Health care costs continue to rise for small-business owners |

Health care costs continue to rise for small-business owners

Staff Report

Most Colorado small business owners have had to increase health insurance deductibles, decrease coverage or change plans this year due to higher costs, according to a new National Federation of Independent Business study.

“The study shows almost 60 percent of owners had health care cost increases of more than 20 percent compared to their 2002 premium costs,” said federation spokesperson Tim Jackson.

Jackson said the federation surveyed 12,000 small business owners in Colorado, and 80 percent paid higher costs in 2003.

This year’s higher costs follow last year’s health care insurance hikes, when 69 percent of small business owners saw increases of more than 20 percent, Jackson said.

Jackson claimed there are four reasons for increased health-care premiums in Colorado:

– Government regulations and mandates.

– Trial lawyer litigation.

– High pharmaceutical costs.

– Insurance costs shifts from Colorado’s auto insurance reforms.

Jackson said higher health insurance costs are linked to auto insurance, after the Colorado legislature repealed the state’s “no fault” insurance system earlier this year. The lower costs many motorists now pay for auto insurance, are more than made up with higher costs they pay for health insurance.

Higher costs also come from the state mandating “Cadillac” health plans that require insurers to include prostate screenings and mammograms in their coverage.

“A lot of the mandates sound good,” Jackson said. “But not everyone can afford a Cadillac.”

Other highlights from the federation study include:

– 2003 is the fifth consecutive year in which at least half of Colorado’s small employers saw health-care costs increase more than 20 percent from one year to the next.

– Just over 75 percent of the small-business owners in Colorado offer health-care benefits. “That number is much higher than nationwide studies report,” Jackson said.

Jackson said the federation is working to encourage federal legislation to allow association health plans, which would allow small-business owners to band together across state lines to purchase health care insurance.

The federation will also call on the Colorado General Assembly in the next legislative session to encourage provider competition, especially in rural areas.

Jackson said he anticipates the federation will oppose proposed state legislation that would prohibit physicians from owning and operating their own hospitals. Jackson said surgical costs have decreased in some Colorado towns where physicians have opened their own facilities.

For more information on the National Federation of Independent Business 2003 health-care cost study, call (303) 860-1778, or visit the Web site

The National Federation of Independent Business is a nonprofit, nonpartisan organization, with 600,000 members in all 50 states.

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