Small Firms Face Health Insurance Price Increases
Just as the tough economy is starting to really put the squeeze on small businesses, they are facing another financial pinch: Jumps in their health insurance premiums.
Though the cost of health insurance has been a long-running problem for small businesses, their rates had been rising at a slower pace in recent years. No more, the WSJ reports. Employers and insurance brokers in the South, Midwest and California are reporting noticeably steep hikes. Some premium increases being quoted to employers are double those of just a few months ago.
One factor is the beating that investment portfolios of not-for-profit Blue Cross and Blue Shield plans are seeing lately. In recent years, these plans have been under political pressure to provide price breaks. “Now that investment income is significantly less, we could see less concern about an embarrassment of riches and more about battening down the hatches,” says Goldman Sachs analyst Matthew Borsch. Meantime, for-profit insurers have had higher-than-expected medical costs and pricing missteps this year, leading them now to be less flexible with smaller clients.
Tags: blue cross and blue shield, borsch, embarrassment of riches, firms face, goldman sachs, hatches, health insurance, health insurance premiums, insurance brokers, insurance price, investment income, investment portfolios, medical costs, midwest, price breaks, price increases, slower pace, small businesses, squeeze, wsj reports
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