US health Insurance, % of business owners overhead? and staying competitive.

I'd like to know as a percentage of your shop rate or overhead cost, about how big a chunk does proving health insurance to your workers add to your overall cost in the US?

Reason I ask is I was thinking recently about what keeps Canada competitive with the US when we pay more for everything here, some machines being close to 2X the cost of the same thing in the US(20-50% more common and that's with our dollar being even), and sometimes next to no service depending on where we are. I think we also pay more on most materials, many specialty alloys being brought in from the US at extra shipping costs and so on, same for tooling. Generally wages seem sort of similar when averaged out and our dollar has been equal to higher for a few years now. Here they say our dollar is too high, we'd be a better deal at $0.70, except that by then our machine costs again double(how's that making anyone competitive?) We pay more for gas as well. So... what could potentially make it so that some places in the US were still buying here??? and how come are we not having more Canadian stuff made in the US?. All I can really come to is that the Health Insurance cost on US employers must be a big chunk of what is raising their overall cost which would offset our difference in operating costs so that we magically become somewhat of a deal, because other than that I cannot think of anything. I think in many cases you even have better income tax incentives for businesses, like how much of the equipment they can write off first year tax free.

It really puzzles me when you could take a same size shop with same equipment, and build and equip it for about 30-50% less in the US. And then we have our Politicians and Economists (people who never spent a cent of their own)telling us we have to invest in more new technologies to remain competitive. Doesn't add up, if we invest in a new machine it gets shipped in from the US 99% of the time anyway and marked up. So.. what's killing your price advantage if not the health care cost?

btw, most machines here get prices in USD anyway, its just the # ain't quite the same... exchange hits after that if our dollar drops.

Most shops dont offer health insurance. If they do offer it they offer really bad coverage with high deductables. Some only offer it for the employee not for his family. The cost of coverage that you guys have would easily exceed the monthly wage of the average worker. 2000 per month would be a good rate for health insurance for a family of 3-4 people. That would be coverage without high deductables and perscription coverage. You can get coverage for a couple hundred a month but it wont really cover anything except major stuff and even then the high deductable will bankrupt you any way so most dont even bother. Most of the people that I know who have insurance work for large corporations or the state, otherwise they dont have any.

it really depends.... on the state, the age of the workforce, the deductables, the "networks", etc. I am 42, can't tell you the deductables because I have never used it...but the insurance for me is about 200 a month. Thats with company a, comany b wanted about 260 for basically the same thing. I know others pay more...but I'd say a range of $1.00-4.00 per hour worked is health insurance.

Willie is probably pretty close with $1-$4/hr. I'm 49, self-employed, and pay under $500/month for me and my wife. Her's is more than mine, so about $200 for me and less than $300 for her.

Another site I occasionally read did a poll to see how many people that didn't have any health insurance would be forced to get it under Obamacare. Not very scientific as the poll only got a little over a hundred responses. The poll showed 68% get health insurance through their employer, 16% get health insurance on their own, and 13% have none at all. GCC's Health Insurance Poll - Pirate4x4.Com

So according to that poll, about 2/3rd's get insurance through work, and about 85% have health insurance. Wouldn't mind seeing the results of a similar poll on this site, to see how they compare.

As a self employed person without employees, I have some other large costs that are added into my shop rate. I have to pay both ends of my Social Security taxes, so over 15% there for me, as compared to an employee who pays half that while his employer pays the other half. So the employer is paying around 7.65% there. I also put at least 15% aside for retirement. Many companies will do some sort of match on the retirement funds, up to a certain percentage of the employee's pay. I think you have similar expenses in Canada, but the funding comes from different sources? We pay much less in costs and taxes on things like machinery and fuel, giving us lower expenses, but then we have to spend it again on health insurance and retirement costs. I'm thinking that overhead in US and Canadian shops isn't all that different from each other when all totaled up.

If you get laid off from a job you can carry on getting the same coverage for 18 months but pay the full price - the employee and employer contribution. That seems to run about $1200 a month!

Chris P

I'm 49, self-employed, and pay under $500/month for me and my wife. Her's is more than mine, so about $200 for me and less than $300 for her.

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My employer pays $1,000 plus my $152 share; my wife's employer pays $600 plus her $300 share. That's over $2,000 a month! Then I still pay some of the bill - its all Bullshit and graft. Eliminate insurance in all of its forms and watch costs plummet...

I here about people paying only a couple of hundred a month for coverage and I am curious as to what kind of coverage it is. I have bought coverage for my family and policies in that range covered nothing. 10 years ago I was paying 1200 for the 3 of us. I have seen many people go bankrupt with high deductable policies even those who had a lot of money. If I had bought one of those policies I would have lost everything. I dont think you can get real coverage under 2000 bucks a month for a family.

no offense,,, but 1200 a month, thats 7.50/ hour on a 40 hour week. It figures 14k per year,,, how much health bills a month do you have? Heck for that kind of moneye I'd self insure if you are healthy.

1/3 of all healthcare cost is going to the insurance company. Where is the "shared risk" in this?

Self-employed here, wife and two kids, 5 total. High deductible (10k) costs about $250 a month.

But, it covers a visit a year for each of us, and "discounts" on visits and various procedures...I'm guessing the 'network' discounts apply, even though we pay for them.

We pay for DR visits and prescriptions at the above mentioned rate, haven't had a big emergency (can cover the deductible) and in general are happy with the setup.

No, it wouldn't work for everyone, and we're generally healthy, and there are big problems with "the system"... not disputing any of that...


Happy Easter!

-James

I figure the hourly cost of the average($65-100K in the US) CNC machine is about $2-6 more an hour in canada(2000hr year over 5yr term) I guess over that term length its not as shocking as the 20-50+K more on the initial price. I think the average employee costs 15-20% more than the base salary here as well for the EI, workers comp and whatever else, a bit more if they have a good medical plan(glasses, teeth, stuff the Gov doesn't cover). But lets assume the $20hr guy costs 25-26 here as well.
So overall it must work out to very similar operating costs. Canada has usually been in a bit of competition with mexico for who will get US work, I think we were beating mexico on lots of stuff because of technical advantage and similar work ethics to the US and less language barrier. I was mainly thinking that with some of the things being tried to change your health care system, if it somehow made the overall costs more reasonable for everyone in the US it might be those few dollars/hr that will really tip the balance and take us out of the equation.

11 years ago I had Blue Cross Blue shield. 5/10/15 deductible. I could get a new heart for $100. Disability, 50k life and vision. I was paying $12.50 a week, and that was after a massive increase, I had been paying $6.50. The company paid 30 or 35 toward your insurance per week. You could actually get a dollar an hour extra if you didnt' take their insurance. About $150 a month for just the health insurance.

2002, $265 a month, I had to pay half. By 2004 that had gone up to about $350... BCBS plan, not as good as the one I used to have.

Then I got forced into an HSA plan. I was the only one in the company that still had a BCBS plan. Worked out for me, the boss paid for the insurance 100%
about $270 a month, and I just had to put money into the HSA account. I was taking home an extra $20 a week, plus building up a decent chunk of change in the
account. I think it was a $2000 deductable. I never had to touch the insurance, so I dont' know how good or bad it was.

2007, 2 single males. HSA plans were cheap, $140 a month if you didn't smoke and $250 if you did. I never took the insurance, and my business partner never
actually had to deal with the insurance side of it. He found a doctor that flat out did not take insurance, so he was pretty cheap, and he just paid with his Health Savings Account.

Now he is married, gets his insurance through the old lady. Over $5k for the year, employer picked up another $5k and he had $7k out of pocket expenses. Granted they had a kid, but that's a lot of money. No way we could swing that kind of money as a small business.

My mom, state job, she just retired. $700 every other week, and the state picked up the other half. Almost $3k a month, and she had NO choice. Shortly after
she started that job, she was diagnosed with MS. Couldn't switch plans or jobs, or she would have no insurance at all, and that was not an option. Now that she
has retired, its $400 a month for the same plan (20 something years ago, the plan was cheap). That money also included a massive life insurance policy and disability and all that fun stuff.

That is just a LOT of money. I wish I could go back to my $12.50 a week.

SND said:

I'd like to know as a percentage of your shop rate or overhead cost, about how big a chunk does proving health insurance to your workers add to your overall cost in the US?

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It costs me just over $1/hr. to provide insurance to employees who choose it. The policy is just for employees and is a PPO product with $15 co-pay, no prescription benefit. It's a pretty bare-bones package, but beats the alternative of no coverage. If I was to add spouse and dependents coverage, the cost would be ~$4/hour, with a prescription benefit and spouse & dependent coverage, >$5/hour.

Hey, at least we don't pay higher taxes and have a single payer system like every other modern country in the world. It's way better to pay big bucks to insurance companies and get shit coverage. So awesome to lose your insurance if you lose your job! So god damn cool to go bankrupt from medical bills....even when you have insurance.

Thanks to dip shit conservatives we can't do anything cool in this country.

John Welden said:

.. So awesome to lose your insurance if you lose your job! ..

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I'm still trying to figure out how we ended up with a system where employers were in charge of employees health care. I think since it was so cheap 20-30 years ago, it just worked out that way. At my first few mold maker jobs in the early '80's, I paid absolutely nothing for health insurance. It cost the company very little to provide it. Then it slowly increased to where we are today. I've worked for some very good bosses over the years, but I don't think they should be in charge of my health care.

A friend of mine has health insurance through his employer. Very expensive since two guys in the past 20 years have died at his company from AIDS, and a few more from cancer. So his group rate is very high, even though he is single and healthy. He has actually been looking into opting out of the group, and getting insurance on his own. Even without the company paying any of it, he can get better coverage at a cheaper rate than he does now.

I pay 320 @ month for myself, my spouse and 4 children. My employer's part is right around 1800. That's about half my wage on a 40 hr. work week. I'm one of about four hundred employees, so you can imagine that health insurance is a very large portion of our expenses.

It is a really good plan which includes dental and optical, and even includes monthly visits to a chiropractor. Not to mention the annual visits to a psychiatrist if needed. We pay a $20 Co pay for office visits (excluding annual wellness check per participant, those are free), a $50 Co pay for emergency room visits, and an annual $2000 deductible for procedures and hospitalization.

All said, it's the best insurance offered in the great state of Texas, even better than the state itself offers to it's employees. After working in a small machine shop, and going the whole bankruptcy due to medical bills road recently, i'm grateful for my job, and won't be going anywhere any time soon dsooj long as I get to keep my health coverage.

Is the 10,000 dollar deductable per person? It usually is so a family of 4 will pay out 40 grand before the insurance picks up a single dime and the then it resets each year. You will go broke if anyone has a health problem ever, it will quickly eat up every cent you earn. A good friend of mines son has asthma and he has a 10 grand deductable plan. He spends more than 1000 a month on checkups and medicine for his son the insurance kicks in at the end of the year only to reset and his premiums go up every year because of the claims. A single inhaler costs more than 200 dollars and he needs 3 different ones. You guys on these plans really need to find out exactly what is covered because they will ruin you in short order, I know from first hand experience.

I'm wondering when will hit a tipping point and conservatives will support national healthcare? I'm not talking republican douche politicians. I'm talking conservative dude that works at a machine shop or wherever. How's that free market bullshit working out for you? Must be great going bankrupt because your kid got cancer? How about paying a little higher taxes and not have to worry about it? You know, like every other rich country on earth? Oh wait, can't do that, America has to be about maximum profit, maximum greed.

Barry Weeks said:

I'm still trying to figure out how we ended up with a system where employers were in charge of employees health care.

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It started during WWII. The government restricted wages to prevent inflation, but allowed employers to add benefits like health insurance. Many employers added health insurance as a carrot to entice people to work for them.

Here is an article from the New England Journal of Medicine which goes into more detail: http://people.umass.edu/econ340/nejm-ebhi.pdf

Gee John, how would you feel if someone told you "had" to buy beer, 6 cases per week, regardless if you drank the stuff or not? How about broccoli? You have to buy 75 lbs a month...despite your growing your own. Mandating that one "has" to buy something is against the constitution. It works against the free market. I like the free market, if I feel something is not worth the money, I don't buy it. If I don't like Broccoli, I don't buy it. I don't have all the answers but I don't feel that making someone do something that violates the constitution is a way to "fix it". I see it as more of a problem. The drivers of health care costs have been widely debated, how about we keep this thread on topic just stating what people are paying for insurance, it is interesting to me.