05/11/2004
Testimony of NFIB/Pennsylvania Member Olie Ericksen in front of the Senate Banking and Insurance Committee
Mr. Chairman, members of the committee, good morning. My name is Olie Ericksen. I am the owner of Olie M. Ericksen, Inc., a company in Mercer County that repairs jet engines for the railroad.
Thank you for inviting me to appear before your committee today to talk with you about the difficulties small-business owners face in providing health insurance plans for their employees -- a top concern for all who own or work for a small business. I specifically want to express my opposition to additional mandates like those proposed in Senate Bill 495 as they would likely make health insurance plans even more expensive.
I am also pleased to be here today on behalf of the National Federation of Independent Business (NFIB) representing the many small-businesses members who face similar health insurance challenges.
My father started Olie M. Ericksen, Inc. in the mid 1970s, and today my employees and I repair jet engines that are used to blow snow from switches in railroad concentration yards.
For years, the high costs of health care, along with rising insurance premiums, have been the top concerns of small-business owners across Pennsylvania. In fact, a recent NFIB member survey found that many Pennsylvania small businesses have experienced steep increases in health insurance premium costs ranging from 20 to 50 percent. Unfortunately, these high costs have made health-care insurance unaffordable to many businesses and have forced many others to drop coverage for their employees.
My company is one that has not been able to offer health care as an employee benefit because of high premiums. Each time I have priced health-care plans I’ve found the premiums to be even more expensive. The choice is to layoff a worker in order to purchase health insurance for the other workers.
Now Senate Bill 495 proposes to mandate coverage for colorectal cancer screening. I understand the importance of colorectal screening. But I think that the cost of this new mandate will cause premiums to rise even higher. Higher premiums will make it even more difficult for employers like me to ever provide insurance coverage for our employees. I am sure that this was not the intention of Senate Bill 495 when it was written but it will be the result.
According to the Centers for Disease Control, colorectal cancer screening rates are particularly low among people who do not have health insurance, people with no usual source of healthcare and people who reported no doctor’s visits within the proceeding year. If more small businesses drop their insurance coverage because of rising premium mandates like in Senate Bill 495, it could actually lead to fewer screenings and higher rates of colorectal cancer incidents.
Year after year we see health-care costs increase. I don’t believe the insurance companies and the rest of the health-care industry have justified these cost increases. Both sectors seem to be booming. Their executives are paid high salaries; in some cases record profits have been announced and some companies are reporting billions of dollars held in reserves. Why can’t some of this money be used to reduce premiums for small businesses who pay these high premiums? With double digit increases every year, it’s clear to me that the system is broken.
If Blue Cross insured 88 million people last year and claims to have lost $95 million dollars, should this justify double digit increases? A 5-dollar increase to each person would be $440 million dollars.
There are already too many people in the U.S. and Pennsylvania who do not have health insurance. According to NFIB, 43 million people across the U.S. and 1 million people in Pennsylvania are uninsured. Sixty percent of the uninsured are tied in some way to small business. Additional mandates like those in Senate Bill 495 likely would result on higher premiums and just add to this problem.
This bill and similar bills that contain mandates do nothing to help me or the many other business owners like me across Pennsylvania who cannot afford to provide health insurance for their employees. Small-business owners and employees need relief in the form of lower insurance premiums. I ask you to seriously consider ways to achieve this goal.
Thank you Mr. Chairman for allowing me to discuss this important issue with you and the other members of the committee.
