Small Businesses Worried About Health Care Reform

It may not be surprising to some on Capitol Hill that one of the big constituencies that may affect the health-care debate the most includes hundreds of small business owners. In fact, this demographic is presenting some serious challenges to the Obama Administration’s efforts to overhaul health care.

In an attempt to sway small business opinion, White House-backed economists have made been launched public campaign to convince those business owners and entrepreneurs that they will see noticeable reductions in the health care costs should the new legislation become law.

It really amounts to a clever blend of attractive incentives that will entice small businesses to provide insurance coverage to their employees and achieve President Obama’s goal to provide coverage to currently uninsured Americans.

According to estimates made by the Employee Research Instituted, there are 16.8 million uninsured workers at companies with fewer than 100 employees, accounting for about 63% of the total 26.8 million workers that do not have insurance coverage.

There is little argument coming from executives regarding the White House’s stance that small businesses that offer health coverage routinely pay more and get less in the current health insurance market than larger ones. In fact, the Council of Economic Advisors noted in a study that smaller businesses pay up to 18% more per worker than larger employers for the same health insurance policy. This explains why many smaller businesses have dropped their insurance plans, or worse, cut down employment or ceased operations.

President Obama made is own sentiments clear in a recent address. “This is unsustainable, it’s unacceptable, and it’s going to change when I sign health insurance reform into law.”

What is worse that some Democrats in the House are attracting the ire of major lobbying groups like the National Small Business Association and the National Federal of Independent Business (NFIB). At present, bill issued by the House would require all by the smallest employers to provide their employees health coverage or pay an 8% payroll tax. The bill would exempt employers with annual payrolls of $500,000 or less.

The White House analysts argue that the proposed tax credits to companies offering coverage would help to alleviate the potential payroll tax payout. Additionally, small businesses would save money by having access affordable policies through a proposed insurance exchange.