Small businesses' ever changing role in the health care debate

As proposed health care reforms enter their third month of discussion and debate, some are beginning to realize that whether or not any changes occur - or succeed for that matter - it depends on if they stand to either benefit or hurt the nation's small businesses

As proposed health care reforms enter their third month of discussion and debate, some are beginning to realize that whether or not any changes occur - or succeed for that matter - it depends on if they stand to either benefit or hurt the nation's small businesses.

According to a recent survey released by the Small Business Majority SBM), the small business sector has suffered the most from the current health care system and would stand to benefit greatly from reform.

"Small business owners are in an untenable position when it comes to healthcare," John Arensmeyer, SBM's chief executive, told the Bakersfield Californian.

"Small businesses are desperate for reform. The cost of doing nothing is just too high," he added.

After polling 700 small business owners in California about their current utilization of health care plans and offering benefits to their employees, the SBM found that less than half of them had offered plans.

Of the owners who did not have any type of benefits for their employees, 86 percent said that they had chosen not to because of the costs associated with doing so.

In order to fix the problem, the report suggests that immediate reforms take place to cut down on the $2.4 trillion over the next 10 years that would be doled out by the businesses if no change occurred. Reforms could also save up to 128,000 jobs that would otherwise be lost due to companies cutting costs to stay afloat.

The Commonwealth Fund, an independent research foundation that focuses on the health care system, shared the view of the SBM that reform would alleviate high premiums and broker fees, lower costs, and provide more comprehensive coverage.

"Small businesses are vital to the strength of our economy, and under our current system they don't have the ability to provide affordable, comprehensive health insurance to their employees," said Commonwealth Fund President Karen Davis. "Health reform provisions that take into account the insurance problems currently facing small business owners and their employees will provide security and stability to a large and important segment of the American workforce and their families."

However, others have maintained that reform would result in even more costs for more businesses. For proof detractors look no further than the current situation in Massachusetts - where laws require near-universal health care coverage for its residence - and cite the financial hardships that have affected small business owners there.

"The burden on small business is threatening the success of the health care reform law. It really is the fly in the ointment, " said Bill Vernon of the National Federation of Independent Business, according to a report on Portfolio.com.

While the health care debate continues, small business owners received more positive news from the National Federation of Independent Business' NFIB) Small Business Economic Trends survey for August, which was released on September 8. In the survey, the Index of Small Business Optimism rose 2.1 points to 88.6, almost eight points higher than the survey's second lowest rate that occurred in March.

"Clawing their way back requires some cooperation from consumers, the source of sales for most small firms, and consumers are not yet in a spending mood," said NFIB chief economist William Dunkelberg. "Let 's hope that owners follow up with an increase in spending and hiring."

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Posted: September 9, 2009

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