Survey shows Health Care Costs #1 issue for Small Business

Written September 8, 2008

The small business owner and the average benefits specialist already know that the increasing costs of health insurance are crippling small business. The National Federation of Independent Business, a non-profit organization serving as a political advocate for small businesses in all 50 states and in Washington D.C., surveys its members annually to gauge concerns. For the 20th consecutive year, health insurance costs have ranked #1.

According to NFIB, health insurance costs have increased 129% for small businesses since 2000. Employees of Small Businesses pay on average 18% more for the same coverage as employees of large companies. On the surface, this makes sense if you understand risk and actuarial processes. However, small business represents nearly half of the private GDP and small business employs nearly half of the private sector employees in this country.

So, if half of working Americans work for small business, how is it that small businesses pose a higher risk to insurance companies than large companies? I am not a statistician, but it seems to me that insurance companies charge employees of small business more simply because they can. Is it no wonder that as recently as 2005, the CEO of United Healthcare (the largest health insurer in the US) was the third highest paid executive on the Forbes list?

The system is broken. I am all for democracy and capitalism, but when one principal suffers in favor of another it is time to look into changing the status quo. Thus begins the cycle of prohibiting the small business owner from fully realizing the opportunity for capitalism that this country had promised from day one.

What is the answer? No election will solve the problems. No amount of blogging will solve the problems. If you are a small business owner, you must get involved. Start by visiting NFIB.com. Learn what the issues are and how your congressman views them. Talk to other business owners. You do not have to be a lobbyist or run for office. But it is easy to add your voice to the millions of other individual voices so that they can be heard as one where it matters most.