Health care costs stifle business creation
State Rep. Sean Scanlon’s motivation for wanting affordable health insurance options for small businesses comes from personal experience. His mom, a small business owner and single mom, rarely had health insurance. “No one who is running a small business in Connecticut and working as hard as she did to put food on our table should have to go without insurance because they can’t afford it.”
Last Monday, I joined Rep. Scanlon, Sen. Matt Lesser, state Comptroller Kevin Lembo, and other business owners at the State Capitol in Hartford for a roundtable on House Bill 7267 and Senate Bill 134 bills, which would allow small businesses to buy into the state employee health insurance plan.
“This bill will provide folks like my mom what they desperately need: a quality, affordable and predictable insurance option,” Scanlon said.
It can’t come soon enough. Every year, we pay more and get less for it.
But the private health insurers and CBIA are pushing back. Like many self-employed and small business owners who welcome this legislation, I’m concerned that Gov. Ned Lamont is more tuned in to the voices of the big insurance companies and their lobbyists.
The insurance industry claims that the proposal will cost jobs, which is deeply ironic, because in November 2015, I covered how Connecticut insurance companies such as Cigna and Healthnet were outsourcing middle class IT jobs abroad to cut costs and increase profits. Yet now they’re trying to use the excuse of losing jobs to prevent small businesses from having greater choice in health care options?
Insurance costs for small businesses have increased at levels far above the rate of inflation consistently — pre- and post ACA. Health insurance company concern about jobs isn’t nearly as consistent as their concern about profits. In 2018, CEO pay for big health insurers ranged from $14M for Anthem CEO Gail Boudreux to $21.9M for CVS/Aetna CEO Larry Merlow.
Sen. Lesser read an advertisement run by the lobbying group Insurance Matters to Connecticut, whose “partners” include Aetna, Anthem, Cigna, Connecticare, United Healthcare, and CBIA.
The opening line: “Connecticut’s private insurance options are working just fine.”
Working for whom, exactly? For too many Connecticut businesses, rapidly rising health care costs are impacting their ability to treat employees well, this making it harder to retain trained workers.
Karen Ross, of Joe’s Salon in New Milford, worries about retaining young people. “On top of their other bills, the health insurance premium is tough to handle. We don’t want to lose young adults to other parts of the country.”
Ingrid Manning of the Northwest CT Land Trust says nonprofits also struggle. “Smaller nonprofits often have to make a choice whether to increase wages or provide health insurance as the health insurance premiums continue to rise.”
CCSN, the Center for Children with Special Needs in Glastonbury, is finding it increasingly difficult to give employees a robust benefits package, explained Co-Director Seth D. Powers. “In 2018 we selected an HSA plan that offered zero percent co-insurance after the employee deductible was met. This at least allowed us to communicate to our staff that while their costs would be increasing, there would be a ceiling. In 2019 there were no plan offerings for zero percent co-insurance after the deductible.”
CCSN supports the proposed legislation, which will put small businesses on a more equal footing by allowing them to aggregate and increase buyingpower. This “could deliver a meaningful cost-savings as well as offer more robust coverage at a lower-cost to businesses and employees.”
Lamont and legislators should open their ears, because small businesses are rooted in local communities and won’t be lured away by another state offering more taxpayer-funded corporate welfare.
As Powers observes, the savings that smaller businesses make on health care “would be re-invested back into the Connecticut economy through any number of channels” whereas “the double-digit year-over-year increases” in health care costs “will continue to negatively impact the ability of small businesses to thrive.”
Is Gov. Lamont listening? Are our local legislators? If not, have they considered the stifling effect that exorbitant health care costs have on new business creation? Sarah Ficca, a freelance writer from Deep River, considered opening a business with her husband. “He opted to stay in his corporate job because of health care.”
State Sen. Alex Bergstein, D-Greenwich, Stamford, New Canaan, is on board. State Rep. Livvy Floren, R-Greenwich, Stamford, told me: “I am totally supportive of letting small businesses and self-employed individuals join the state health plan ... but I have not seen the final language in these bills yet.”
As yet, I have not heard back from state Rep. Stephen Meskers, D-Greenwich, or state Rep. Fred Camillo, R-Greenwich. But I hope that they, too, will recognize that small businesses are a growth engine, as well as a source of creativity and innovation. Giving us a more affordable alternative is not only humane; it makes good business sense.
I’m concerned that Gov. Ned Lamont is more tuned in to the voices of the big insurance companies and their lobbyists.