The membership of the Independent Business Association recently participated in a survey regarding the pending overhaul of the United States healthcare system. While it is universally recognized that something has to be done with the spiraling costs of healthcare there definitely is not a consensus on how a palatable solution is achieved. As we have watched the healthcare debate take shape throughout the nation, the small business community is left waiting and watching as the reforms that are (or aren’t) implemented by Congress and President Obama will certainly impact the business community. The healthcare debate has shaped up to be one on the more polarizing policy issues that has been vetted in some time and while the IBA survey did produce agreement amongst a majority of members, there were several thoughtful dissenting points of view that were presented as well.
To recap some of the more heated questions, IBA membership responded with a 67% “NO” ratio to the question of “should the government be allowed to develop a public option to compete with the private sector health insurance?”. In the comments section of the survey we did receive several relevant points including the following:
In favor of: “A “one payer” system would actually be much more effective and efficient, and this option provides an alternative to employer-provided health care for those who don’t receive such access through their work. “
Opposed to: “ Allowing the government to compete with private industry would be unfair competition as the government could easily subsidize their coverage to make it more economical. This would eventually drive private industry out and allow the government to take over all health care. This would inevitably increase the cost of health care and lower the quality of health care. Government can not do things better and more efficient than private industry. Mail service is a prime example.”
In regards to the proposal of any employer with a payroll north of $500,000 would be required to provide health benefits or face up to an 8% tax of payroll as a penalty, 80% of the IBA membership was against this proposal. Once again we see opposite ends of the spectrum when it comes to the arguments:
In Favor of: “Those employers do not offer these benefits now? Tell me how you justify treating valuable employees in such a way. or are they not valuable? If you tell me that such a firm cannot afford to provide these benefits, what does that say about the company’s priorities over the last 10-20 years. Maybe we should have consumers demand that all products they buy come from responsible firms – including foreign ones.”
Opposed to: “This will force small businesses to unload their plans onto the public option because the 8% tax will be cheaper in the short term than funding benefits. This will lead to a surge in the public option with even higher taxes to come.”
From the macro viewpoint our membership was also asked “Do you feel that the insertion of the government into medical decisions and funding of healthcare is an appropriate role of the government?” 84% of our membership answered NO to this question. A couple of comments that stood out:
In Favor Of: “The private sector has demonstrated that it can’t handle all the citizens’ needs, and simultaneously has shown that showing a profit is more important than improving the health of those citizens.”
Opposed to: “Our government can not administer any social program effectively and I expect health care would be the biggest blunder in history.”
The consensus is that the small business community can not afford to accept the status quo when it comes to the cost of healthcare. One of our members indicated that there were no material changes in the status of their employees over the past year and their healthcare provider came back with a 35% premium increase year over year. The hyperinflation of healthcare costs is unsustainable and if a solution is not executed properly the continuance of these increases will ultimately be crippling to the U.S. economy. The passage of comprehensive healthcare reform is going to take real leadership. The main concern of the IBA membership for the proposed Healthcare plan plans are related to the funding mechanisms to cover the costs. The concept of more care for less cost was met with great skepticism and the belief that there will undoubtedly be higher taxes to come for the business community. In regards to solutions, the majority of the membership of the IBA believes that a free market approach that focuses on a consumer driven model, increased pricing transparency, encouragement of company wellness programs, allowing for many unrelated small companies to join together to obtain better rates from insurance companies, and tort reform would be great first steps in the process to defeating the health care crisis as well as the most business friendly model.