14 June 2009

Pay More to Get Less Health Care: Rural Small Biz Realities

While much as been written about the financial burden of health benefits for General Motors and Chrysler retirees, less attention has been given to health insurance for small businesses. Howard Berkes' NPR story on the current situation facing many small businesses, especially in rural America, reminds listeners of an April 2009 research finding by the Center for Rural Affairs that being a small business owner or an employee of a small business were the two biggest factors in predicting non-insurance.

For ranchers and farmers, the problem is perhaps worse because they must depend on individual insurance plans (33 percent of them, according to this report). That same study found that 1/3 of this group depend on individual insurance, which is four times the rate for any other group. Further, among those with insurance, high-deductible policies mean that outlays for health costs -- taking premiums and out of pocket costs together -- are also high for agriculture's small business community. And while this story did not deal with health care access or quality, the number of available practitioners and facilities is also lower in rural areas. It could be said that rural America is paying more to get less health care.

The NPR story is accompanied by an excellent fast-facts table. Perhaps the most significant fact suggests that problem is a larger one than most people think. Fully 25 percent of the U.S. population is defined as rural.

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