What’s the next step in cultivating a diverse and healthy online news industry?
Buying health insurance remains one of the crippling obstacles standing between would-be news entrepreneurs and the realization of their visions. America’s system of employer-provided health care effectively creates an added cost on every job created in the United States, whether a news company creates it by hiring you, or you create one by starting your own publication.
As enthusiastic a cheerleader for news entrepreneurship as I’ve been over the years, I dread the moment in every conversation I have with a journalist working on his or her start-up when I ask “So, what are you going to do about health insurance and benefits?”
It’s the part of a traditional job that most of us take for granted, but that we lose when we set out on our own. Too many of us forget about the expense of benefits, especially health insurance premiums, when we account for what we’ll need to pay to launch and run an online news business.
And they are expensive. I’m now paying $765 a month for health insurance for my family, which covers substantially less – and with higher deductibles and co-pays – than I ever had as a newsroom employee. That also buys me the hassle of having Anthem, our insurer, tell our doctors we don’t have coverage every time they file a claim. After an hour or so on the phone – hey! – Anthem “discovers” our policy and the bill is paid – until the next claim.
So the expense of health care for a news entrepreneur isn’t simply the expense of paying the premiums, it’s the expense of navigating the private health insurance industry’s bureaucracy, too – work that would be done, at least in part, by an HR department at a larger organization. (Not that we didn’t spend way too much time on the phone with insurers when we were covered through newsroom jobs.)
Buying health insurance in the individual market leaves you without many of the consumer protections enjoyed by employees who get health insurance through their employer, including prohibitions against the loss of coverage and ever-increasing rates for pre-existing conditions. While the recently enacted federal Affordable Care Act [ACA] offers some reforms, most of those won’t take effect for two to three years, and won’t affect existing policies. But health insurance companies already are using the health care reform act as an excuse to jack rates for individual policy holders.
Anthem raised our premium in December 20 percent a month over what we’d paid earlier in 2010. The company’s parent, WellPoint, made $2.9 billion in profit last year – up from $2.7 billion the year before – so I don’t buy for a moment that the ACA forced the company to increase my rates. Plenty of my premium dollar fell straight to WellPoint’s bottom line.
But that’s the reality I have to deal with as a business owner. Even under the ACA’s new rules, insurance companies next year will have to spend only 80 cents of each dollar they collect in premiums from individual policy holders on actual health care. For policies sold through large employers, insurance companies will have to spend 85 cents on the dollar on health care. That’s a five-cents-on-the-dollar wasted expense for small business owners. (For comparison, the federal government spends about 97 cents of every Medicare dollar on health care.)
Ultimately, the easiest way for America, as a society, to encourage job growth would be to divorce job creation from the expense of providing health care. Businesses in most other industrialized economies don’t have to pay for an individual’s health care when they create a job – the expense of health care is shared broadly, though taxes and fees for national health services.
Absent that, foundations or institutions interesting in cultivating start-up news publications could help by leading the creation of health insurance pools for news entrepreneurs. Allowing us, collectively, to tap into that “large group market” would help us get at least a 5% better return on our health insurance dollars. Similar efforts have been made for freelance writers in the past, but news entrepreneurs aren’t freelancers – many of us are building businesses with the expectation that we might hire others one day. It’d be nice to be establishing health plans which could support that.
News entrepreneurs need a clearer path to buying health insurance, for themselves and – hopefully – for their employees. We need to get together, to talk with each other, to learn from each other, and to combine our buying power to help us all get a better deal on this basic need. I believe that a clearer path toward health care for news entrepreneurs would lead to more start-ups, and more news coverage, for communities around the nation.
Let’s start the conversation. What are you doing for health care, and what would you like to see be done?