September 13, 2004
A view from the trenches | Business owners' thoughts on the Dirigo Health Plan
By Brian Ketchen
Co-owner, Dave's Appliance Inc., Winthrop
Dirigo Health is already a success fordrawing attention to small biz problems
Dirigo Health is a success story. It is not, however, what its detractors claim it is: a hurried, partisan victory. Rather, as I stood behind Gov. John Baldacci on that very pleasant day in June 2003 while he signed his universal health plan into law, I observed a governor swiftly acting to subdue a problem more detrimental to Maine small businesses than any global sprawl or the local influx of national mega-retailers: the current cost of health care in Maine. Dirigo Health was, at that moment, already a success story, defined by the hope of affordable health coverage and fairer consumer practices by way of disclosure of health care pricing.
Since that day, I so badly wanted to believe Dirigo Health would work that I studiously read, printed and filed every biased criticism that came across my $15 yard-sale desk. Throughout months of the anti-Dirigo campaign (the largest soapbox can be found at the Maine Heritage Policy Center, www.mainepolicy.org), I rarely recognized a voice like my own on paper. In the end, I concluded that my opinion is beyond reproach, anyway. For my family-owned small business, along with a majority of Maine small businesses with fewer than 50 employees, is supporting a current health care system that is exorbitantly expensive, and that returns no value, validation or signs of deflation. We pay the way for larger companies to enjoy lower monthly costs on health insurance ˆ if they offer it as a benefit at all. We pay for huge salary bonuses to be disbursed within the hospital and insurance bureaucracies, and stand in the midst of hospitals' capital expansion, in which costs are ultimately passed onto consumers through higher insurance premiums.
To be competitive, a small business must immediately put health insurance on the table for the retention of skilled workers and the elimination of constant turnover. My family still believes the crazy notion that a person ought to come to his or her job each day without the worry of providing financial stability at home, so our company still pays 100% family health coverage.
Meanwhile, each morning we open our doors in my hometown of Winthrop with fellow chamber members who cannot afford for their employees (and sometimes themselves) even the cheapest policies the free market has to offer. I know how they feel. It's tough to write that check each month, but we do it. In the meantime, much is written to feed the mentality of simply pushing our employees onto the Medicaid system without considering the benefits Dirigo Health can offer.
I believe small businesses that struggle to pay for health insurance do so to preserve the wellness of their employees and their families. I also believe that most individuals and businesses that justifiably cannot afford insurance would rather pay their own way ˆ if they were offered a viable product. These voices are drowned by the rhetoric that Maine should rather institute high-risk pools that only further segregate the old, the sick, the poor and any combination thereof. Dirigo Health encourages a greater population to begin paying into and improving a burdened health care system, and in turn provides higher quality health coverage; future predictability in annual premium costs; sliding scale discounts based on household incomes that will lower annual deductibles; and a decrease in the ratio of uncompensated care.
According to the Maine Small Business Alliance, the state of Maine spends over $5 billion each year on health care without a state-sponsored program in place. Bad debt and charity care amounted to $275 million as far back as 2001, so how can it be said that Dirigo Health will be a costlier approach for small business when, in the current system, shortfalls are converted into hidden taxes and outrageous insurance and hospital fees? The free market does not allow small retail businesses to unabashedly pass the ills of the economy onto their customers, nor should the health care industry at large be so indiscriminate.
Our own store is comprised of four owners and a current non-family staff of 13, our largest complement since opening in 1976. Eleven of these 17, including owners, are enrolled in the company's health insurance policy, which requires a group premium of more than $5,000 a month. A family policy costs nearly $800 a month, while an unmarried individual's policy is approximately $250. We lock in these "great" rates by annually jacking the out-of-pocket deductible to what is currently $2,500 per individual and $5,000 per family. (I estimate the personal, out-of-pocket cumulative expense for chemotherapy for my wife, Kellie, was $900 per hour of outpatient treatment.)
My company sells, delivers and services household appliances, which means that in addition to our paying for what is presumably 24-7 health coverage, workers' compensation insurance for this type of labor will shave another 10 grand off the annual bottom line. That means that a decade of status quo and the traditional incremental increases in premiums amount to nearly one million dollars paid by our little company into private, for-profit health insurance carriers.
In the last 25 years, the cost of employer-sponsored health benefits has increased 373%, four times more than cost-of-living expenses, according to the Employment Policy Foundation. Our average annual group policy increase often exceeds 20%, usually higher than the percentage increase of bad debt and charity care. Our average income per household does not exceed $46,000, collectively putting us 300% below the federal poverty level.
If our company were to switch from our current Anthem Blue Choice plan to Dirigo, our costs will level out ˆ no more 20% percent typical annual increase ˆ and our out-of-pocket expenses will be cut by 50% or more for exactly the same comprehensive coverage! We are eagerly waiting for the governor's product to come to fruition.
Dirigo Health is a logical and laudable next step for Maine's health care system. Its innovation will irrefutably invite more small businesses into the market, therefore producing and retaining a healthier labor force and improving the benefits package that every Maine business should be able to offer.
Dirigo Health is already a success fordrawing attention to small biz problems
Dirigo Health is a success story. It is not, however, what its detractors claim it is: a hurried, partisan victory. Rather, as I stood behind Gov. John Baldacci on that very pleasant day in June 2003 while he signed his universal health plan into law, I observed a governor swiftly acting to subdue a problem more detrimental to Maine small businesses than any global sprawl or the local influx of national mega-retailers: the current cost of health care in Maine. Dirigo Health was, at that moment, already a success story, defined by the hope of affordable health coverage and fairer consumer practices by way of disclosure of health care pricing.
Since that day, I so badly wanted to believe Dirigo Health would work that I studiously read, printed and filed every biased criticism that came across my $15 yard-sale desk. Throughout months of the anti-Dirigo campaign (the largest soapbox can be found at the Maine Heritage Policy Center, www.mainepolicy.org), I rarely recognized a voice like my own on paper. In the end, I concluded that my opinion is beyond reproach, anyway. For my family-owned small business, along with a majority of Maine small businesses with fewer than 50 employees, is supporting a current health care system that is exorbitantly expensive, and that returns no value, validation or signs of deflation. We pay the way for larger companies to enjoy lower monthly costs on health insurance ˆ if they offer it as a benefit at all. We pay for huge salary bonuses to be disbursed within the hospital and insurance bureaucracies, and stand in the midst of hospitals' capital expansion, in which costs are ultimately passed onto consumers through higher insurance premiums.
To be competitive, a small business must immediately put health insurance on the table for the retention of skilled workers and the elimination of constant turnover. My family still believes the crazy notion that a person ought to come to his or her job each day without the worry of providing financial stability at home, so our company still pays 100% family health coverage.
Meanwhile, each morning we open our doors in my hometown of Winthrop with fellow chamber members who cannot afford for their employees (and sometimes themselves) even the cheapest policies the free market has to offer. I know how they feel. It's tough to write that check each month, but we do it. In the meantime, much is written to feed the mentality of simply pushing our employees onto the Medicaid system without considering the benefits Dirigo Health can offer.
I believe small businesses that struggle to pay for health insurance do so to preserve the wellness of their employees and their families. I also believe that most individuals and businesses that justifiably cannot afford insurance would rather pay their own way ˆ if they were offered a viable product. These voices are drowned by the rhetoric that Maine should rather institute high-risk pools that only further segregate the old, the sick, the poor and any combination thereof. Dirigo Health encourages a greater population to begin paying into and improving a burdened health care system, and in turn provides higher quality health coverage; future predictability in annual premium costs; sliding scale discounts based on household incomes that will lower annual deductibles; and a decrease in the ratio of uncompensated care.
According to the Maine Small Business Alliance, the state of Maine spends over $5 billion each year on health care without a state-sponsored program in place. Bad debt and charity care amounted to $275 million as far back as 2001, so how can it be said that Dirigo Health will be a costlier approach for small business when, in the current system, shortfalls are converted into hidden taxes and outrageous insurance and hospital fees? The free market does not allow small retail businesses to unabashedly pass the ills of the economy onto their customers, nor should the health care industry at large be so indiscriminate.
Our own store is comprised of four owners and a current non-family staff of 13, our largest complement since opening in 1976. Eleven of these 17, including owners, are enrolled in the company's health insurance policy, which requires a group premium of more than $5,000 a month. A family policy costs nearly $800 a month, while an unmarried individual's policy is approximately $250. We lock in these "great" rates by annually jacking the out-of-pocket deductible to what is currently $2,500 per individual and $5,000 per family. (I estimate the personal, out-of-pocket cumulative expense for chemotherapy for my wife, Kellie, was $900 per hour of outpatient treatment.)
My company sells, delivers and services household appliances, which means that in addition to our paying for what is presumably 24-7 health coverage, workers' compensation insurance for this type of labor will shave another 10 grand off the annual bottom line. That means that a decade of status quo and the traditional incremental increases in premiums amount to nearly one million dollars paid by our little company into private, for-profit health insurance carriers.
In the last 25 years, the cost of employer-sponsored health benefits has increased 373%, four times more than cost-of-living expenses, according to the Employment Policy Foundation. Our average annual group policy increase often exceeds 20%, usually higher than the percentage increase of bad debt and charity care. Our average income per household does not exceed $46,000, collectively putting us 300% below the federal poverty level.
If our company were to switch from our current Anthem Blue Choice plan to Dirigo, our costs will level out ˆ no more 20% percent typical annual increase ˆ and our out-of-pocket expenses will be cut by 50% or more for exactly the same comprehensive coverage! We are eagerly waiting for the governor's product to come to fruition.
Dirigo Health is a logical and laudable next step for Maine's health care system. Its innovation will irrefutably invite more small businesses into the market, therefore producing and retaining a healthier labor force and improving the benefits package that every Maine business should be able to offer.
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