Double-digit hikes for health insurance?

In Vermont, we have roughly 80,000 small businesses employing almost 160,000 employees and according to the U.S. Small Business Administration, the last half dozen years have been a struggle. To say the least. There has been a net decrease in the number of Vermont businesses established and a contraction in the number of people employed.

As a group, no other group is as sensitive to what it costs to run a business. A sizable percentage operate on a wing and a prayer, knowing any unforeseen expense can be the difference between making payroll or not.

Thus, when BlueCross Blue Shield and MVP Health Care announced their proposed premium rate increases last week, it sent a shudder down the spine of the small business community and their employees. BCBS has proposed a 16.3 percent increase for individual plans and 19.1 percent for small group plans. MVP has proposed an 11.7 percent increase for individual plans and 9.3 percent for small groups.

The proposals have been filed with the Green Mountain Care Board, which will review the proposals and decide on the increases in late summer or early fall.

But this is the third year in which health care premiums have been in the double-digit increase category. It doesn't take an accountant to figure out the pace is not sustainable.

Fortunately, individuals who get their health insurance from Vermont Health Connect are protected through the Affordable Care Act and the federal money used to subsidize the increases [at least through 2025.] That does not apply to small group plans.

So how are small businesses supposed to contend with double-digit premium increases? Most don't. They try to hire workers who get their insurance through their spouses. Or, they are forced to saddle the employee with a higher percentage of the cost. Or they cut the number of employees. Or they just close shop.

For a state that struggles with its demographics and for a state desperate to attract new growth, soaring healthcare premiums present additional challenges. People who want to start their own businesses don't. People who are considering Vermont as a place to live and work look elsewhere.

These premium increases could also have a dramatic effect right here at home with our present-day businesses. According to a national poll, 47 percent of those companies that offered health insurance would not be able to continue the practice if premiums were to increase fifteen percent. It's safe to assume that percentage would apply to Vermont's small businesses as well.

The looming fear is that these small businesses would quickly begin to lose their employees. The labor market is still tight, with far more jobs available than people willing to fill them. Health insurance is essential for most people looking for work. They will move to the companies that can meet their needs. Once they leave it's difficult for businesses to get them back, or to replace them.

Not an encouraging prospect.

Sen. Peter Welch recently met with a group of Vermont business owners and he stressed the need of Congress to challenge the predatory practices of pharmaceutical companies that have used the nation's patent laws as a means of controlling the marketplace, being able to dictate prices.

That's essential, but only one of many considerations that must be addressed. If there is any part of the nation's economic "infrastructure" that needs tending it's our health care system.

In the meantime, it will be the job of the Green Mountain Care Board to trim the insurers' proposed rate increases and, while they are at it, ask BCBS why it is that its group rate proposal is double what MVP is proposing.

It's a story to which much of Vermont will be paying attention.

By Emerson Lynn