While small businesses across America nervously wait for the outcome of the much needed reforms to our health insurance system, we fear the battle will be lost due as much to a lack credible reporting on the subject as the limited understanding of the problems.
As I was entering the workforce 30 years ago, I remember starting to tune into business news that provided hard hitting facts to guide more effective business decision making. Today, your business publications might as well be sold next to People Magazine. We needed your help to frame the issues and you let us down.
The sensational and unsubstantiated claims about killing grandma through government run health care programs have taken the place of insightful journalism. In all the articles I have read, not a single article even references communication with the actual customer.
In the case of health insurance, that would be people like me who actually pay insurance companies for covering our employees. How can you possibly frame the issues when you never even interviewed all the parties?
Shame on you. More important, shame on us for letting it happen. We should have been bombarding you with letters to the editor prior to now. Because this is late and it works against your ratings as the business version of People Magazine, you probably won’t print this letter.
From the customer’s perspective, here is the problem. I employ almost 50 professional staff that depend on the health insurance our company provides. These are critical resources to our firm and are the reason our clients do business with my company. I must help them take care of their families or they cannot afford to work for our company. Accordingly, many CEO’s like me are very interested stakeholders in the health insurance debate.
In case you have not yet heard the news, the current health care and health insurance system is broken. We do not have to wait for the “Government Run Option” to mess things up. They already are. I pay more than 20 percent of my payroll cost in health insurance premiums.
The premiums have been growing at over 15 percent per year and are currently at a point where I can no longer afford it. What do we do? Many employees have not yet been told the truth that their health coverage is at risk, but I can assure them that every small business is struggling to pay health insurance premiums. The worst part is that health insurance carriers in Colorado enjoy a monopoly.
When I retained a “health insurance expert,” I was told that it does not matter how much I try to bid my plan, there are only two realistic health insurance choices in Colorado and they both collaborate on pricing.
As a result, Colorado is the Mississippi of health care costs. It is one of the few areas where Colorado rates below Mississippi. To make matters worse, our local elected representatives have passed legislation that allows and even encourages the monopoly to continue. This cozy relationship between our legislature and the health insurance carriers is devastating to our small businesses but they remain firmly seated on their hands.
I ask myself, “Why should the insurance carriers or legislators change when our few remaining journalist don’t even have the curiosity to point out the problems?” On behalf of CEO’s across Colorado, I respectfully ask that the health insurance monopoly be abolished and allow me and my counterparts to join together in establishing health insurance trusts or exchanges and obtain bids from carriers throughout the United States. Don’t give us a bailout – just allow us to compete for our health insurance coverage.
Here is what is at stake in this debate. Two years ago, I was told that the health care costs are going up because consumers were misusing the system. In response, my company adopted a high deductible plan where our employees had to spend $6,000 out of pocket before they received the first dollar of heath care reimbursement. At the end of the year, we paid our health insurance carrier $320,000 in premiums and received only $30,000 in health care reimbursement.
The insurance carriers made over 90 percent profit on us. Okay – this will “bend the cost curve down.” But, no. The next year, our premiums were increased by over 15 percent. When I called to ask why the premiums were increased so much when we did change consumer behavior and did lower our burden on the healthcare system, I was told that the rates went up because the carriers could raise the rates. There was nothing I could do.
Well, there is something I could do. I moved my company headquarters to the state of Washington since some of our employees were already located in the state. When my company moved to Seattle, we qualified to participate in a Washington sponsored Health Insurance Trust where we received better coverage for a 25 percent premium reduction.
You will love this part. The exact same insurance company picked up our enhanced cover at a 25 percent premium reduction. When I asked why, I was told that the Trust was able to compete for the business and the competition lowered the rates. For you other CEOs in Colorado beware. You are paying 25 percent more for health insurance than you should simply because our local legislature will not allow you to consolidate employees and openly bid for a carrier to cover the employees.
In hopes that some courageous editor will allow the truth to be printed, please accept this as my contribution to the debate. After paying over $1 million health insurance premiums, I do understand a part of the problem. Sure, we have other issues like providing transparency for health care services prices and for cost containment on the delivery side, but I am not an expert on those issues.
As for uncontrolled monopoly pricing and the impact on small business, I am an expert and glad to have the opportunity to contribute to a healthy debate. So can we move beyond the silly discussion about killing grandma?
Rick Dakin is president and CEO of Coalfire Systems, Inc. He lives in Louisville. EDITOR’S NOTE: This is an online-only column and has not been edited.
