Small business: The hunt for affordable health insurance

"For entrepreneurs trying to start or run a business, the obstacles are huge. But few loom as large as one: health care," the Wall Street Journal reports. "At some businesses, in fact, health care is the highest expense after salaries - with devastating consequences.

Owners must skimp on vital investments like marketing and research. Some can't hire the people they want because top candidates demand premium coverage. Or they end up understaffed because of the high cost of insurance - and lose potential clients as a result. At the same time, to keep costs in check, countless companies are slashing coverage or dropping it entirely. Some are turning to freelancers or offshore workers instead of hiring full-timers and locals. And some would-be entrepreneurs find insurance so onerous that they're not even starting a business in the first place."

"Historically, small businesses have boosted recoveries significantly" because they "must take risks to survive - like investing in innovative ideas and hiring more workers to implement them. But stratospheric heal-care costs threaten to damp that enthusiasm and choke off investment." Congress is still debating what reform will do for small companies, but "President Obama has implied that any kind of employer mandate to pay for coverage would exclude small businesses." And "some members of Congress, mindful that small businesses employ the majority of Americans and lots of their constituents, are pushing for programs that will let small businesses join cooperatives that could use their size to spread risk and negotiate costs down, like bigger businesses" (Covel, 7/13).

NPR followed up on small business owner Larry Harbour from Nebraska who "couldn't afford health insurance because premiums would cost him $24,000 to $40,000 a year." Harbour was profiled in an NPR story last month. But in a second story, Brian Urban, a local insurance broker and the Nebraska legislative chairman for the National Association of Health Underwriters, offered to help. "It's my job to make sure as many people are as insured as possible," says Urban. He adds that "We're not opposed to reform… It's just that we want to make sure we're dealing with real-life facts and numbers and we focus that reform in the areas it's truly needed." Urban "conducted a market analysis for Harbour and his wife," and found a plan with a premium of $2,400 a year. "Harbour says it sounds affordable, but he still has a lot of questions."

"Harbour had never heard of health insurance brokers like Urban. Even if he had, Urban says, he'd probably have little idea of how to find one." But "even if Harbour had taken that step, he'd still be wary." And "Urban understands the skepticism. He recommends independent brokers and agents not tied to specific insurance companies and plans. It's also smart to comparison shop, he says, for insurance plans and for brokers and agents." Urban says Harbour is fairly typical of the individuals he speaks to, especially if they're new to the individual insurance market" (Berkes, 7/12).