by Kimberly James
As the cost for health benefits rises in Connecticut, businesses and nonprofits are evaluating budgets to determine how much they can contribute to benefits for employees.
“Consider how much the cost of health care in America degrades our competitive position – businesses and taxpayers in no other country must bear this huge cost; it puts America at a 7-10% cost disadvantage relative to other countries,” Fred Carstensen, director of Connecticut Center for Economic Analysis at the University of Connecticut, told The Center Square. “And at the same time, the average health of Americans (and life expectancy) is poorer than in most other developed countries – making us less productive. The costs we impose on ourselves with this health care system are seemingly endless.”
Andrew Markowski, Connecticut state director of the National Federation of Independent Business, said this is the worst time to add another burden to the backs of small business owners.
“NFIB’s latest survey shows that small business owners who expect better business conditions over the next six months decrease by one point to the lowest level recorded in its 49-year-old survey,” Markowski told The Center Square. “On top of that, small business owners are struggling with inflation, problems hiring workers and supply chain issues. You’ve probably noticed mom-and-pop shops in your neighborhood that have already closed their doors. The last thing they need right now is another increase to their bottom line.”
Medical care costs have risen faster than the rate of inflation for decades. Carstensen said it is clear that many smaller businesses cannot afford to offer health insurance and an increasing proportion of smaller businesses have been terminating their employee coverage. Others have been raising the share employees must pay and offering plans as skimpy as Obamacare permits.
“Connecticut small business owners continue to face the challenge of providing affordable health insurance coverage for their employees,” Markowski said. “Since the Affordable Care Act passed, our small business owners with less than 50 employees have seen an average increase of 42%. The number of small businesses offering coverage has dropped to 31%.”
As coverage rates go up, it’s common for employers to pass some of the additional costs on to the employees. Companies have had to weigh taking on that additional cost or keep the company afloat and take money out of their employees’ hands.
“Increasingly, businesses don’t cover the cost – they stop offering insurance,” Carstensen said. “And, no, there really aren’t any credible remedies on offer – unless you go with ‘Medicare for All’ which basically would create a national public health insurance framework. An effective national system can rely on private insurance companies – it is not necessarily a national public health system as in the UK – and still be much less expensive and deliver better outcomes than in America.”
Carstensen said 32% of nonunion workers have no health insurance. Employers, when they do provide health care coverage, often do so with the lowest quality permitted on Obamacare.
“The bottom line is that small businesses need health insurance that is affordable, flexible and predictable, and that means market-driven solutions, as well as looking at the underlying costs of care,” Markowski said. “NFIB is very supportive of the governor’s efforts to establish health care cost growth benchmarks, which will provide measurable data and transparency. NFIB is also supportive of legislation, which would relax Connecticut’s regulations to allow for the establishment of Association Health Plans in accordance with federal law, in order to provide another option for some small business owners to purchase health insurance.”
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Kimberly James is a regular contributor to The Center Square.
