what health insurance companies do to small businesses

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http://www.businessweek.com/smallbiz/content/aug2009/sb2009087_865725.htm

Small Biz Purging: When Companies Lose Health Care

When a worker at a small business becomes gravely ill, insurance providers often later dump the company, a practice reforms may not address


Purging: It's an ugly word, and it describes an ugly practice. But Wendell Potter, formerly the director of media relations for CIGNA (CI), says that's exactly what health-insurance companies do when an employee at a small business is unexpectedly hit with a sudden, and expensive, illness: The insurance company "purges" the small company from their rolls.

In June testimony before U.S. Senate Committee on Commerce, Science & Transportation, Potter said health-insurance companies "dump small businesses whose employees' medical claims exceed what insurance underwriters expected. All it takes is one illness or accident among employees at a small business to prompt an insurance company to hike the next year's premiums so high that the employer has to cut benefits, shop for another carrier, or stop offering coverage altogether—leaving workers uninsured. The practice is known in the industry as purging."

Statements from Potter's former boss, CIGNA President David Cordani, bear out Potter's testimony. In a February conference call with analysts, Cordani said: "In 2008 we were essentially actively decreasing our posture in several markets, particularly the under-50 book of business. You could use the term 'purge' if you'd like. You could also use the term 'hard harvests' or 'soft exits.'"

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In the absence of major state or federal policy changes, small companies have little leverage. "All any individual entrepreneur can do is to become more knowledgeable and to take the time to shop around for coverage," advises Amanda Austin, the director of federal public policy at the National Federation of Independent Business. However, President Barack Obama's health-care initiative holds some potential to help level the playing field. The bills now bouncing around Congress all call for the creation of a health-insurance exchange, which, besides offering small businesses more affordable choices, would provide protection against sudden rate hikes. But even this measure might exclude small firms with more than 20 employees. Says Nichols: "I'm very concerned about this. It will leave a lot of small businesses unprotected. The size really should go up to protect all firms that are not big enough to self-insure"—a number Nichols pegs at about 300 employees. But the current proposals leave Biotest and thousands of other similar companies out in the cold.
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health insurance Barons suck

[hobbit709]

1. The only way to fix insurance companies

Is get a rope. Bring out the torches and pitchforks

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2. kicking back to pg. 1

nt

[earthboundmisfit]

3. We must untie health care from employers

Aren't we the only country that ties health care to employment?

[DCKit]

4. Those aren't Obama's "death panels", Sarah. They're the ones we have NOW. n/t