In his speech to Congress on Wednesday night, President Obama touched on the urgency of fixing health care for America's small businesses. The President highlighted how rising costs are forcing business owners to scale back or drop coverage and how concentrated health insurance markets give insurance companies free reign to overcharge small businesses who have no leverage.
As people concerned with small business issues -- a local Chamber director and a small business operations manager -- we have a major stake in the success of health care reform. Our current health care system has failed small businesses famously. It has failed to control costs. It has failed to give small businesses real choices. It has failed to offer true financial security or peace of mind. As such, it threatens the very viability of small businesses across America.
Starting a small business that creates jobs and serves the needs of a community is part of the narrative of the American Dream. Yet small business owners who are doing exactly what that narrative says to do are facing a real nightmare when it comes to health care. Small businesses that do offer health coverage pay 18 percent more than larger businesses for the same coverage, are vulnerable to steep annual rate hikes with no recourse, and watch health care costs eat deeper and deeper into the bottom line every year. Businesses that can't afford it are left without any financial security and struggle to recruit and retain good employees against bigger competitors that can afford to offer benefits.
Small business owners are fundamentally problem solvers and pragmatists: we seek solutions to everyday problems, and we're interested in what works for business, our employees and our customers. We've grown accustomed, though, to the name of small business being borrowed - without permission - to justify conservative ideological positions. So we have pretty good radar for that sort of thing... and the alarms are going off right now in health care debate as conservative lobby groups try to paint health care reform as bad for small businesses.
The fact is, small businesses have as much to gain as anyone from real health reform that stops insurance companies from denying coverage, increases our bargaining power, offers us more choices, and drives down costs. There are four core components to the President's plan that will help small businesses afford quality health coverage:
- A health insurance exchange will promote transparency and new choices.
- A competitive public health insurance option will give small businesses new leverage, drive down costs, and force insurers to compete around cost and quality.
- Insurance market reforms will prohibit pre-existing condition exclusions and end discrimination against small groups based on health status and gender.
- Affordability measures, including tax credits for small businesses and subsidies for our workers, will make health coverage affordable for smaller businesses and our employees.
These elements are essential to make health care work for Main Street. Yet, despite these benefits, the name of small business has been invoked more often than not to justify opposition to reform.
For example, the health care surcharge proposed for the highest income earners to help make coverage affordable for everyone in the House bill, HR 3200, has been attacked as a "tax on small business" despite the fact that 96 percent of small businesses would be unaffected by the original proposal (the original proposal would begin assessing the surcharge on families earning over $350,000; it appears likely the threshold will be raised as high as $1 million). The overwhelming majority of enterprises you would think of as small businesses - your auto mechanic, the neighborhood florist, your favorite corner bakery or café - won't come close to being touched by this surcharge. Most small business owners will tell you they can only dream of taking home that much in profits... many will add that even if they did, they'd be happy to pay a little more to put an end to their constant health care headaches.
The President's call that everyone must take responsibility for meeting the challenges of health care -- including employers and individuals as well as government and insurers - has also been criticized in the name of small businesses, even though the proposed plans would provide an exemption for the vast majority of small businesses (as many as 95 percent) from the employer contribution requirement. The real point here though is that small business owners share a sense of responsibility to do right by their employees and want to offer health coverage. We need reform that makes it possible for small businesses to opt in on health care, not opt out - and that's what the insurance exchange, public plan, market reforms and affordability measures will do.
Small businesses can't afford to see costs double over the next ten years. They can't operate if forced to continue paying twice as much in administrative costs as larger groups. They can't continue to absorb the rate hikes that follow after an employee faces illness or injury, or go without coverage after being "purged" by an insurance company.
Without real reform, small businesses could be forced to cut coverage, lay off workers and shut their doors. We risk losing the critical foundation that small businesses provide for the economy and for communities. We can't afford the cost of doing nothing.
So why are some groups working so hard, against the facts, to make reform sound bad for small businesses? Because they know that speaking in the name of small business carries real currency in the American political debate. Now is the time for small business owners to speak for themselves and stand up for what we really need: real health care reform, and fast.
Susan Davis is the Executive Director of the Rainier Valley Chamber of Commerce in Seattle, WA. ReShonda Young is Operations Manager of Alpha Express, Inc, a family-owned transportation and contracting business in Waterloo, IA and an Executive Committee member of the Main Street Alliance (www.mainstreetalliance.org).