December 12, 2017  
 
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Small Business Healthcare Reform

 

Why Small Businesses Should Support Healthcare Reform

Small businesses should support health care reform, but not for the reasons currently being cited by the spinmasters in Washington DC.

A recent Op-Ed piece in The New York Times makes the case that small business owners should support health care reform.
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While we support the current healthcare reform initiative on principle, it's very apparent that those who are trying to gain the support of small businesses don't truly understand what makes a small business tick.

Along those lines, here is the rationale The New York Times uses to make the case that small businesses should support healthcare reform:

Their work forces would likely become healthier, and they would have an easier time attracting or holding talented employees.

Guess what? We talk to small business owners all the time and we never hear them complaining that their work forces are not healthy enough.

This conversation never happens. Us: "So, Jane, what are some of the biggest challenges you are facing these days in the business." Jane: "You know, the biggest problem is that my employees are getting sick all the time. Every day, it's a new ailment. It's really hurting our business."

As for attracting talent, most businesses seem to be able to find the talent they need to stay in business. Would business owners like to have more talented workers? Sure, who wouldn't?

Is healthcare reform the best way to improve U.S. workforce talent? Probably not. It seems investing in a better educational system would be a better way to improve worker skills.

After all, if having healthcare benefits is all it takes to get more talented workers, business owners can go that route now…without extensive healthcare reform.

Those who don't offer healthcare benefits obviously believe that the return on offering healthcare benefits doesn't surpass the costs of doing so…or, more likely, they simply cannot afford the extra expense.

The argument that small business owners should ante up for worker healthcare benefits in order to attract more talent or improve employee health is flawed in many respects.

If you believe in this reasoning, where do you draw the line? Why not make small businesses responsible for paying the college tuition expenses of their employees? That would certainly attract worker talent. Why not make small businesses responsible for subsidizing employee food expenses, provided that the food is healthy food? That would improve employee health.

But we don't ask small businesses to do these things, so why do we ask them to shoulder the burden of ensuring that Americans have health insurance?

The reason is that small businesses – those that stay in business, that is -- are something the government can actually control. The government has a much harder time controlling individual behavior. What would happen if the government said to individuals the following?: "You have to have health insurance. If you don't have health insurance, we will fine you and you will not be allowed to work."

Would that be effective? We'll leave it to you to think that one through and gain some understanding on why the government is making small businesses the de facto primary care providers in charge of providing healthcare to most Americans.

Going back to our original premise, that the arguments for small businesses supporting health care reform are weak in the best case and ridiculous in the worst case, it's clear that the spin doctors who are ambassadors to this healthcare reform initiative are struggling to get small business owners on board.

The rationale cited above by the opinion piece in The New York Times doesn't hold water. Beyond attracting talent and keeping workers healthy, what compelling reason does the op-ed piece cite for small businesses supporting healthcare reform?

Just one, and it reads as follows:

Even more striking, with health care reform, small firms could buy insurance at substantially lower rates.

OK, now you're talking our language. The reason many small businesses don't offer healthcare is that it's simply too expensive.

Most small businesses barely make ends meet. They simply can't afford to offer healthcare benefits.

So, there really are only two options. Either make healthcare insurance affordable for small businesses, or devise a system that insures people but doesn't require small businesses to be in charge of making sure U.S. citizens have health insurance.

For a variety of reasons, no doubt, reformers are not seriously considering the second option. Proposed healthcare legislation does focus on the first option, lowering healthcare insurance costs, but this doesn't happen fast enough, nor can we be certain that it will happen at all.

So, the onus is on small business owners. Offer healthcare or be fined. As a result, many small businesses will be forced to expend precious funds on something they would love to buy but cannot afford.

Undoubtedly, this will be the straw that breaks the camel's back for many, forcing some to close down their beloved businesses and layoff all employees.

Yet, despite the inevitable casualties, we're still in favor of the current healthcare reform proposal.

We favor it simply because it's the right thing to do.

Individual business owners must sacrifice dollars to contribute to the common good. We do it whenever we pay taxes. We do it in so many other ways.

So, Obama and crew, if you want to convince small business owners to support healthcare reform, don't sell them a line of bull, as the aforementioned NYT op-ed piece does.

Rather, tap into their patriotism and their heroic nature. The rhetoric needs to be honest and it needs to be compelling. Something like this might work:

Small business owners of America, we are indebted to you beyond words. You are the heroes of America, in the trenches fighting daily to contribute in so many ways…by creating jobs, by powering our GDP, by laying the very foundation that we commonly refer to as the American Dream. You have sacrificed so much and I am now calling on you to sacrifice again…for the betterment of your country and to help and assist the many folks who live in your neighborhood. I need those of you who are not currently offering health insurance to do so. Your profitability may drop, you may have to lower your wages, you may have to forego investments in other things in order to step up and offer health insurance. But we need you to do this…for the long-term viability of this country, to ensure that your children and their children will be able to seek out opportunity and pursue, as you have done, the American Dream. In the short term this will be difficult, but I promise you that on other fronts, I will make your lives easier and help you to become more profitable. We must work together. I need your help now and I ask you to take a leap of faith that your assistance will be repaid and rewarded in the future.

That's it. Just be honest. You need our help. Give us some respect and be honest…that's what you need to do to get our help.

At the same time, beyond asking for our help, solve the root cause problem.

Health insurance benefits are too expensive. If the cost of a PC was $50,000, we small businesses would not buy many PCs. It's when items come down in cost and we can afford them, knowing that the ROI is positive, that we invest.

If you can actually make healthcare benefits affordable, you may be pleasantly surprised as to how many small businesses will step up and are willing to do the right thing.

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Conversation Board

What's your take on small businesses and health care reform? We welcome your comments.

ramf 11/6/2009

I am proud to support health care reform, I have waited for 20 + years to have our government really take an interest in this. We are the most advanced and powerful country in the world. Isn't time that we compete with the other countries that have obtained a resonable health care system? We should have been the first to get to this goal. What are we afraid of? Social Security, Medicare, did that hurt our traditions as a capitalist government? I love my country and look forward to all of us working together to make it an even better place to live in.

KEL 3/22/2010

I agree with most of Gaebler's premises expoused above. However, I would add that for really small businesses that are < 50 man shops (such as a small electrician's or machinists shop) where it is impossible to get insurance for a reasonable price, proof in the pudding is whether or not health insurance premiums actually go down without government intervention. Everyone has heard about Anthem sticking it to small business owners to the tune of 39% in the last month but w/o some sort of controls in place that practice is bound to be continued. Otherwise government will have to subsidize those with really small operations.


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