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Rules of Thumb: The unhealthy
state of health insurance
Bankrate.com
HMOs were touted
as a way that small-business owners could afford to provide health
care to their employees. It's not quite working out that way, a
recent study shows.
Health Maintenance Organizations hold down costs
by imposing cost controls on doctors and fees on the covered workers,
but still, the number of small businesses offering health care has
actually declined in recent years, the study finds.
The study, "Small
Business and Access to Health Insurers, Particularly HMOs,"
was conducted for the Small Business Administration's Office of
Advocacy by Consult Inc.
Companies that have less than 25 workers and
a disproportionate share of low-income employees are finding it
more and more difficult to find affordable insurance, the study
found. Low-wage employees are less likely to be eligible for health
benefits or take them when they're offered. When they do take them,
they often have to pay a larger share of the premium and have to
share more expenses in the form of higher deductibles and co-payments,
and restricted benefits.
Thirty-seven percent of working Americans are
employed by small businesses with 99 or fewer workers, the study
found; 51 percent of Americans without health insurance work for
small businesses employing 99 or fewer workers; and 12 percent of
workers in firms offering coverage are not eligible for it. Of those
who are eligible, 16 percent refuse coverage.
In the time span 1988-1995, 12 million new jobs
were created, of which 8 million to 9 million were in firms employing
499 or fewer workers, the study found. At the same time, the proportion
of workers in firms offering health insurance fell from 76.2 percent
to 73.2 percent.
States and the federal government have passed
laws to make coverage more affordable for businesses and workers,
but with mixed success, the study notes. Reform efforts center around
issues of cost control and access. But individual states have different
economic situations; most, but not all, are in an economic boom
and qualified workers are hard to find, making employers more likely
to provide benefits. The health care market varies a great deal
and operates in a variety of social and political environments,
the study found.
The four main reasons companies offer health
insurance, the study found when questioning HMOs, are:
- To attract and retain employees.
- To respond to employee demands for coverage.
- A tight labor market.
- To get coverage only for the owner and family.
The first item was the most important, the study
found.
Most of the study's respondents named cost as
the main reason employers do not offer coverage.
What types of insurance -- if any -- do you
offer your workers?
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