Health Insurance Costs: A 'Critical' Problem for Small Business
May 25 2004 - 9:30AM
PR Newswire (US)
Health Insurance Costs: A 'Critical' Problem for Small Business
Concerns Over Health-Care Costs Ranks Highest Ever in New
NFIB/Wells Fargo Survey SAN FRANCISCO, May 25
/PRNewswire-FirstCall/ -- Health insurance, liability insurance and
workers' compensation are the top three problems facing America's
small-business owners, according to a comprehensive study released
today by the NFIB Research Foundation and Wells Fargo. The sixth
edition of Small-Business Problems & Priorities, co-sponsored
by NFIB and Wells Fargo, measures which aspects of running a
business are most problematic for small-business owners. While
"health-care costs" retained the same top ranking that it has held
since 1986, the number of respondents citing the issue as
"critical" (the most severe rating possible), spiked dramatically.
In 2000, 47 percent of those surveyed cited health-care costs as a
"critical" problem. In 2004, two-thirds of respondents listed
health-care costs as a "critical" problem, an 18 percentage-point
increase over a four-year period. "While there might be some
disagreement amongst small-business owners about many problems, the
cost of health care is a critical concern that is prevalent across
all regions, industries and businesses of all ages," said
Foundation Senior Research Fellow Bruce D. Phillips. "Regardless of
whether the business currently offers insurance and is worried
about increased costs, or the business wants to offer health
insurance but can't afford it, the increasing cost of health care
is having a significant effect on small-business owners. No other
single problem can touch health-care costs in terms of either the
unanimity or intensity of concern it generates among small-business
owners." "While small-business owners are gradually becoming more
confident as the economy strengthens, these survey results
illustrate there are still some very real concerns," said Rebecca
Macieira-Kaufmann, small business segment manager for Wells Fargo.
"Today's small-business owners are balancing longstanding systemic
issues like health care with newer concerns like identify theft.
This reflects just how challenging the economic landscape can be,
and underlines why it is so important that we continue investing in
research and solutions to better understand the issues confronted
by small-business owners and how to help address them." Five of the
top 10 problems worrying small-business owners appeared in the
"costs" cluster. In addition to health insurance, these included
the cost and availability of liability insurance, workers'
compensation costs, energy costs (natural gas, gasoline, propane
diesel and fuel oil) and electricity rates. While health care was a
unifying concern across the board, many problems facing
small-business owners differed based upon geographic region and
industry. For example, the ability to "cost-effectively advertise"
ranked 24th overall but ranked higher for firms in the finance and
trade industries, and for those owners who sell to one or two
firms. Likewise, small-business owners are less concerned about
so-called "hot button" political issues receiving greater attention
this political season. Small-business owners cited "exporting my
products/services" and "competition from imported goods," as the
tenth and sixth least severe problems on the survey. "This year's
list makes it pretty clear that many of small-business owners' most
serious problems are politically generated, rather than spawned
from free-market competition," Phillips noted. "Small-business
owners consider the daily burdens of health-care costs, taxation
and regulation far more difficult to deal with than what candidates
are discussing on the evening news. Their most vexing challenges
are worries about unfunded and unnecessary mandates that stifle
growth and keep small businesses from doing what they do best --
moving our economy forward." The latest Small-Business Problems
& Priorities report is based on responses to a mail survey
circulated in the first three months of this year. Responses were
collected from 4,603 small-business owners nationwide. Respondents
rated each of 75 possible business problems on a scale of 1 to 7,
with 1 indicating a "critical" problem and 7 indicating "not a
problem." Problems are ranked according to the average rating
received. Respondent information was broken down by a number of
different variables including industry sector, geography, number of
employees, annual sales change over the last three years, and
number of years in ownership. Copies of the survey are available to
members of the media upon request. For more information about the
latest Small-Business Problems & Priorities, contact NFIB media
department at 202-554-9000. The National Federation of Independent
Business (NFIB) is the nation's largest small-business advocacy
group. A nonprofit, nonpartisan organization founded in 1943, NFIB
represents the consensus views of its 600,000 members in Washington
and all 50 state capitals. For more information on NFIB visit
http://www.nfib.com/. NFIB's 2004 National Small Business Summit
will be held June 16-18 in Washington, D.C. More information is
available on-line at http://www.nfib.com/summit. Wells Fargo &
Company is a diversified financial services company with $397
billion in assets, providing banking, insurance, investments,
mortgage and consumer finance from more than 5,900 stores and the
Internet (wellsfargo.com) across North America and elsewhere
internationally. Wells Fargo Bank, N.A. is the only "Aaa"-rated
bank in the United States. Visit Wells Fargo at
http://www.wellsfargo.com/ Providing financial products and
services to more than one million businesses with annual sales up
to $20 million in all 50 states, Puerto Rico and Canada, Wells
Fargo is the #1 lender to small businesses in the United States in
total dollar volume according to 2001 CRA data. The second largest
SBA lender in dollars, and third largest in loans, Wells Fargo is
an SBA Preferred Lender in 28 states, and originated 3,181 loans
for $473 million in 2003. Wells Fargo has also been ranked the
number one SBA 504 lender nationally for the last two years. Speer
& Associates rated Wells Fargo's online services #1 for small
business and for consumers (2003). Its targeted business services
programs provide outreach and education to women, African American,
Latino, and Asian business owners about financial services. Since
1995, Wells Fargo has loaned more than $20 billion to women and
minority business owners. DATASOURCE: Wells Fargo & Company
CONTACT: Angela Jones, +1-202-554-9000, or Matthew Hurwitz,
+1-415-222-1679 Web site: http://www.nfib.com/ Web site:
http://www.wellsfargo.com/
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