The House Committee on Small Business heard testimony Wednesday on the variety of challenges faced by small businesses in making healthcare affordable.
According to a recent study, small employers have seen health premiums increase an average of more than 8 percent a year since 2001. And firms with less than 24 workers have experienced even more severe increases, the committee reported.
Witnesses at the hearing – some of whom have been forced to change health plans three times in less than 48 months – said cost is a major concern, but not the only challenge. In addition, time and paperwork take a toll.
"High premiums are a serious problem, but so are the less obvious costs faced by entrepreneurs looking to offer health benefits," said Committee Chairwoman Nydia M. Velazquez. "When small business owners are forced to divert so much of their time and resources to dealing with this, it takes away from their ability to focus on growing their firms and driving the economy."
"American entrepreneurs should not have to choose between grappling with unreasonable obstacles and dropping their health insurance," she added. "We should view the intersection of small businesses needs and the health care crisis as an opportunity, both to strengthen our economy and meet the needs of the uninsured."
Donn Teske, president of the Kansas Farmers Union, who testified on behalf of the National Farmers Union, said rural Americans face significant barriers to receiving quality healthcare. "Farmers are small business owners and as such are not able to obtain healthcare through an employer as many Americans do," he said. "For those who do have private insurance, it often comes at a high price and does not adequately provide for the high cost of receiving services in rural areas."
Teske urged government subsidies to rural Americans. "By subsidizing the cost of private insurance for those who would otherwise be unable to afford coverage, more rural Americans would be able to afford necessary healthcare coverage," he said.
Stephen Eby, MD, from a six-physician family practice near Cincinnati, said he struggles to provide healthcare coverage for his 25 employees and is unable to offer coverage to their families.
According to Eby, between 2003 and 2008, the cost of a single policy increased 80 percent, an average of 16 percent a year. "This staggering escalation has occurred despite other steps we took, such as increasing the deductible to $500 and the co-pays by 33 percent," he said.
"The inability of medical doctors to offer adequate health insurance benefits to their employees, or in some cases even themselves, is more proof that a health insurance crisis exists today in this country," Eby said. "And this is occurring while health plans are reporting record profits."