We just got our health insurance renewal in the mail. We knew there would be a price increase…there always is.
As self-employed small business owners, my husband and I have to buy private health insurance. This year’s increase? A whopping 13 percent!
What does that mean in reality? For us, it means digging a little deeper in our pockets to come up with the increased monthly premium. Luckily, we can afford it. Many small biz owners cannot.
Let’s play this out with some real-life numbers. In six years, at the given increase rate, our health insurance premium will have doubled. Instead of $700 a month, it will be over $1,400 a month — equal to an additional house mortgage payment.
And that’s if we don’t get sick. If we get sick, it’s possible that our premiums could skyrocket.
Most mature businesses would be hard-pressed to double their revenues every 6 years in order to keep up with increasing health insurance premium costs for the owners and their employees, without radically changing their business model. For many service providers, it would mean either doubling the amount of billable hours you work each week, increasing your own prices, or cutting back on expenses elsewhere. Or dropping your health insurance coverage completely.
Yes, I could increase revenue by hiring other small business coaches to work for Passion For Business, but that’s not a business model I’m interested in persuing. So does increased insurance premiums force small business owners to either change their business model against their will or go out of business? I believe the answer is “yes” more often than we’d like.
I’m not here to argue politics or health care reform. I’m here to paint a simple picture of what massive health insurance costs are doing to people like me: self-employed small business owners.