Small businesses paring back health insurance plans to counter escalating premium costs

Small firms scrapping, scaling back health plans

JEFFERSON CITY, Mo. — Small businesses across the country are dropping or scaling back employee health care plans because of the rising cost of insurance.

The health insurance crunch has hit small businesses particularly hard because they lack the leverage of their bigger counterparts to negotiate with insurers. So when insurance rates rise, they often respond by asking employees to make higher co-payments, raising deductibles, switching to less generous benefits or simply dropping their coverage.

In recent weeks, small business owners have pleaded their case to the White House and Congress. Top Democrats in both the House and Senate have said they are looking into how health insurers price their policies for small businesses. And lawmakers have proposed a variety of insurance rating changes, mandates and tax breaks to try to control costs.