Small Business Coverage: A Report from the Trenches

Small Business Coverage: A Report from the Trenches


John Sinibaldi, a well-respected health insurance agent in St. Petersburg, Fla., has become prominent in Florida’s broker community because he counsels and services a large book of small business clients and studiously tracks the macro trends that impact coverage for this population. And he’s active in the state’s regulatory and legislative activities.

The other day I dropped him Jane Sarasohn-Kahn’s post that reported on International Foundation of Employee Benefit Plans’ survey showing that most employers still want to be involved with health care. John responded with a long description of what the small employers he works with are up against. It’s an illuminating, damning piece. I asked him whether I could post it, and he graciously agreed.

John notes that only 36 percent of Florida’s small businesses — employers with two to 50
employees – now offer coverage. This is significant because 95 percent of
Florida businesses are small. Nationally, about one-third of all employees work for firms with fewer than 100 employees.

The increasing pressure on small business may explain why, as I
pointed out the other day, even the arch-conservative National
Federation of Independent Business (NFIB) recently co-sponsored a
reprise of the Harry & Louise health care reform ads
. This time
it advocated for, rather than against, universal health care. Previously,
they were part of the coalition that killed the Clinton reform effort.

Finally, Mr. Sinibaldi’s message should drive home a key point, echoed by Shannon Brownlee and Zeke Emanuel in the Washington Post over the weekend and Bob Laszewski’s post yesterday.
To be successful, the expansive health care reform discussions that
typically dominate in Washington MUST go beyond the Massachusetts and
California reform efforts. Approaches
that can address waste and cost are just as important as those relating
to universal coverage. Otherwise the resulting solutions will continue
to be out of reach to a sizable portion of the American people,
and the underlying driver of the crisis, out-of-control cost, will
remain untouched.

Often the discussions on sites like this are dominated by people who understand health care’s problems deeply but abstractly. For John and his employers, buying health care is a stark, concrete problem that boils down to cutting care arrangements that are affordable for the employers and employees. As he describes it, it’s an increasingly impossible task.

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4 Comments on "Small Business Coverage: A Report from the Trenches"

Nov 26, 2008

We recently had a business/healthcare forum in our area. The owner of a small plumbing company talked about the problem of providing affordable insurance to his employees. He felt strongly that his company should provide insurance for his employees, though he could not afford to provide a significant subsidy. The interesting part was that out of 25 employees, only about half wanted the insurance due to the cost. He was asked whether those declining had spousal coverage, and he answered no–they simply did not feel they could afford it. This was a group of people making around $19/hr, and the insurance effectively cut their wages by $6 per hour, since family coverage cost about $12K per year. Cost is a huge part of the problem, and in my state, small (and large) businesses are shouldering the burden of a grossly underfunded Medicaid program–and most don’t have any idea how much that is affecting their insurance premiums.

Vern Masterson
Nov 25, 2008

I agree wholeheartedly with Brian’s assertion (and Maggie’s chorus) that this problem is NOT entirely an insurance issue. While it’s true that getting medical insurance in Florida is outrageously expensive, the real reasons for this stem from the fact that it’s almost impossible to run a health care establishment now. Doctors everywhere pay huge premiums for malpractice insurance and are literally buried in administrative paperwork. The profession of doctoring needs to be simplified foremost, back to a field that is rooted in care and compassion, not greed and intellectual prestige.

Nov 25, 2008

Brian writes:
“Approaches that can address waste and cost are just as important as those relating to universal coverage. Otherwise the resulting solutions will continue to be out of reach to a sizable portion of the American people, and the underlying driver of the crisis, out-of-control cost, will remain untouched.”
Yes, yes, yes.
Too much of the focus is on universal coverage. Giving everyone a piece of paper that says “insurance” on
top will be meaningless unless we have structural reforms that contain costs and lift the quality of care.

Nov 25, 2008

I applaud Mr. Sinibaldi’s efforts to track and monitor the trends for small business. I also have a passion for those in the rural areas of Georgia who frankly have no resources other than the typical agent who is traditionally driven by the commissions. After all, a 25% rate increase is a 25% raise for everyone at the expense of the employer. It is hard to serve two masters and most serve the one who pays them. The small healthcare business issue is simply a commodity process done on a spread sheet from year to year looking for the best rates with no consideration to the actual coverage and the long term results. Time after time research has shown that higher deductibles and copays decrease compliance and increase the likelihood of larger claims in the future. We need to address the small group issue SOON and it can be done legislatively without a lot of pain while working on the global issues at the same time.