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View Full Version : Big health savings for small businesses


Steve
09-20-2006, 07:35 PM
If you get a chance, review this article. It discusses ways medical insurance could be lowered to help small businesses.

What are the average medical insurance rates in your area?

Big health savings for small businesses (http://money.cnn.com/magazines/fsb/fsb_archive/2006/10/01/8387289/index.htm?postversion=2006092006) - Marilyn Landis was not sick. The owner of Basic Business Concepts, a financial outsourcing company in Pittsburgh, says that last year neither she nor the worker covered by her business's health insurance plan suffer any of the preexisting conditions so feared by insurers. Yet, Landis says, her premiums shot to $1,700 from $900 a month. The problem? Landis had turned 53, an age that apparently worried her insurers. "Nothing changed in my health," Landis says. "I couldn't believe it." (In most states it is not illegal for insurers to charge different rates based on age.)

It's a familiar problem for small businesses: If insurers sense the smallest risk that even one employee might run up health-care charges, premiums skyrocket.

A 2003 report issued by the Healthcare Leadership Council quoted an insurer who said that premiums for an eight-person business would increase by 37.5 percent if just one worker developed diabetes. And small companies are disproportionately affected. Some 26 percent of workers employed by businesses with fewer than 200 employees saw their premiums go up by more than 15 percent last year, compared with 17 percent of all covered workers, according to a study by the Kaiser Family Fund and the Health Research and Education Trust.

Policymakers have begun examining a new tactic for coping with that instability. Known as "reinsurance," it provides a safety net for insurers, calling for the federal or state governments to bear the brunt of the most expensive health-care costs. Senators Dick Durbin (D-Illinois) and Blanche Lincoln (D-Arkansas) have proposed a reinsurance provision as part of legislation to help small businesses obtain health care.