Small business owners to Congress: I liked my health care plan just fine — and now it’s gone


Sen. Mary Landrieu (D-LA), chair of the Senate Small Business and Entrepreneurship Committee, recently introduced a bill that would let more individuals and employers keep their current plans. (Melina Mara/The Washington Post)
November 21, 2013

Individual consumers aren’t the only ones losing their health care plans as a result of new rules in the health care law. Small business owners have had their policies nixed, too.

Some are not too pleased — and several of them made that crystal clear to their elected representatives on Wednesday.

“I was shocked back in September when I received notice from Blue Cross Blue Shield that my health care plan was being cancelled,” Sheila Salter, the sole proprietor behind early2surg, a consulting firm in North Carolina, said during a hearing before members of the Senate Small Business and Entrepreneurship Committee.

She later added, “shocked isn’t even the right word — it’s unacceptable.”

Millions of Americans have started to receive cancellation letters for insurance plans that do not meet new minimum coverage requirements in the Affordable Care Act. The flood of letters prompted the president to apologize last week for his repeated assurances during the legislative process that those who liked their existing plans could keep them under the law.

And while the White House has proposed a fix, which would allow insurers to continue offering discontinued plans for an additional year, several states have said they won’t allow for the last-minute revision.

Due to the cancellations, employers like Drew Greenblatt have been left searching for a new plan to replace the one he liked and lost.

“My old plan was a good, quality product that I liked very much, but we were forced to give it up,” Greenblatt, who owns Marlin Steel Wire Products, a small manufacturing company in Baltimore, Md., wrote in the testimony he submitted during the hearing. “I was repeatedly assured the ACA did not apply to me and that I would be able to keep my plan – that is simply not my experience.”

Instead, Greenblatt was left hunting for a new plan. And the one he eventually selected comes with several new benefits he didn’t want and a 10 percent increase in his premiums.

“The costs have gone up despite all the promises our prices would go down,” he said, noting that the launch of his state’s small business insurance exchange has been pushed back to April, leaving him without options he was told would be cheaper than what is currently offered.

In Colorado, the state-run small business exchange is up and running, but it has not delivered the benefits David Allen was expecting. His company, too, recently received a notice from his insurance company that it could no longer offer his existing health care plan, which had allowed him to cut costs by covering only generic drugs.

New plans he eventually found on the exchange (after several hours trying to create and account, he said) all cover brand name drugs, and each had deductibles that were at least double the $750 annual deductible his employees paid under his old plan.

“In short, the only way we can markedly reduce the cost of our health insurance through the state exchange is to select a policy with a dramatically higher deductible, thus shifting the financial burden from me to my employees,” Allen told lawmakers, noting that he has “consciously chosen not to pursue high deductible plans in the past because of the financial strain that it would create for my employees.”

Paul Crowley finds himself in the same boat. The owner of InfinaDyne, a small software company in Davenport, Iowa, Crowley says his employees have all received cancellation notices from Blue Cross Blue Shield because their plan does not meet the new standards.

“As we begin to look at replacement policies, we see that both monthly costs and out of pocket expenses will both skyrocket,” Crowley recently wrote to the House Small Business Committee in a letter posted online. “I will have to cap my contribution and pass all extra burden on to the employee. This will definitely hurt every one of them.”

Salter, the entrepreneur from North Carolina, has no employees, but that doesn’t mean losing her current plan is any less devastating to her self-made company.

She had intended to start expanding and creating jobs in the near future, but she says the added costs of her new plan will put those plans on the backburner. Her insurer has told her that a sufficient plan will now cost around $7,000 a year, nearly triple the $2,400 she has been paying.

Like the other small-business owners on the panel, her new plan will include benefits like maternity care and substance abuse that she says she doesn’t need — at least for now.

“I have no history of alcohol or drug abuse... yet,” Salter said. “But this is driving me to drink.”

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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