Small Business Owner Testimony for Single Payer Healthcare

by: Grace Kelly

Mon Mar 02, 2009 at 10:20:10 AM CST

One of the reasons I have been reluctant to hire additional employees is the fact that I would then be forced to choose between further reducing the health benefits my siblings and I currently have, and finding the money to cover the additional cost of insuring an employee that might easily cost $15,000 or more depending on their age and family situation. Neither choice looks palatable, and there is no doubt in my mind that my company's health care premiums are the primary reason preventing me from hiring an additional employee.

I wouldn't mind paying these costs so much if my investment were buying a health care system that created healthier, longer-lived people. But when I read that, in overall life expectancy, the United States ranks #37, behind not only Canada, Australia, New Zealand, Japan and all the countries of Western Europe, but also behind Costa Rica and South Korea AND then I read that the US spends twice as much money per capita on health care as any of these countries, I am left to wonder what I am getting for my money. The life expectancy of a person born in Japan is 82 years, in the U.S. it is 78. At my age of 60, those 4 years are starting to look statistically significant.

It also bothers me when I read that the CEOs of our larger insurers, pharmaceutical companies, and medical device companies earn tens of millions of dollars a year. Those are my premiums paying those salaries and I don't understand how that is not breaking trust between business and society... clearly, regulation is in order. While there is no doubt that the current CEO of United Health Group is not being paid $125 million a year as was the case in 2005, his is only the most egregious example of a system gone bad. The health insurance industry may be generating huge profits, but it is strangling the rest of the economy and preventing small companies like mine from growing.

In my opinion, we need a single payer, universal health care system. Medical care exists to improve the quality and quantity of life. Our insurers and the medical system as a whole have weighted too heavily the need for generating profit... and are crippling the growth of all other business sectors in Minnesota as a result. I think it is time that as representatives of all the people of Minnesota you correct that imbalance. If you are serious about helping businesses and putting people to work, addressing the health care issue is one of the best ways to do it. A vote for single payer, universal health care coverage will result in a Minnesota that has healthier people, healthier businesses, and a healthier economy.

My name is Bob Ciernia. I live in Northfield and am the owner and President of a publishing company that employs five people in Minnesota and one person in Massachusetts. We write and publish booklets on job-seeking, family issues, parenting, substance abuse and domestic violence. In the early years of the company our primary markets were schools and public libraries. Today, family service centers in the military, state one-stop career centers, and a variety of public and private mental health agencies comprise our customer base.

I graduated from St. John's in Collegeville in 1970, served in the Army, and got a Masters in Teaching from the University of New Hampshire. I taught English for several years at the junior high level and then ran a program for high school drop-outs where I met my business partners and started our company on Boston's South Shore.

I am here today at the invitation of Representative Bly to share my experience as a small business owner regarding the effect of health care costs on my business. So that I could share accurate numbers with you, I took the time to dig out the various folders labeled "Health Insurance" going back to 1993 and my return to Minnesota. I'd like to share that information with you.

My company started in 1979 in Massachusetts. In 1993, I bought the company from my partners and moved it to Northfield to be closer to my family, all of whom then lived in the metro area. When we moved I belonged to the National Association of Quick Printers and, as a member of that group, the premium for my family of two adults and two children was $421/month.

In August 1994 we joined the Minnesota Employees Insurance Program, a partnership between private sector insurers and the State of Minnesota designed to provide health insurance to small businesses. Basically, I joined a large group of other small businesses and benefited from that collective buying power. Our monthly premium dropped to $355 a month, a significant savings at the time. Within the year, my wife started working for the company and that saved the company the health premiums I would otherwise have paid an unrelated employee.

The Minnesota Employees Insurance Program came to an end in 1997 and Health Partners was the insurer we chose to replace it. When I called to ask why the program was ending, my recollection is that I was told "it was no longer necessary. Rates were quite competitive."

At that point, our policy called for a $20 co-pay but there was no deductible and it was 100% coverage. As the company grew, my personal philosophy was that what is a worthwhile benefit for an owner is an equally worthwhile benefit for an employee. And since one of my new employees was also a brother, that was not a difficult decision. In January of 1998, there were three families insured by the company, each family consisting of two adults and two children. The cost for that coverage was $358 a month for each family, totaling a little under $1100 a month.

Five years later, in January of 2003, a second brother came to work for the company. We still had a $20 co-pay, no deductible, and 100% coverage but my own family's insurance had doubled to $730/month and the cost of insuring three families was $2,300 a month.

With each successive year since then, my business has seen significant increases in premiums and significant reductions in benefits. This year, my company covers three families in Minnesota. Children over the age of 18 are not covered by my plan. The plan covers 6 adults, and two children. We no longer have a co-pay but we have a $2,750 deductible for each person in the plan, up to a maximum of $5500 per family. To cover these 8 people, the cost to the company is $4,300 a month. Two sets of parents have chosen to cover 4 children over the age of 18 at an additional cost of $847 a month, bringing the cost of health insurance to $5139! PER MONTH. That's over $60,000 a year to cover 12 people... to which you might add $16,500 in deductibles paid by our families.

In 1997, I was a 48 year old who paid $355 a month for my family of four with zero deductible. Twelve years later in 2009, my 48 year old sister-in-law represents a cost of $377 a month just for herself... and remember that she has a personal deductible of $2750 annually.

If my sister-in-law and spouse were unrelated employees whose families consisted of a spouse and two children under the age of 18, and we kept the same coverage we have now, my company's insurance cost would rise to $100,000 a year.

By comparison with other countries, we know the private market health insurance is doubling the cost of healthcare. The market health insurers really want to hide that. They actually testified the cost of insurance was only 10%, which is a lie. They only want to say health care costs are going up.

Here is the point. Heathcare care costs are going up, yet why would we would want to burden necessary health care with private market health insurance that just wastes health care dollars and actually harms people? I want every dollar of health care money to actually go for health care!