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The employees of Austin’s small businesses are at risk under the current health care system, according to a recent study.
The study, conducted by the Texas Public Interest Research Group, examines how the current health care system negatively affects smaller businesses across the nation. Many of the effects of the system that pertain to Austin include increases in the cost of health care premiums for employees as well as businesses’ inability to provide insurance coverage for employees because of high costs.
The study also shows a problem in smaller businesses’ inability to attract and retain high quality employees due to the lack of incentive to work for businesses with no promise of insurance coverage or health care benefits.
Elizabeth McClellan, program associate for the group, said that the high costs of the present health care system are placing smaller businesses in a serious competitive disadvantage because of the insurance rates.
“Basically, larger businesses get much better insurance rates because these larger businesses bring more employees to the table,” McClellan said. “They have much more incentive to work for them.”
The group discovered that annual premiums for family coverage for smaller business employees have more than doubled since 1999, increasing at a rate of 12 percent each year, yet family incomes rose only 29 percent over the decade.
“Health care companies have no reason to invest in small businesses,” McClellan said. “It makes it clearer that the present health care is making life very difficult for businesses all across the nation, especially in Austin.”
The study also shows that without health care reform, health care costs will force smaller businesses to cut 178,000 jobs by 2018. Fifty-nine percent of smaller businesses provide health care coverage, a 9 percent decrease from similar studies conducted in 2000.
John Grey, co-owner of Clayworks, an Austin-based architectural ceramics shop, said that the cost of insurance was too much to pay.
“Our son has a disease, and the insurance company refuses to cover him,” Grey said. “If he is on a health insurance policy, it raises our rates so incredibly high. We simply just cannot afford it.”
Grey said that because his family has been declined by more than three insurance companies, the family pays for the Texas Health Insurance Pool, which costs double the average insurance coverage. The pool was created by the Texas Legislature to provide health insurance to eligible Texas residents who, because of medical conditions, are unable to obtain coverage from commercial insurers, according to the program’s Web site.
“More than half the people who work here are family,” Grey said. “The business hasn’t been able to provide insurance coverage for the past 10 years because of the costs.”
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