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Rising Costs
David Borris
Recently, small business owner David Borris sat down to compute the rate increases he and his company have experienced in health care premiums over the past several years. He was astounded by what he discovered. The premiums that David will pay in 2007 for his employees’ coverage have gone up approximately 90% since 2003, and the current plan has triple the deductible of the 2003 plan.
David explains that he has seen many of his competitors opt for Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs) in recent years, in an effort to alleviate some of the burden. Thus far, David has been able to avoid the shift to HSAs, which he realizes are counterproductive for both his employees and his business, and continues to pay 100% of his employees’ premiums. However, he is concerned that he too is nearing the breaking point where he will have to consider a less comprehensive plan or ask employees to contribute more out-of-pocket toward premiums. “Businesses simply cannot continue to absorb double digit increases every year when our revenues don’t go up at that rate. Health care costs are the 800 pound gorilla, eating up every reserve dollar.”
David’s company first began offering health insurance to employees in 1990. At the time, he was motivated not only by a sense of moral responsibility but also by a desire to attract the most talented workers in the field. Offering comprehensive health benefits to prospective employees was key to being competitive. In today’s market, David acknowledges that he does not have to offer such a good plan in order to compete and he maintains it solely because of his desire to be a good employer. If David were starting his business today, he admits that he would not be able to afford the plan that he currently offers his employees. From a personal standpoint, David sees the health care crisis as a profoundly moral issue and he also recognizes the economic unsustainability of a system that expects business owners to absorb double-digit rate increases every year. If you are a small business owner who is dealing with similar issues, join David and others across Illinois in calling for reform that will lessen the burden on responsible employers.
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