Another advantage for the big
The burden of health insurance, at least in the US, is set up to favor big companies at the expense of small ones. That's according to an article in the New York Times called "Tackling the High Cost of Health Benefits" (8/26/2004).
That article traces the difficulty small employers have in providing adequate health insurance to their employees. In our screwed-up system, rising insurance and health care costs are a problem for all employers (except for the growing number that provide no care at all). But as with so many things, the system is rigged to favor big corporations, according to the article.
Small businesses do seem to be bearing the brunt of the problem. According to a study by the Kaiser Family Foundation and the Health Research and Educational Trust, health care premiums for businesses with fewer than 200 workers climbed 15.5 percent last year, compared with 13.2 percent for larger companies. On average, small-business owners spent $3,432 on insurance for each employee in 2003, compared with $3,360 for bigger companies. And the smaller the firm, the more it pays, especially if it has a high proportion of older or female workers.
The reasons for the lower rates for big companies are several: "They have more negotiating power, they can weather rate increases better and they can become their own insurers, a move that gains them tax advantages and the flexibility to offer a host of plans."
Furthermore, big insurance companies are set up to deal easily with big clients with whom they can make better-informed estimates and minimize risks. As ever, thsoe who can afford the most, get to pay the least. All of this has to make smaller businesses more willing to be absorbed into larger companies, where insurance costs represent a far smaller part of the budget.
