U.S. PIRG offers 'human snapshot' of small businesses' health-insurance dilemma

When Tracy Singleton opened the Birchwood Café 14 years ago, she was able to offer health insurance to all full-time and part-time employees. Today, she can only afford to offer coverage to full-time workers at the organic eatery.

"Every year, the costs kept going up, going up, going up — double digits like 22 percent; 26 percent was the highest," Singleton said today at a press conference in front of her café in Minneapolis' Seward neighborhood. "What that means is that every year you have to spend a whole lot of time shopping around to find the most-affordable health care plan for my employees. And what that means is that I'm trying to mitigate the cost to them because I can only pay 50 percent. … To mitigate the cost to them means we have to lower the actual plan they're getting. So, they're getting these high-deductible plans with not very much benefit."

Singleton was among more than 300 small-business owners across the nation to participate in a report from the U.S. Public Interest Research Group. The press conference announced findings in "The Small Business Dilemma: How Rising Health Care Costs are Tough on Small Business."

Effects of rising costs
Sure, 300-something is a small sampling, said John Stewart of U.S. PIRG, a consumer advocacy group. "Our goal wasn't to provide some scientific poll but to get a real human snapshot of what rising costs mean for small businesses."

Among the findings [full report here (PDF)]:

• 78 percent of the small businesses that do not offer coverage would like to do so, but 80 percent cite costs as the barrier.

• 55 percent of small businesses that offer coverage "do so to attract and retain good employees."

• 27 percent of those offering coverage do so "to increase worker productivity."

Despite reports of health-care industry lobbyists spending $1.4 million a day during the reform debate on Capitol Hill, most of the small businesses in this report think their voices aren't represented. 

"The current voices that claim to speak for small businesses — big Washington lobbies like the U.S. Chamber of Commerce and the National Federation of Independent Business — just aren't getting the job done," Stewart said. "Only 24 percent of small-business owners felt that their interests were represented in the current health reform debate."

Others speakers at the press conference were state Sen. John Marty, DFL-Roseville, and state Rep. David Bly, DFL-Northfield, co-authors of legislation to create the MN Health Plan. The bill, which seeks a single-payer system to cover all Minnesotans, has 30 co-authors in the Senate and 40 in the House, but hasn't made its way to the floor of either chamber yet.

"Simply put, it covers everyone and covers everything — cradle to grave," said Marty, who is running for governor in 2010. "When I say it covers everyone, that doesn't mean 94 percent [of people will be covered] like what's being talked about in Washington right now, but 100 percent. And it covers everything, including prescription drugs, including dental care, including chemical dependency and mental health."

Struggling to get insurance
Though Marty said he knows the Minnesota Chamber of Commerce will never endorse his plan, he hears a different story from at least one outstate chamber. "An executive I talked to at the Grand Rapids chamber said he thinks a lot of their members would be very supportive of this (MN Health Plan) because while the state association represents insurance companies, the members are people who are struggling to get insurance. … So, I think a lot of members of chambers are to the point now where they desperately need some way to take care of their employees."

"Many small-business people are spending lots of money on health care that doesn't bring them anything," Bly said. "They put a lot of money into trying to keep insurance and increases keep going up and up and up, and yet they're not buying any real health care."

Papa John Kolstad, a musician and owner of Mill City Music who has run for public office on a single-payer platform, told the small assembly that Minnesota could see job creation if the Marty-Bly bill were passed.

"This would be the biggest magnet to Minnesota for jobs to be created," said Kolstad, a member of Metro Independent Business Alliance. "It would draw businesses from all over the country ... that would take the Minnesota economy back to the Minnesota miracle again. This is proven by many studies; it's not just an idle assertion. So, if they can't do it for the right reasons, which would be the humanitarian reasons, they should do it for the business reasons."

Casey Selix, a news editor and staff writer for MinnPost, can be reached at cselix[at]minnpost.com.