For small businesses, a ‘ridiculous’ burden

For small businesses, a ‘ridiculous’ burden

Health costs rise, but reform options leave local owners baffled

Staff Writer, New Jersey Jewish News

The cost of health-care coverage at Sams Clothing in Livingston, which has 15 employees, is going up about 20 percent each year.
The cost of health-care coverage at Sams Clothing in Livingston, which has 15 employees, is going up about 20 percent each year.

The heads of three local family-owned businesses expressed frustration with the rising costs of health care, and confusion over potential solutions.

All provide health-care plans for their employees, and all are looking at massive increases in premiums in the coming year.

“We’re looking at a 32 percent increase in costs for next year,” said David Behrman, president of Behrman House Publishers, located in Springfield. “Our premiums are going way up and I don’t know why. I’d like to know what’s going on.”

With 15 employees, the publisher of Jewish-themed textbooks and other works spends an estimated $50,000-$70,000 per year on health care, contributing 80 percent of the premiums. Employees contribute 20 percent.

“What affects us most directly are premiums,” said Behrman.

Meanwhile, costs at Sams Clothing in Livingston, which has 15 employees, are going up about 20 percent each year.

“There’s something wrong,” said Maurice Cohen, co-owner of Sams with his cousin, Jeffrey Cohen. “Doctors are crying they are not making the money they used to. Premiums are going up; who’s making all the money? Insurance companies must be doing well.”

At the Crystal Plaza in Livingston, which has 100 employees, caterer Allan Janoff said costs are going up “a ridiculous” 18 percent every year.

The current health-care system “is hurting small businesspeople dramatically,” he said. “We can’t pass along a cost increase as quickly as a company like Kellogg’s can by raising cereal prices a nickel a box.”

So what’s a small business to do? Janoff’s company, which he co-owns with his sister, Ronni Janoff Weinstein, reviews their employees’ health-care plan on a yearly basis.

“It takes a long time to get my arms around it. Every year it’s very frustrating to try to understand and figure out all the options,” he said. For the last five to seven years, Crystal Plaza has changed health-care companies every year in an effort to keep costs down. But even that hasn’t worked. “I’ve conceded to a higher copay and maximum to lay out because of escalating costs,” Janoff acknowledged.

At Sams, where the employees are unionized, there are two different plans: one negotiated by the union for most of the employees, and one for the three managers. Maurice Cohen didn’t discuss the details of the employee plan, but the managers, which include him, are shifting to a plan with a high deductible — two to three times what it used to be.

“Our philosophy is to just cover catastrophes and the other things we’ll pay out of pocket,” he said. Three to five years ago, they had a lower deductible plan that covered more, but that’s something the company can no longer afford, he said.

None of the companies will do away with its health plan.

“We believe in that and it’s not expected to change,” said Behrman.

“I think everyone should have health care,” said Janoff, “and there are people in my company who can’t afford it based on the work they do, end of story. They’d go without” if they were not covered by a work-provided plan.

Even at Sams, where the union requires health-care coverage, Maurice Cohen pointed out that being a manager/owner at a local clothing store is not like being at a large corporation.

“Even if the union didn’t require it, I’d want the employees to have health care. I look these people in the eye every day. I’m not Simon Legree,” he said, referring to the cruel slave owner from Uncle Tom’s Cabin. “I’d want to be treated fairly and equitably if I were in their position.”

Each of those interviewed described feeling “confused” about the plans currently under discussion. But they weren’t shy about offering their own prescriptions for a better health-care system.

Behrman wished the conversation would focus on overall costs of the system, rather than just the reimbursement schedule.

“In general, I believe the issue is the overall escalating cost of health care,” he said. He suggested that providing more information to consumers might lead to a solution. “If we could choose doctors based on their success rates, it would encourage physicians to engage in best practices,” he said.

He said he is also interested in finding avenues for physicians that “increase quality and hold down the costs. Perhaps outcome-base compensation.”

Maurice Cohen said he believes too many expensive tests are administered. “I think we’re test-happy. Every doctor wants to put in his two cents and then he gets a piece of the pie,” he said. He’d like to see an “even playing field,” with everyone covered.

“It seems that socialized medicine does work in countries that have it. But I’m not sure we’re set up here for that. I’m just not sure,” Cohen said.

Janoff thinks there should be universal coverage. He expressed feeling, in general, “bewildered, overwhelmed, and frustrated by all the different variables. The process of choosing health-care plans should be less complicated. A lay person should be able to evaluate different plans. And the profits should be spread out more evenly.”

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