Florida Health Insurance Topic:
"Health Costs Rising?"

Health Insurance (Costs Rising)

Many small businesses are worried that rising health insurance costs are choking their growth and hindering the creation of new companies, and they fear health care reform plans being debated in Congress and by the Obama administration could end up costing them even more in taxes, according to business advocates.

A survey of views on those costs released yesterday by the U.S. Public Interest Research Group, which includes its counterpart Maryland PIRG, found that 29 percent of the 343 small businesses they interviewed were able to offer insurance. Of the 21 businesses surveyed in Maryland, nine provided health coverage and nearly all said their insurance costs rose over the past year.

A dozen Maryland small-business employers said difficulties with health care would prevent others from starting their own businesses in the future. Nicholas Green, a field organizer with Maryland PIRG, said the report was not scientific but intended to be a "real human snapshot" of the struggles that owners of small businesses and their employees face. "Rising health care costs are choking American small businesses just when we need them the most," Green said.

Carma Halterman, a coffee shop owner in Charles Village, said the costs - around $300 a month per employee - are too prohibitive for her to offer insurance.

"We go for days and weeks sometimes with a nagging medical condition, avoiding the cost of treatment, and that really affects my bottom line and productivity," said Halterman, 46, owner of Carma's Cafe, while joining Maryland PIRG officials in the report's release Tuesday outside her shop.

The U.S. PIRG report comes as the debate on health care reform ramps up in Washington, with the Obama administration and congressional Democrats facing criticism from Republicans that their plans would be more costly to taxpayers.

A Senate bill would put the cost of health care reform at about $600 billion. A House bill, which passed through the Ways and Means Committee on Friday, would allow the uninsured to get a public or private insurance plan, or keep the plan they currently use. An estimated 47 million people in the U.S. lack health insurance.

About half of the House bill's $1 trillion price tag would come from Medicaid and Medicare changes, while the other half would come from a variable surcharge on 1.2 percent of the wealthiest Americans, those making $350,000 or more.

Businesses with fewer than 25 employees would get a tax credit, but employers and individuals could face tax penalties if they don't offer and buy insurance under the House plan.

In Maryland, the U.S. Small Business Administration's Office of Advocacy estimates that businesses with fewer than 500 employees - which they defined as a small business - numbered more than 112,000 in 2006, the most recently available data. Most of the businesses surveyed by U.S. PIRG were even smaller, with 50 employees or less.

According to the U.S. PIRG survey, more than three-quarters of the small-business owners they surveyed who don't offer health care felt stymied in doing so due to high costs, complications and red tape.Of those businesses that could afford coverage, 55 percent indicated that they did so for business reasons - to attract competitive employees - and not altruistic ones, the survey found.

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