Wednesday, September 30, 2009
Medical Insurance and a Small Business
I need to tell you my story about my running of a small business (27 employee law firm) and medical insurance. For years I insured my employees (and their families) with Blue Cross of Michigan. On the average the cost of doing so was fourteen thousand dollars a month, a tidy sum. We didn't have any frills with this policy as my thought was simply to provide disaster insurance to my employees as well as my own family. There was no dental, office visits, eyeglass, etc., you get the idea. What I provided was basic insurance with a healthy deductible ($500). In the middle of all this, I hired a young lawyer who had a history of low back problems (don't we all)? About two years after he started with us, he had a severe episode of back pain which required extensive surgery. The cost of this was ninety two thousand dollars ($92,000). How do I know that? Because I paid for it because Blue Cross refused to cover this expense because the young man had a pre-existing condition. My reasons for doing so were humanitarian, purely and simply. If I did not pay, the young man and his family faced financial ruin. Of course the financial impact on the firm was tremendous and this situation caused us to alter the way we did business when it came to hiring new employees. Preference in hiring was given to those who had spouses in a work place which already provided health insurance to my prospective employee, not the kind of consideration one wants to admit, but nevertheless a consideration. At the time, we were not supposed to even ask if someone was married or not, but the dynamics of hiring interviews is such that people do volunteer a certain amount of information. The net result, I am embarrassed to admit, was that uninsured and uninsurable potential employees also became unemployable, an altogether too-frequent decision. From my reading regarding the failure of the public option to pass yesterday, this cutthroat analysis by private insurance companies will be allowed to continue and flourish in an indirect manner, i.e. by increasing costs across the board in a non-competitive environment in which the emphasis of the insurance carrier is on making profits, not providing quality medical care.