In her commentary Deborah Cook, executive director of the Maine Small Business Alliance, discusses Dirigo Health from the viewpoint of small businesses, whose employees and families, along with the self-employed, represent the largest proportion of uninsured in Maine’s population. She notes that rising costs of health care and insurance are a major threat to the viability of small businesses

Cook, Deborah

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University of Maine

Maine Policy ReviewVolume 12 | Issue 32003Dirigo Health: A Small Business PerspectiveDeborah CookMaine Small Business AllianceFollow this and additional works at: https://digitalcommons.library.umaine.edu/mprPart of the Health and Medical Administration Commons, Health Policy Commons, and theInsurance CommonsThis Commentary is brought to you for free and open access by DigitalCommons@UMaine.Recommended CitationCook, Deborah. "Dirigo Health: A Small Business Perspective." Maine Policy Review 12.3 (2003) : 26 -27,https://digitalcommons.library.umaine.edu/mpr/vol12/iss3/6.26 ·  MAINE POLICY REVIEW  ·  Winter 2003 View current & previous issues of MPR at: www.umaine.edu/mcsc/mpr.htmCOMMENTARYDirigo Health: A Small BusinessPerspectiveBy Deborah CookMaine’s small business owners andemployees are waiting anxiously for theintroduction of the Dirigo Health product.They have heard a lot about it both fromthose who are supportive of the reformeffort and from those who are not. Nowthey look forward to seeing the details.Anxious to find affordable insurancecoverage for themselves and their employees,Maine business owners are hopeful thatDirigo Health will be the package thatprovides reasonable coverage and an afford-able and stable premium they can count on.If, at the same time, they can help DirigoHealth achieve the larger goal of reducingcosts, increasing access and ensuring qualitycare, all the better.The Maine Small Business Alliance is a membership organization of ownersof small businesses from across Mainewho are interested in public policies thatare good for their business, good for theiremployees and good for their communi-ties. Our members believe that offeringinsurance to employees extends beyondthe fact that it is a good business decisionand increases their competitiveness toattract and retain the highest qualityemployees. They believe that it is simplythe right and ethical choice to provideworkers with health security and theability to continue to provide financiallyfor themselves and their families.To understand the impact that DirigoHealth reform will have, it is helpful tofirst understand the impact and value of the small business economy in Maine.Maine is a state of small business. Of43,000 registered business firms here,more than 95% have fewer than 50employees. An additional 58,000 ofMainers are self-employed in non-incor-porated business. Of Maine’s totalemployment force of 624,000, about halfare self-employed or employed in a smallbusiness. These small businesses, withfewer than 50 employees, are the firsttarget market for the emerging DirigoHealth product and will be, with theirfamilies, among the first to benefit directlyfrom this reform effort.Of the roughly 140,000 uninsuredMainers, 73% work in small businesses or are self-employed. While the escalatingcost of health insurance is a state andnational problem, it has reached a crisislevel for small businesses. Smaller compa-nies pay on average 35% more than largeemployers for the exact same healthcoverage and most have neither the time nor the staff resources to navigatethrough an increasingly complex healthcare system. If we want to insure more people, we must make health care affordable forsmall employers and accessible to theiremployees. Small businesses are moreseverely affected than are large employerswhen their employees or employees’ families are sick. For the small business,the cost of lost time due to illness or accident is not only a productivity issue,but can also be an issue of the business’survivability. In a small business, with noready replacement for an absent employeeor owner, time lost is often lost for good.Billable hours are gone. Projects cannot becompleted on time. Good health, qualityhealth care and the ability to recover fromillness and accident are essential to smallbusinesses, their owners, their employees,their families and the customers andcommunities they serve. In 2000, the Maine Center forEconomic Policy surveyed Maine’s smallbusinesses about health insurance. Forty-three percent of the businesses said thatthey would drop coverage if premiums rose11-20%. Another 21% planned to dropcoverage if premiums increased as little as10%. Since 2000, insurance rates forMaine’s small businesses have soared 49%. What are Maine’s small businessesdoing? Some are dropping coveragebecause they face a choice of offeringinsurance or staying in business. Some are reducing coverage to the bare bones in order to keep the cost down. Some areincreasing their employees’ share of thecost and letting the employees decidewhether to keep coverage. One small business I spoke withrecently lost a skilled employee who hadbeen with the company for years but whohad to make the hard choice betweeninsuring his growing family or stayingwith the company. He left the companyand the state for another similar positionwith better insurance coverage. Anothersmall business I visited agonized overkeeping its coverage affordable so thatenough employees would join the groupplan, thereby ensuring that the plan stayed in effect for everyone else in thesmall company. Through careful and time-consuming negotiations with theirinsurance broker, they were able to find aplan that they and their employees couldlive with. Still, they face an increase incost that will necessitate an increase in the price of their product.As always, Maine’s small businesseshave been resourceful in their efforts tokeep their businesses profitable and theiremployees productive. Maine’s small busi-C O M M E N T A R YView current & previous issues of MPR at: www.umaine.edu/mcsc/mpr.htm Winter 2003  ·  MAINE POLICY REVIEW  ·  27COMMENTARYnesses know that healthy employees areproductive employees and that healthyfamilies mean less employee time away to attend to an illness at home. Implicit in the Dirigo Health reformeffort is an opportunity to do more than simply seek the lowest premium. In addition to finding cost-effective ways to insure small businesses and theiremployees, Dirigo Health can heighten our awareness of the connection ofhealthy choices and healthy environmentsto overall health care costs. If the smallbusiness community in Maine encourageshealth and wellness in their work environ-ments, they can not only improve theirown productivity, but also at the sametime enhance the reform objectives ofDirigo Health. The 330,000 people whoare employed by small businesses andtheir families make up close to half thestate’s total population. Small businesses in Maine are the right place to start forDirigo Health and can help lead the statetoward a successful reform effort.Small businesses in Maine know thevalue of ingenuity, frugality and persistencein creating solutions to problems. Theypractice every day. The members of theMaine Small Business Alliance are eager to see what Dirigo Health brings. Weapplaud the governor and the legislaturefor taking this very important first steptoward reform and look forward to con-tinuing to raise the large voice of smallbusiness throughout the process.  C O M M E N T A R YDeborah Cook is executivedirector of the Maine SmallBusiness Alliance, a non-partisan,non-profit membership organiza-tion dedicated to championingsmall business interests in thelegislative and policymakingprocess. She has over 20 years of experience in public policy with Maine’s non-profit and smallbusiness communities.

Dirigo Health: A Small Business Perspective

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Dirigo Health: A Small Business Perspective

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