Small and medium-size companies tend to be unwilling to provide health coverage to their employees because it is too pricey, according to a study by the Kaiser Family Foundation and the American Hospital Association's Health Research and Educational Trust. The percentage of smaller firms (less than 200 employees) that offer health coverage has remained stagnant over the last three years at 60%. These trends are disturbing because of the strong economy. Experts worry that if we can't expand coverage in a healthy economy, we never will.
The failure of small and medium-sized companies to provide coverage is a major contributor to the swelling number of uninsured Americans, which jumped to 44 million in 1998 from 39 million in 1994. Employers contend the price tag for health insurance is too high and smaller employers are hit the hardest. For instance, small companies that do provide coverage saw their premiums increase 6.9%, compared with a 2.1% rise among large employers, according to the study. And health insurance premiums for all employers increased an average of 4.8% in 1999, the highest increase since 1994.
The study is based on a survey of 1,934 public and private employers.
(American Hospital Association, Alicia Mitchell, 202/626-2339)