WASHINGTON – Gene Otto and his wife, Judi, opened the San Francisco Street Bakery in Olympia, Wash. 20 years ago and have been baking fresh bread and pastries seven days a week ever since. But the past few years have been tough on the family-run operation.
The bakery has 20 employees but only seven have health insurance, including Otto, his wife and his son. Otto said they can only afford to buy individual policies because group plans are too expensive. Many small business owners are in the same position.
“We are suffering mightily as a group. We can’t afford the coverage that we have and it’s getting more expensive every year,” Otto said.
Otto was one of 130 small business owners from 26 different states that ascended on the Capitol building Tuesday to meet with lawmakers and demand real changes in health care. Over the past decade, the cost of health insurance for small businesses has jumped by 123 percent and business owners like Otto have felt the crunch.
Otto said insurance costs have prevented him from hiring more employees and expanding his business. Otto urged legislators to vote for the Affordable Health Care for America Act. Otto said he thought the House’s health care bill was the best way to increase competition between insurance companies and help to lower costs. Under the reform, individuals can choose between private plans, health co-ops and a public option.
At the Senate HELP Committee hearing, Democratic Sen. Tom Harkin of Iowa acknowledged the hardships faced by small business owners and promised “help is on the way” with the release of the Senate’s legislation later this week.
“Small businesses are desperately trying to do the right thing for their employees – and doing the right thing will also make them more competitive and profitable. But they need help,” Harkin said.
Harkin also said the Senate legislation would include a public option. “There is very little competition in the small group market: the market share of the largest small group insurer rose from 33 percent in 2002 to 47 percent in 2008. Under the status quo, small businesses do not have much choice.”
Otto hopes more choices will offer some financial relief to his family and business. He said he always planned on his children taking over the bakery when he and his wife retired but now he’s not so sure.
“My son Nolan is 21 and he’s working the business with us. He talks about wanting to take it over but it’s a very difficult climate to operate a business in when you can’t offer health care to your staff.”