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Small Employers Pare Health Benefits; Increase Worker Costs
Insurance Brokers Help Some Firms Find Affordable Health Insurance
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ASHINGTON, D.C.—Rapidly rising health insurance premiums hit small employers particularly hard, prompting many to require workers to pay a larger share of premiums, raise copayments and deductibles, reduce benefits and switch insurance, according to a study released today by the Center for Studying Health System Change (HSC).
While large employers generally made only modest changes in health benefits in 2001, smaller firms—those with fewer than 50 workers—generally faced higher premium increases and were more aggressive in shifting costs to workers, according to findings from HSC site visits to 12 nationally representative communities. The 12 communities are Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; Northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.
"Small employers pay more for coverage and typically have lower-wage workers than large employers, so rising premiums hit small firms harder," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation. "With todays weaker economy and even larger premium increases, more small firms will drop coverage altogether."
A second HSC study examining the role insurance brokers play in helping small firms obtain health coverage found that brokers can provide valuable services, such as obtaining prices for coverage, explaining benefits to employees and resolving claims disputes with insurance carriers.
"For many small employers, insurance brokers are the firms health benefits staff, intervening with health plans when there are claims disputes or service issues," said Leslie Jackson Conwell, an HSC analyst and author of the study on brokers.
In some markets, brokers also help educate employers and employees about public insurance programs and state policy initiatives to expand coverage.
The findings are detailed in two new HSC Issue Briefs—No. 56 - Cutting Back But Not Cutting Out: Small Employers Respond to Premium Increases and No. 57 - The Role of Health Insurance Brokers: Providing Small Employers with a Helping Hand.
The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely insights on the nations changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded exclusively by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.