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QUOTATION: People often say that, in a democracy, decisions are made by a majority of the people. Of course, that is not true. Decisions are made by a majority of those who make themselves heard and who vote - a very different thing. - Walter H. Judd

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2004-08-22 - 3:40 p.m.

Health Care Benefits - a Major Issue

I can attest to the fact that rising health care benefits could be a factor in loss of full time jobs and and even outsourcing of jobs. Just this year with a business slowdown caused by 9/11 and new immigration red tape, my husband had to reevaluate the cost of health care for his office manager and our family. The premiums were a staggering $24,000 a year with Blue Cross, even though my primary provider was Medicare with just supplementary policy paid for by the business. (After switching to an HMO and a supplementary Blue Cross policy, the premiums were cut in half, but still $12,000 a year.) Hiring another full-time employee with requisite benefits would definitely cause hardship. Just as the article,"Rising Cost of Health Benefits Cited as Factor in Slump of Jobs," by Eduardo Porter, states, many small businesses must also be feeling that crunch…and, in fact, apparently large businesses, too. Another reason for outsourcing, I suspect.

A relentless rise in the cost of employee health insurance has become a significant factor in the employment slump, as the labor market adds only a trickle of new jobs each month despite nearly three years of uninterrupted economic growth.

Government data, industry surveys and interviews with employers big and small indicate that many businesses remain reluctant to hire full-time employees because health insurance, which now costs the nation's employers an average of about $3,000 a year for each worker, has become one of the fastest-growing costs for companies. Health premiums are sapping corporate balance sheets even more than the rising cost of energy.

… Because of the cost of health insurance, "we are making decisions not to hire people," said Steve Hayes, the owner of Custom Electronics in Falmouth, Me., which installs electronic systems like home theaters and communications networks in homes and offices. "Before, we hired based

on workload," he added. "Now it's a question of affordability."

Mr. Hayes said his health insurance premiums had risen by 22 percent a year in the last four years. He now pays $4,150 a month in health insurance premiums for his 33 employees, and the workers contribute an equal amount from their own pockets. The company's revenue - less than $5 million annually - has been growing briskly, he said, but outlays for health benefits are growing even faster, eating into the company's profits.

The increase in health insurance premiums reflects the rising cost of health care, which is being driven by expensive new drugs, many of them heavily advertised to consumers; medical advances including diagnostic tests that require costly new machines; and a reaction to past restrictions in managed care health plans that sought to rein in costs.

Both candidates have proposed measures for tackling the high cost of health insurance. Instead of this incessant squabbling about war/draft dodging of thirty years ago, I'd like to hear more specifics of their plans and how they propose to pay for it. President Bush has had three years to come up with something. I'm unconvinced that he would do anything during another four years. Promises! Promises!

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