Testimony to Senate Health and Welfare Committee

Testimony to Senate Health and Welfare Committee

Daniel Barlow, Public Policy Manager

Vermont Businesses for Social Responsibility

Feb. 10, 2011

Vermont Businesses for Social Responsibility supports health care reform and the bills – H.202 and S.57 - before this committee. The employer-based insurance system is disintegrating and is unsustainable.

Our organization represents more than 1,200 businesses in Vermont. We survey our members every year and we consistently hear back that the biggest obstacle to the success of their business is the cost of health insurance. It outranked state and local taxes, access to capitol and permitting issues.

This is the landscape of the employer-based insurance system over the last 5 years, according to our members:

·  Health insurance is getting more expensive for businesses: 61% of VBSR businesses that offer health insurance pay more than the equivalent of 10% of their payroll. And 20% pay more than 20%.

·  Employers are asking workers to pay more too: 28% have increased employee contributions over the last five years

Earlier this month, VBSR held a press conference with more than a dozen business leaders who support this bill. They represented businesses big and small across the state, from high-tech manufacturing facilities to sole proprietors.

I wanted to share some of their statements with you tonight.

The first story is from Betsy Allen-Pennebaker. She and her husband own two businesses – Vermont Design Works and Onion River Company Property Management.

Vermont Design Works, her web design company, pays for the health insurance for its employees. But one of their competitors in the area does not and their employees are on Catamount.

Here’s what she told us:

Here’s the really unfair thing. The company down the hall is expanding faster than we are…and it’s in part because its costs per employee are lower. And our taxes are helping to pay for health insurance for our competitor’s employees, while we have to keep paying the more expensive private premiums. That is not the free market. That is a completely non-level playing field.

Bram Kleppner is the CEO of Danforth Pewter and employees about 45 Vermonters. This is what he had to say about our current system and the system that this bill will bring us to:

Earlier this week, I very regretfully had to lay off two employees. Both young women, both the only access their families had to health insurance, one with a two-year-old boy who has heart and lung issues that require ongoing medical care. The little boy’s care cost almost a million dollars last year. The pain and fear that this hardworking, dedicated employee felt, the terror she went through when she learned that she was losing her job and her health insurance, is something no one should ever have to go through, and single payer health care will ensure that no Vermonter ever has to go through that again.

Last night I was at a health care event at the Unitarian Church downtown. It was organized by Vermonter Interfaith Action and featured Vermonters of all different religious and spiritual backgrounds discussing their problems with the current system and their hopes for the system you are creating here.

One of the speakers that night was Rob Kasow. He and his wife, Claire Benedict, own BearPond Books and Rivendell Books here in downtown Montpelier. They just expanded last year, opening up a third location at the Berlin Mall.

Rob told me that when he started opening up retail businesses 20 years ago he could afford to pay the insurance costs for all his employees. Today his stores employ about 24 people, a mix of part and full time.

Can you guess how many of his employees get health insurance through his business? Two. He wants to offer insurance, because that’s the right thing to do in the system we have right now, but it doesn’t work for him. He said he doesn’t know how much longer he can even afford to pay for those two employees.

VBSR has long believed that health insurance needs to be de-coupled from employment. This system has become an economic ball and chain around the ankles of our businesses and we believe transitioning to the system envisioned in the bill is an economic opportunity for Vermont.

Thank you for your time tonight. I appreciate the hard work this committee and your counterparts in the House have put in over the last few months. It’s important and courageous work.