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Cost of Care: Man's small business couldn't keep up with price hikes to cover employees
02:07 PM CDT on Saturday, September 19, 2009
As the former owner of a small business, Jose Rodriguez has felt the full weight of soaring health care costs on his firm. He started his own business in 1984 – a company that built granite countertops for homes and commercial buildings.
Rodriguez offered health insurance to his employees to keep and attract good workers. The company and employees split the cost of monthly insurance premiums 50-50. But the cost became too much for his workers, so the company began picking up 80 percent of the cost in the late 1990s.
"But in the last five years, the increases were such that we couldn't keep it up," Rodriguez said. "The percentage increases were never less than 10 percent... a year. It just became totally unaffordable."
At one point, he was paying about $5,000 a month in health insurance premiums for 20 employees. "It was impossible to pay," Rodriguez said. So he dropped employee health insurance coverage at the end of 2006. "They lost it, my family lost it," he said.
The business eventually went under this past March because of the recession. Rodriguez is now a business management consultant and president of the Greater Grand Prairie Hispanic Chamber of Commerce.
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Jose Rodriguez: Small business couldn't keep up with price hikes to cover employees
He is still searching for health insurance for his family, which includes his wife and his daughters, ages 10 and 15. "I would have to pay about $1,000 a month for a policy that would cover my wife and my kids with the major medical expenses," Rodriguez said.
Small businesses take it especially hard on the chin when it comes to buying health insurance, because they don't wield the bargaining power that large companies do, he said. "They can get a group policy at a discount, so they can bargain with the insurance companies," Rodriguez said.
What's more, the higher insurance premiums that small businesses pay in relation to the total revenue that they generate is especially onerous, he said. "It becomes a real big expense, a large burden," Rodriguez said.
