News Column

Care, Energy Costs Concern NH Businesses

Jan. 8, 2013

Jake Berry

Rising health care costs top the list of challenges facing local businesses in the coming year, business leaders warned lawmakers Monday at a legislative forum at the Crowne Plaza Hotel in Nashua, N.H.

As a state, New Hampshire already faces some of the highest insurance costs in the nation. But with the new federal health care law taking effect, rates are likely to increase further over the coming months, business leaders said.

Business leaders and state legislators addressed the health care issue, along with energy costs and the state tax structure, among other issues, during the session, which was hosted by the Greater Nashua Chamber of Commerce.

"Health insurance has a dramatic impact on businesses and growth of businesses," Tom Weldon, a principal with Eaton & Berube Insurance, told the audience of about 50 that gathered at the hotel.

"The goal (of the health care law) was to insure more people," he told the audience. "But nobody addressed the costs very fully in the legislation."

Starting next year, the health care law, known pejoratively as Obamacare, will require businesses with 50 employees or more to provide health insurance coverage for its workers. Supporters initially projected the law would increase access to health care while limiting insurance costs. But the savings have not yet been realized, and businesses are now facing insurance costs in the thousands for each employee.

"A lot of companies are looking at this, saying we're better off not providing insurance, paying a $2,000 fine," said Weldon, who serves as president of the state health underwriters association. "They just can't afford it."

The universal coverage mandate, upheld by the U.S. Supreme Court, is set in stone. But at the state level, legislators will shape New Hampshire's health care system in the coming months, establishing the insurance exchange for those who do not receive insurance coverage through their employers.

State lawmakers also will help determine the direction of the medical services available to patients across the state, setting the funding levels in the state budget.

Over the past two years, the Legislature forced service cuts and layoffs at hospitals around the state, cutting funding by $250 million, according to Frank McDougall, vice president of government relations for the Dartmouth-Hitchcock Medical Center.

"That is just horrible policy and unbelievably unfair," McDougall told the crowd.

But lawmakers will have an opportunity to restore some of the funding, as well as lost Medicaid reimbursements from the federal government, in the legislative session. Beyond the budget, the Legislature also will address a planned Medicaid expansion in the coming months.

"That would help to control costs over the long run," state Sen. Peggy Gilmour, D-Hollis, said, referring to the funding, as well as better preventative and coordinated care. "It would help reduce the costs of your and my (insurance) premium."

Among the other leading issues facing businesses this year are energy costs, business leaders said.

Once again, New Hampshire's energy prices rank among the highest in the region. Many businesses have worked to limit their costs through conservation and sustainability efforts.

BAE Systems Electronic Division, for instance, has used efficiency lighting, among other measures, to save $5 million in energy costs over three years, according to Don Hill, the company's director of facilities.

Still, the company's savings have struggled to keep pace with the rate hikes, Hill said.

"In 2012, in New Hampshire, we reduced our consumption by 1 percent, but our energy costs went up by 2 percent," he said. "Energy is obviously a major operating expense."

Others suggested lawmakers could help to address energy prices through major infrastructure projects, such as the controversial Northern Pass hydro power line proposed in the North Country.

"We believe that whatever helps support viable and sustainable energy is good for New Hampshire. The Northern Pass project helps bring additional capacity into the New England market," said Jeffrey Rose, director of public affairs for BAE, which has not formally endorsed the project.

Still, business leaders believe lawmakers can best limit energy costs by introducing more competition to the state market, while businesses focus on sustainability efforts.

"Conservation is still your best bet for reducing energy costs. The best way is don't use the energy," Hill said.

"There's not a lot we can do to address (energy costs) directly, but it's good to hear all the different ways businesses are trying to reduce costs themselves," state Rep. Shawn Jasper, R-Hudson, said. "It certainly gives us a lot to think about at the Statehouse."

Source: (c)2013 The Telegraph (Nashua, N.H.) Distributed by MCT Information Services

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