Cost to American Business

    The rising cost of healthcare has a tremendous impact on American business, as the majority of Americans receive their healthcare though employer based coverage.  For many years, American companies attracted workers to their business by offering generous healthcare benefits for both employees and their families.  However, as healthcare expenditures have soared in the recent past, American businesses have been forced to make tough decisions regarding their employees’ coverage.  Those decisions are generally limited to raising prices, raising employee contribution levels to healthcare plans, cutting benefits (if not dropping them completely) or even laying off American workers altogether.

The rising cost of healthcare affects all American businesses both big and small and has become a drag on American companies’ ability to compete in the ever expanding global economy.  Moreover, the employees of companies that suffer from skyrocketing healthcare costs are less likely to receive raises and find themselves ever vulnerable as their employers cut back to remain profitable.  The rising cost of healthcare to American businesses is evident to us all, as healthcare costs have also shifted to the consumers of American products and services.  There is no question that ignoring the rising cost of healthcare is bad for business and in turn the economy as a whole.

• Since 2000, the cost of premiums for employer-based plans has outpaced wage growth by about fivefold. ⁹
• More than half of all small businesses are no longer able to offer health insurance.¹⁰
• General Motors now spends more on healthcare than it does on steel.  The price of each of its cars includes more than $1,500 for healthcare, while Japanese automaker Toyota's healthcare costs only come to about $200 a car.¹¹
• In 2005, GM laid off 25,000 employees citing “runaway health care costs.” ¹²