Employee health insurance is on the decline, and for small businesses, it's gone from bad to worse.
The share of small companies providing insurance plummeted from 47% to 38% between the years 2000 and 2011, according to a report from the Robert Wood Johnson Foundation.
The proportion of all companies offering insurance slid from 59% to 52%.
Annual premiums paid by individuals doubled from $2,490 to $5,081, while family premiums rose even more, from $6,415 to $14,447.
As a result, fewer companies are offering health insurance, and fewer employees are taking it.
The Robert Wood Johnson Foundation defined a small business along new health reform guidelines: those with fewer than 50 employees. The organization is a long-time supporter of health care reform.
"Small businesses just have so many pressures," said John Lumpkin, the foundation's senior vice president. "When they're facing these economic crunches, one of the things they have to cut to survive is health insurance."
Tiny companies have a harder time dealing with rising insurance costs for two reasons. These firms typically have smaller profit margins. Additionally, insurance companies charge them higher rates. That's because insurers view each company as a separate pool of risk, and smaller companies have fewer employees to spread out that risk.
"You're not going to get the same discount as a large business," Lumpkin explained. "In the insurance market, the number of people that you have determines your leverage."
In total, 11 million people lost insurance during an 11-year period. The number of people whose work provided insurance dropped from 170 million to 159 million.
Will Obamacare halt the rise in premiums? No one knows yet. But there are two prevailing theories.
(Excerpt) Read more at finance.yahoo.com ...
