When Mary Jo Wevers left her job at the Oregon Department of Fish and Wildlife in 1995 to assist her husband with his Corvallis-based environmental consulting business, Aquatic Biology Associates, everything seemed to be falling into place.
That changed several years later, however, when Wevers and her husband were no longer able to receive health care coverage from the trade organization to which they belonged and were forced to buy their own insurance.
Although it was not a requirement, Wevers said health care coverage is something she and her husband wanted to provide to their employees.
“Health insurance is something that we wanted for our business to provide but it was just way too expensive, so over the years we had to get policies for ourselves that had very high deductibles and very little coverage for us,” Wevers said.
For a small business, high cost was always prohibitive in the insurance they could offer employees. This year, their insurance premium will increase by 20 percent.
As a result, Wevers said she would be forced to shop around every few years to find insurance companies that could provide adequate coverage for the company’s four employees at a relatively affordable price.
High-priced insurance premiums affect many of the nearly 3,500 small business owners and employees across the state each year.
However, some relief may be on the horizon with Senate Bill 99, which would create the Oregon Health Insurance Exchange as a part of the state’s health care overhaul bill passed last year.
Without several important changes made to the bill, however, some small businesses and consumer advocates worry that the bill may disenfranchise the very people it was meant to help.
Laura Etherton, an Oregon State Public Interest Research Group advocate, said many small businesses do not have much market power against insurance companies because of their relatively limited employee base.
As a result, insurance companies have the ability to take advantage of smaller businesses by charging exorbitant premiums for few benefits. If instated, the exchange program would be created by Jan. 1, 2014, and provide a vast marketplace for small businesses to pool their marketing power to negotiate lower premiums for adequate health insurance plans.
In 2014, business owners with 50 or fewer employees would be able to purchase coverage on the exchange, and that number would later expand to companies with up to 100 employees by 2016.
“Small businesses and individual consumers are getting really squeezed because they pay more but get less and less,” Etherton said. “They’re paying higher premiums but are getting higher deductibles or higher copays. It’s a big problem for small businesses. It’s really a terrible place to be because many are having to make tough decisions between whether they’re going to cut back on their benefits, not offer insurance for their employees anymore, or can essentially have less employees than they currently employ.”
This quagmire is one Rhonda Ealy has become uncomfortably familiar with. Ealy, who owns Strictly Organic Coffee in Bend, said the insurance premiums for her 27 employees have skyrocketed by nearly 100 percent over the past 12 years. The health insurance premiums that once cost $150 per person per month have risen to nearly $300, and Ealy said the quality of coverage has significantly waned over the years.
“We’re giving half the coverage for twice as much,” Ealy said.
Because her insurance premiums will be increasing by another 17 percent this upcoming year, Ealy recently had to lay off two of the company’s middle managers, in addition to imposing many other cutbacks, to compensate for the high costs.
One particular section that troubles some small business owners is that the current bill would allow industry representatives with conflicts of interest to serve on the Oregon Health Insurance Exchange Board. The bill currently allows two seats on the board to be filled by people with insurance company representatives.
“I think that not having a strong negotiating power makes the bill sound like a joke to small business people,” Ealy said. “I wouldn’t get my windows cleaned without asking several different places to give me bids, so it seems like without negotiating power, the bill is just worthless. Without negotiating power, I wouldn’t support it.”
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