More on Health Insurance

This is number ten in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at the trend of Health Care Costs.

In an earlier post we discussed the ever-growing problem of employee health insurance.  Turns out health care costs are challenge number six on Stanyon’s list.  He calls it "The most important domestic problem in the U.S." 

High insurance costs hit the independent business with a double whammy.  First, insurance companies charge higher premiums to smaller firms.  This gives the larger competitors an unfair advantage.  Second, because we Americans expect our employers to provide health coverage for us, if you don’t offer it, you’ll never attract the best employees. 

An editorial last week in the St. Louis Post Dispatch said, " A
record 46.6 million Americans were uninsured last year, largely because
the number of people getting health insurance through their jobs has
declined steadily. In 2000, 64 percent of Americans got health
insurance at work. By 2005, it was 59.5 percent.

In part, that’s because insurance premiums have increased much faster
than inflation. On average, family coverage now costs about what a
full-time, minimum-wage worker makes in a year.

Part is also because of the growing role of small business in the local
and national economy. Small companies often don’t have enough workers
to get affordable group health insurance rates, and their premiums can
rise quickly if one employee gets seriously ill."

As mentioned in our earlier post, some progress is being made on a federal law to allow smaller employers to join insurance pools which would decrease the risk for the insurance companies and lower costs for the independent business.  Considering that independent business pays more than 45% of the total US payroll, health insurance relief should be a top priority of the House and Senate.

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