For many small businesses, recruiting and retaining talented workers is their biggest challenge. While smaller employers are often noted for higher rates of employee satisfaction and less stress, they can struggle to compete with bigger businesses on compensation and benefits.
That’s especially true when it comes to health insurance, which is a crucial benefit for attracting and retaining workers.
Industry research shows only one in three small businesses in New Hampshire offer health coverage to employees, while it’s nearly universal at larger businesses.
In most cases, small businesses don’t offer coverage because they can’t afford it. According to the National Federation of Independent Business’s “Small Business Problems and Priorities” survey, the cost of health insurance has ranked as the top problem in every edition for nearly 40 years.
Data from the New Hampshire Insurance Division illustrates the toll that higher costs have taken here. The number of workers covered under small business plans has steadily declined as premiums have risen in the past decade, and annual hikes of five to 10 percent keep coming.
Why do health insurance premiums keep going up? The biggest factor is the cost of care, including the ever-increasing cost of prescription medications.
Nationally, prescription drug spending ballooned from $329 billion in 2016 to $806 billion in 2024.
Granite Staters feel the impact of rising drug costs. In a recent NHJournal survey, one in four reported having trouble affording a prescription in the last year. The problem is most acute among younger, working-age people: 34 percent of those 18 to 44 said they had trouble affording medication.
Things aren’t great for those 45 and older either, as one in five had trouble affording their prescribed medication.
In the survey, folks in New Hampshire lay the problem squarely at the feet of pharmaceutical companies. Fifty percent said drug makers are to blame for high drug prices, by far the largest share assigned to any player in the healthcare industry or government.
That’s not too surprising given constant news reports of drug companies making record profits while routinely increasing the price of hundreds of brand-name drugs.
Granite Staters understand that higher drug prices mean higher health insurance costs. More than 90 percent agree policies that increase drug maker profits and cause insurance premiums to go up are unacceptable.
Despite the public’s mood, policymakers too often fail to prioritize health coverage affordability. Many healthcare debates devolve into an elaborate special interest blame game with Big Pharma, big hospitals, and big insurance companies all pointing the finger at each other.
When trying to resolve disputes between the three elephants in the room, policymakers often forget about the hardworking folks – small business owners, employees, entrepreneurs – who actually pay the bills.
Vermont offers an important case study in how losing sight of who pays can quickly go wrong.
In 2023, lawmakers there made it harder for employers and insurers to hold down the cost of very expensive medications known as “physician-administered drugs.” These are drugs that patients cannot administer themselves, like intravenous chemotherapy and other injectable medications.
Where patients receive these drugs has a huge impact on their final cost. Research shows they are nearly twice as expensive in a hospital compared to other sites. Most hospitals charge an enormous markup for their services and medications on those who buy commercial coverage on their own or get it through work.
By taking away control from people who pay the bills, Vermont lawmakers eliminated an important check on Big Pharma’s out-of-control prices and allowed big hospital systems to make already expensive drugs even pricier.
Unsurprisingly, health insurance premiums spiked even higher, and Vermont was forced to backtrack. Earlier this year, it adopted severe limits on the markup that hospitals can charge for physician-administered drugs. That move saved patients nearly $50 million per year.
These unintended consequences cause real-world problems. Higher premiums and deductibles mean fewer people will get coverage, seek care, or maintain treatment regimens.
New Hampshire lawmakers can learn from Vermont’s mistake by prioritizing affordability in every healthcare debate and rejecting special interest demands for mandates and higher costs.
Empowering small businesses and hardworking families to find better, more affordable options is the right prescription.
