Health Care Handcuffs

Here's a post from Public Insight Network editor Andrew Haeg:

One aspect of the health care debate that's gotten lost in the ruckus is the economic argument for health care reform--an argument that transcends party lines. It's on our minds because of a storyline we're hearing repeatedly from self-employed Minnesotans in the Public Insight Network, like Mark Long of Minneapolis.

"The first thing you ask yourself before you start a business," Long says is "not will someone buy my product or service" but, "can I afford health care?"

Less than half of small businesses with three to nine employees offer health care, according to research from the Council of Economic Advisors. Those small companies that do manage to provide the benefit, pay on average 18 percent more per worker than larger companies, says the same study.

The burden is getting heavier for Long. He and his wife are barely able to afford their health care plan, which has risen an average of 10 percent a year. Thankfully, they're healthy and, right now, they have enough to pay for their high-deductible plan. But not for long.

"We will close our business and find jobs that offer health coverage if nothing is done to curb costs in the next 10 years," he says. And that's without any major, unexpected health issues.

We've heard from several self-employed Minnesotans who are seriously considering leaving the land of the scrappy and self-employed. Less than a year ago, John (not his real name, he requested anonymity so his current employer wouldn't find out) had to quit working as a self-employed consultant in Plymouth when he found out he had inflammatory bowel disease. John said the move was all about risk management. He was covered by his wife's plan (and still is) but worried that if something happened to her job, they would be in big trouble.

"Closing my consulting business and getting a job was a way of hedging my bets," he says.

That sort of risk calculus is, at least anecdotally, forcing more self-employed to make similar decisions. The net effect is that, as Mark Long says, "The cost of health care absolutely is crushing innovation and entrepreneurship."

For yet more evidence, Consider Jenn Posterick of St. Francis. She runs a small massage business, but is sidelining her business and urgently looking for full-time work so she can get health care benefits.

"Ironic," she says, "that I care for other people but have a hard time caring for myself."

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