The Health Care Predicament: Will Obama Help Small Business?
How much longer will small business owners have to wait before the government addresses their health care predicament? According to Todd Stottlemeyer, president and CEO of the National Federation of Independent Business, the cost of health insurance has been the number one small business problem for more than 20 years. This status was confirmed this year in the 2008 edition of Small Business Problems and Priorities, a study conducted every four years by the NFIB.
Health insurance costs for small businesses have risen 129 percent since 2000, and these huge increases have forced some small business owners to drop employee health plans; now only about 59 percent of small firms (3–199 employees) offer a health plan, down from 68 percent in 2000, according to Stottlemeyer. Will Obama fulfill his promise and make health care reform a priority, and, if so, what changes will help small business the most?
Although Obama’s stimulus plan will be priority number one, many expect health care reform to come as early as this year. Neil deMause, of CNN Money Small Business, writes, “Smaller reforms are likely in 2009, followed by a full-on throwdown over a major health insurance overhaul in 2010.”
What’s on the table for health care reform?
Obama has already endorsed a reform plan, a new National Health Insurance Exchange, that will allow small businesses to band together across state lines to offer group rates, according to deMause. This will allow business owners to negotiate better rates, and small business owners will no longer face large premium increases every time one employee gets very ill. This is a plan that will help small business owners tremendously; it has a lot of support in government, so small business owners are hopeful.
An area of concern for entrepreneurs, however, surrounds the question of making insurance coverage mandatory, and many small business owners are worried that a reform plan might impose taxes on companies that don’t provide insurance. According to deMause, Senator Max Baucus (D-Mont) has proposed a “Call to Action” plan that is similar to Obama’s but different in that it includes mandatory coverage. Health experts think this is key to keeping overall costs down and it certainly helps the health insurance companies, but small business owners are worried. They would rather see the responsibility for coverage placed on the individual, especially during a recession when any additional costs could bring a company down.
While small business owners continue to await federal health care reform, many states have already made changes. According to Martha Lynn Craver, associate editor of The Kiplinger Letter:
- New Hampshire will make insurers offer a more-affordable plan to small businesses.
- Florida will allow insurers to offer bare-bones policies.
- South Carolina will allow smalls to band together.
- Oklahoma will expand its program to help small employers so that it includes firms up to 250 workers.
- Maryland has a new program that offers subsidies.
- Alabama will provide employers with a tax deduction.
For more details about what’s happening in these states click here.
