The New York Times on Saturday examined problems faced by small businesses in states "where laws permit insurers to raise health premiums substantially for small employers when one worker incurs significant medical bills." According to the Times, although some states do not allow health insurers to consider the health status of employees when they establish premium rates for small businesses or cap annual increases in rates, "in many other states, it is essentially every mom-and-pop for itself."

Small businesses also face additional problems because "they typically are not rich enough to insure themselves, they are almost wholly dependent on insurance companies to provide benefits" and they "have little bargaining power with the insurers," the Times reports. As a result, "as state legislatures, Congress and presidential candidates of all stripes debate the growing problem of Americans without health insurance, the struggles of small businesses -- which employ about 40% of the nation's work force -- are likely to become a central issue," according to the Times.

Gov. Kathleen Sebelius (D-Kan.), a member of a bipartisan group that has begun to study health care issues for the National Governors Association, said, "Almost any kind of situation where one employee has a serious health condition almost makes the group uninsurable, because of cost." Sebelius added, "Affordable coverage for small-business owners and self-employed individuals is probably the biggest challenge that we have in Kansas and most states" (Freudenheim [1], New York Times, 5/5).

Health Insurance for Self-Employed Individuals
The Times on Saturday also examined how the "small businesses that struggle the most with health insurance may be the smallest of all: those with only one employee." According to the Times, 11 states have laws in place that treat self-employed individuals the same as small businesses but "elsewhere, in dealing with insurance companies, the nation's estimated 20 million self-employed are on their own."

The Times profiled Clay Williams, a 59-year-old self-employed real estate agent from Virginia who pays Aetna $1,020 monthly for health insurance for himself, his wife and his two children (Freudenheim [2], New York Times, 5/5).

"Reprinted with permission from kaisernetwork. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at kaisernetwork/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.