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July 21, 2009

Small business and rising health care costs

Are you a startup or small business in Maryland? Are you fretting over whether you can afford to extend health care benefits to your employees or just frustrated at the escalating costs?

I'm hoping to talk to you today.

USPIRG, which does public-interest research, released a study today that looks at how small businesses are coping (or not) with health care costs. A couple hundred small companies across the U.S. were surveyed, including 21 in Maryland.

Next to employee salaries, health care costs comprise a huge chunk of overhead for businesses nowadays.

I'm hoping to talk to a few small-biz leaders today to get their side of the story. Feel free to shoot me an email at gus.sentementes(at)baltsun(dot)com.

Or if you just want to sound off -- whether you're an employee or a business owner -- drop a note in the comment section below.

This is an archived version of the technology blog. For updated coverage, see the current baltTech location:
Posted by Gus Sentementes at 9:04 AM | | Comments (2)
Categories: Startups


As a small business owner I have been dismayed to read about the proposal to add a "small business surtax" to the health care reform package, as opposed to a small tax increase for the 2% of the population making over $350,000. We currently pay about 15% of our employee payroll costs on health care. We provide health care for our employees because it makes good business sense to have a healthy workforce and it is the right thing to do. Penalizing business such as our doesn't make sense. I support a government plan because it would provide competion to the current health insurance companies, help to bring down costs, such as administration, expensive procedures, and drugs. This would also relieve some of the burden of health care cost for small businesses and finally bring our country into the 21st century of universal health coverage.

I am the COO of a small Maryland business. I have significant experience in procuring health care coverage for small companies. I am struck by the exorbitant, arbitrary rates that insurance companies charge small businesses. Small group insurance plans are available to companies with under 50 employees at rates that are regulated by the state insurance commission, but the rates of these plans are high and subject to very high annual increases in my experience. Basically, private insurers have taken the path of least resistance and are steamrolling small employers who lack purchasing power and political clout. For my former employer, medical benefits were costly enough (e.g., family coverage rates of $2,500 per month) to cause my last employer to cancel its insurance plan and have employees find their own coverage. At the time, one insurance company middle manager told me that plan terminations are a common event for small employers, for cost reasons. I suppose you can tell where I am going with this: I favor a government insurance plan that will compete with private insurers. To me, it's no surprise that private insurers are lobbying against government health plan proposals, but I'm not sympathetic because private insurers have screwed up.

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About Gus G. Sentementes
Gus G. Sentementes (@gussent on Twitter) has been writing for The Baltimore Sun since 2000. He's covered real estate, business, prisons, and suburban and Baltimore City crime and cops. He was one of the first reporters at The Sun to use multimedia tools and Web applications -- a video camera, an iPhone -- to cover breaking news. He hopes to cover Maryland geeks and the gadgets and Web sites they build, and learn -- and share -- something new every day.

Gus has a wife, a young daughter and two feuding cats. They live in Northeast Baltimore.
This is an archived version of the technology blog. For updated coverage, see the current baltTech location:

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