Health care costs are squeezing America's small business owners, leading more of them to drop coverage for their workers. But not Nancy Clark.
Clark, 48, who runs an advertising firm Glen Group in North Conway, N.H., has continued providing health benefits to her workers, even though she knows it's preventing her from handing out raises, hiring more employees and investing in her business.
"I just feel health insurance is so important that I just can't take it off the table," Clark told The Huffington Post. "I know how important it is for myself and my family. I need it, and if I'm going to do it myself, I'm definitely going to offer it to everyone else," she said. "I truly believe that health care is a right."
Clark does not, however, speak for all small business owners. Like the rest of America, small businesses are divided over President Barack Obama's health care law. According to survey data issued this month by Small Business Majority, an advocacy group that supports the law, exactly 50 percent of small business owners don't want the law repealed, compared to 34 percent who favor repeal.
The future of health care for American small businesses and their workers now lies with the Supreme Court, which is expected to issue a decision by the end of the month on whether the health care reform law is constitutional.
"If the whole law went away, we'd be right back at the status quo," Larry Levitt, a senior vice president of the Henry J. Kaiser Family Foundation, a health-care research organization in Menlo Park, Calif., said. Health insurance premiums are rising and fewer small-business employees get health benefits at their jobs today. Those trends will continue into the future without the reforms, Levitt said. According to Levitt, if the Supreme Court invalidates Obama's law, Congress isn't likely to attempt comprehensive health care reform again any time soon.
"There's a lot in this law that benefits small businesses and their employees," Levitt said. Some of those benefits include tax credits for small companies and state-based "exchange" marketplaces where insurers will compete for business starting in 2014. The law's authors believe this will lower prices and increase choices overall. These policies should make health insurance more accessible, more comprehensive, and more affordable for many small companies, Levitt said.
The National Federation of Independent Business, the most prominent lobbying organization for the field, joined the U.S. Chamber of Commerce and other big-business groups in opposing Obama's plan, objecting to provisions including a requirement that all companies with at least 50 employees provide health benefits or pay a penalty. The National Federation of Independent Business is also one of the plaintiffs, along with 26 states, that brought the lawsuit before the Supreme Court. Glen Group isn't a member of the organization, Clark said.
Unlike those plaintiffs, Clark is optimistic that the health care reform law enacted in 2010 could help defray her company's health care costs, or at least slow down the rampant growth in health insurance prices she's seen since she bought the firm in 1998. Premiums have risen by as much as 31 percent in a single year and never less than 14 percent, she said.
Glen Group employees still have insurance even though the economy has hammered the company since 2007, reducing it from 26 full-time workers to six. This year, workers pay $212 per month and the company picks up an equal share for the plan, which carries a $3,000 annual deductible that must be paid off before full benefits kick in, Clark said. She pays $1,300 a month to cover her family of six.
"I had a really tough four or five years during this recession. Really tough. And I never put the health care on the chopping block," Clark said. "If I was able to survive that, I'll be able to survive the next increase. I'll just figure out a way."
That's not going to be easy. Health care costs are climbing: American families, businesses, and taxpayers spent an estimated $2.7 trillion on health care last year, accounting for 17.9 percent of the entire U.S. economy, according an to government data issued this month. Higher costs translate into increasingly unaffordable health insurance. Small employers have it even worse because don't have the bargaining power big companies use to negotiate lower rates from insurers.
Throwing out the law, which is just one of several paths the Supreme Court could take, would be a "mistake," Clark said.
Her company already has gotten some small amount of relief in the form of $3,800 in tax credits over 2010 and 2011, she said. Clark is more hopeful about the health insurance exchange because she currently has only two health insurance companies from which to choose. "It's an attempt at a solution and I really like that. Why not try it?" she said.
"If it goes away, I'll just be incredibly disappointed to the bottom of my toes but our business will march on and we'll move forward, and we'll keep raising our hand and saying, 'Hey, can somebody fix health insurance for small businesses?'"
Fewer Americans are getting health benefits from their employers than in decades past. About 160 million people are covered by job-based health insurance, making it the number-one source of health coverage, according to data from the Kaiser Family Foundation. But the percentage of employers providing coverage is shrinking -- 60 percent of companies offered health benefits last year, down from 68 percent a decade before, as shown by a report from the Kaiser Family Foundation and the Health Research and Educational Trust.
Meanwhile, the benefits are becoming more meager as employers cut costs by increasing co-payments and offering plans with deductibles of $1,000 or more.
Workers at small companies are less likely to be offered health benefits than their counterparts at large firms. Compared to 99 percent of companies with at least 200 employees, just 59 percent of smaller firms provided health insurance. Only 48 percent of companies with fewer than 10 employees, like Glen Group, offer health benefits.
"People tell me that I'm unusual because at many, many other companies, it's the first thing to go," Clark said. "I can't do that."
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