CalPIRG says small business left in the cold on healthcare reforms

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If small businesses were run like the healthcare industry, they’d lose all their customers, the California Public Interest Research Group said today.

As it is, staggering healthcare costs pushed in part by a system rife with unaffordable policies and insurer abuses are already are leaving small businesses in a rut, according to the consumer advocacy group, which advocates a public health insurance option to compete with high premiums from private companies.

‘Small businesses are being driven out of businesses because they’re unable to provide healthcare for their employees,’ said Emily Rich, the state group’s healthcare advocate. ‘The inefficiencies and wastes in healthcare are driving up the costs for small businesses throughout the state.’

A July report from U.S. PIRG, the federation of state PIRGS, surveyed 343 small-business owners and managers around the country. Just 29% of small businesses surveyed extended coverage to their workers, with the likelihood of employees getting covered shrinking with the size of the company.

Of those offering coverage, 55% do so to attract and retain good employees, and 27% do it to increase worker productivity. Of those small businesses that don’t offer healthcare coverage, 78% said they would if they could. But most were stymied by the high cost and the rest complained that healthcare policies were too complicated.

Worse, most small business owners don’t feel as if anyone in Washington cares much about them. Only 24% said they felt their interests were represented in the current health reform debate.

Owners also complained about other concerns about insurers, some of whom deny coverage to those with preexisting conditions. Also, small companies pay 18% more for insurance than large firms do for the same policy, and also must deal with complicated application forms and annual or lifetime caps on payment for care, Rich said.

Since 1999, health insurance premiums have jumped 113% for small companies, according to the report. Together, the companies will pay nearly $2.4 trillion over the next 10 years to provide medical insurance for their workers, according to a recent report from Small Business Majority.

-- Tiffany Hsu