
