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SMC Business Councils Releases Health Care Survey Results

Posted on: Monday, 20 February 2006, 15:00 CST

PITTSBURGH, Feb. 20 /PRNewswire/ -- SMC Business Councils conducted an online survey last week of 150 local small business owners' current thinking about issues related to skyrocketing health care costs.

According to SMC President Cliff Shannon, "Business owners' frustrations with seemingly uncontrollable health insurance costs are mounting. Passing along more costs to their employees -- or even dropping job-based coverage altogether -- is seen by larger and larger numbers of entrepreneurs as a financial and competitive necessity. And although deep misgivings remain about the consequences and costs of a national, single-payer health care system, there is increasing agreement that this outcome may be inevitable."

The SMC survey collected on-line responses from a sample of 150 western Pennsylvania business owners. Highlights of the results, including additional comments from respondents, covered three major areas:

Health Savings Accounts. More than one-half of the small business owners who responded agreed that health savings accounts (HSAs) and more individual responsibility could make a measurable difference in containing health care costs. But only one-fifth of respondents indicated that they are actively considering an HSA option right now. More than one-half believe that the President's proposals will have no effect on the likelihood of their organization offering an HSA option in the future.

One respondent said: "There is one significant problem with the move to HSA-based insurance. Insurers can decline coverage or coverage for pre- existing conditions to consumers of individual policies. This is a huge deterrent for those who would otherwise favor HSA/high deductible coverage."

Controlling health insurance costs. Among respondents whose organizations offer job-based health insurance coverage, nearly 60% reported 2005 health insurance premium increases of 10% or more. Among these, about 40% said their 2005 premiums rose by 20-100%.

According to another frustrated business owner, "Something must be done to fix the current system. My premium for an employee with family coverage is now ... over TEN THOUSAND DOLLARS per year!"

Most respondents indicated an intention to pass some or all of future coverage cost increases to their employees. Three out of five respondents said they would consider rewarding employees in the future for maintaining healthy lifestyles or taking steps to improve unhealthy behaviors.

These insightful comments from respondents were noteworthy: "Everybody wants to pay for a Kia and drive a BMW.""Health insurance is just too costly for small businesses and individuals.""Health insurance costs are killing our company's profitability."

One-out-of-eight respondents whose organizations offer job-based coverage today said that they would seriously consider terminating job-based coverage this year if upcoming premium hikes were similar to 2005.

Although relatively few small employers offer HSA's currently, larger numbers are switching to high-deductible health insurance coverages in order to pass along some of increased coverage costs to employees. More than one- fifth of respondents to the SMC survey have already switched to high- deductible coverage, and more than two-fifth's of remaining respondents indicated that they plan to consider switching to a high deductible plan at the next renewal.

How to control rapidly rising societal health care costs. Survey respondents selected their three "most significant drivers of health care costs." Their cost-driver nominees were virtually identical to those identified in parallel SMC online polls in 2004 and 2005.

- An aging population that needs more health cares services (61%) - Prescription drug prices and increased utilization of Rx (52%). - Profiteering by insurers (50%). - Medical malpractice lawsuits (47%). - Too little individual responsibility for health care costs (30%) - Virtual monopolies by a few large hospital systems (23%)

Nearly two-thirds of SMC respondents said they thought that a national, single-payer system was undesirable - but nearly one-half of all surveyed agreed that a national, single payer system is (politically) inevitable.

Comments from respondents included: "American business is at a huge disadvantage due to high health care costs.""A universal standardized system that covers everybody would be fair and probably less expensive for each individual.""A national health care system is an absolute necessity to keep this country's businesses competitive with the rest of the world."

SMC Business Councils is a non-profit trade association representing 3,500 small business owners in western and central Pennsylvania. The association is headquartered in Churchill with a branch office in Harrisburg. Additional information on SMC's health care positions can be found on the Internet at http://www.smc.org/ and on the SMC blog, http://smcbusinesscouncils.blogspot.com/.

First Call Analyst: FCMN Contact:

SMC Business Councils

CONTACT: Mary Heindl of SMC Business Councils, +1-412-371-1500 x 229

Web site: http://www.smc.org/http://www.smcbusinesscouncils.blogspot.com/

Source: PRNewswire

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