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To maximize profit, health insurers dropping small businesses

Written by Wendell Potter

Arguably, the people who have benefited most from the health care law—at least financially—are the top executives and shareholders of the country’s health insurance companies. And to maximize profit, health insurers are dumping small businesses or raising their rates substantially. Many small business owners who would like to keep offering their employees health coverage can no longer afford it.

Insurer rates are rising steadily, and small business owners cannot afford to keep offering coverage as much as they would like to.  At the same time, the insurers’ share prices have doubled, and some have more than tripled, since the Affordable Care Act was signed.

About two thirds of the country’s small businesses offered coverage to their workers in the 1990s. Now, it’s down to 50-55 percent. One reason is that insurers are “dumping” unprofitable accounts, especially small business customers.

Insurers can lose money if a single employee of a small business gets sick or needs costly care. So, it’s in their interest to stop serving those businesses. Unfortunately, Obamacare does little to keep them from doing so.

For more information on what’s happening in the health insurance market, visit the Center for Public Integrity, where I write about this in greater detail.

For information about how health insurer mergers are driving up premiums, click here. To learn more about health insurance options and how fewer health insurers are offering out-of-network coverage, click here.



  • …guess the health and well being of shareholders, executives, and CEOs is more important than that of small businesses and their employees.

    By forcing people off employer sponsored medical coverage, they are only ensuring that healthcare costs will go up further (so they can justify further raising premiums to keep the profit margin steady) as the those left behind will most likely end up being “charity cases”.

    In a sense they are only hurting themselves as eventually nobody (save for the extremely wealthy) will be able to pay for their ridiculously high priced coverage anymore.

  • Too much of the Obamacare law was written by and for the insurance companies. They had threatened to withhold their support for a number of senators if things they didn’t want were included in the law, such as the government option, and things they did want were not included in the law, such as the mandatory insurance provisions.

  • Is the insurance companies’ excuse for the higher premiums because Obamacare requires certain coverages to be included in the small business insurance contract, thus requiring a higher premium? Please address in a future article.

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