Some small businesses are scaling back or ending health coverage

Nov 18 2009

"Across the country, businesses already strapped by the economy to turn a profit are sacrificing or scaling back employee health insurance plans because of their escalating costs," The Associated Press reports. "The crunch has particularly socked smaller employers, who have become a centerpiece in the debate over how to overhaul the nation's health care system."

"In recent weeks, small business owners have pleaded their case to the White House and Congress. Top Democrats in both the House and Senate have announced probes into how health insurers price their policies for small businesses. And lawmakers have proposed a variety of insurance rating changes, mandates and tax breaks to try to control costs." Small firms often pay high insurance rates because they "lack the leverage of their bigger counterparts to negotiate with insurers. ... Many small businesses seek to soften rate hikes by asking employees to make higher co-payments, offering high-deductible plans, switching to less generous benefits or simply dropping their coverage" (Lieb, 11/18).