Small Business and Health Care Reform

Small businesses around the country have rallied around legislative measures that would force insurers to accept all applicants and offer government subsidies to low-income workers, they've winced at mandates to provide coverage for every employee or pay a penalty equal to as much as 8 percent of payroll.

“They really want reform, but then there are the ones thinking, ‘How much will this cost me, and will it hurt my business?’ ” said Amanda Austin, the lead Washington, D.C., lobbyist for the National Federation of Independent Business. “It's a little bit of a mixed bag.”

About 70 percent of the small-business owners in California who provide health coverage to workers are straining to continue the benefit, while 86 percent of those who don't blame high premiums, according to a poll published in August by the nonprofit Small Business Majority, a national group based in Sausalito.

In a separate study, the organization concluded that he

Health reform legislation as currently envisioned in Washington could cut small businesses' medical costs by as much as $855 billion nationwide over the next decade.
“The basic framework in D.C. is certainly much more helpful to small businesses than doing nothing,” said John Arensmeyer, founder and CEO of Small Business Majority.
Overall, the small-business community's mixed reactions help to explain why its voice largely hasn't been heard in recent months amid intense debates on Capitol Hill and in town hall meetings nationwide.

Unlike big corporations and generously funded special interest groups, most small-business owners are too busy running their shops, bakeries, salons, restaurants and professional firms to study proposals that fill thousands of pages.
“It's an incredibly complex issue,” said Marshal Scarr, a partner in the downtown San Diego real estate law firm Peterson & Price. “It's hard to know what is the best thing to do, and it's hard to know what is realistic and effective.”

Small businesses, the self-employed and those with fewer than 500 workers number 26.9 million. They employ roughly half of the nation's work force — or more than 60 million people, according to the National Small Business Association.

California had 637,730 companies that each employed fewer than 20 workers in 2006, the most recent year for statistics from the U.S. Small Business Administration. The figure accounted for 88 percent of all companies in the state that year.

Health care analysts generally agree that small businesses have fewer options than large corporations for dealing with ever-rising medical costs, including the ability to use large numbers of potential enrollees as leverage during negotiations with insurers.

Forty-nine percent of U.S. companies with three to nine employees and 78 percent of businesses with 10 to 24 workers offered health coverage last year, according to a July report from President Barack Obama's Council of Economic Advisers.

In contrast, the council reported, 99 percent of companies with more than 200 workers provided health insurance.