Back in June of 2008, CNN Money reported about a bipartisan coalition coming together at a small business summit to push for drastic healthcare reform. Fourteen senators, seven Democrats and seven Republicans, organized in hopes that healthcare reform would be a leading topic they would work on with the new president.
Over one year later in July of 2009, President Obama addressed concerns small business have with our current healthcare system. Small businesses, with less employees, are hit the hardest financially with employee health conditions in our current healthcare system as big enterprises can spread out cost incurred over hundreds of employees. In a radio address, Obama said “small businesses have dealt with the health care problem by cutting benefits, dropping coverage, shedding jobs or even closing [their businesses] altogether.”
CNN Money accounts for three concerns that small businesses may still have with the proposal on the table. With employers being mandated to provide health insurance, those with payrolls of $250,000 could be taxed 2% and 8% for $400,000 for not providing insurance, and there could be a $750 penalty for not providing insurance if you have more than 25 employees. Those penalties can be seen as encouraging employers to cover insurance, but they could also discourage the growth of a business. Secondly, some entrepreneurs would like taxes on providing more elaborate and deluxe insurance policies as big business can currently offer those plans tax-free. And finally, small businesses don’t have the bargaining power that large corporations do, which could be addressed by pooling small businesses together with the Small Businesses Health Options Program (SHOP).
Obama explained during his speech on Wednesday, that if insurance companies do not lower their premiums while apart of the marketplace exchange, the public option would exists as an choice for individuals and small businesses in need. The intention is for the public option to drive the insurance companies to be more competitive with their prices, which would in turn benefit the consumers.
Accordingly, insurance companies will be taxed on the most expensive policies to ensure greater value for the money. However, there’s concern that economic rules will ensue, and with insurance companies being charged for their expensive policies, they will in turn charge the consumer more to cover the difference. This could lead to employers to choose less generous plans, which will then lead to the employee paying more out of pocket.
Our country is the closest it has been to reforming healthcare in over 65 years. Many Americans and businesses have adapted to the current imbalanced healthcare system – from either dropping entirely dropping coverage to insuring themselves at the bare minimum. The current proposal on the table offers ways to solve the healthcare crisis, but there appears to be a small price that comes with change. Will small businesses be willing to make short-term sacrifices to beneficially restructure our insurance system for the long-term?
Posted by Adrienne on September 14, 2009 at 1:06 pm.
