MYTH BUSTERS: Small business owners, jobs, and health insurance reform

There’s no shortage of allegations that small business will be hurt by healthcare legislation, as Nancy Duff Campbell, a founder and co-president of the National Women’s Law Center, points out today at Reuters, with: “Women small business owners really need healthcare reform“ (subtitled: We need reform.)

At a meeting of women small business owners in May, Leah Daniels [the owner of Hill’s Kitchen – a gourmet kitchenware store that opened last May not far from the U.S. Capitol] said,

“We went around the room and everyone either had health insurance through their spouse or didn’t have coverage at all. Women talked about being afraid to go to the doctor because they didn’t want to find out that they might be sick. It was really striking.”

Small businesses owners are suffering from the current system. That graduated surcharge that some say is a job killer? Campbell found that only 1.2% of all taxpayers, including 4-5% of those with some business income, would be affected. Not exactly a death-knell for job creation when you examine the spin coming from big insurance companies more closely.

Insurance companies are obviously motivated to protect their profits, which is the fiscal responsibility of any business with share-holders. Unfortunately, nothing about the system provides any incentive for them to control the actual costs or manage the effectiveness of health care.

Here’s another gem from Ms. Campbell’s article:

The healthcare reform plans that have begun moving through Congress would help make it possible for small business owners to offer comprehensive, affordable health insurance. The House plan would make insurance more affordable by prohibiting insurance companies from discriminating on the basis of health status or gender and by allowing small businesses to purchase coverage through a new Health Insurance Exchange. The Exchange would reduce administrative costs and offer a choice of plans meeting minimum benefit standards. New tax credits would be available to help some small businesses pay for employee health coverage; the credit would be worth 50 percent of the cost of qualified health coverage expenses for businesses with 10 or fewer employees and average wages of $20,000 or less. It would gradually be reduced until firms reached 25 or more employees or average wages of $40,000 or more.

Corporate sponsors just may be warping reporting objectivity, or shaping the way producers present the stories by determining whose voices are heard.  Some (if not most) are certainly guilty of echoing quickly debunked fear-mongering, such as the almost ludicrous rumor that changes would lead to euthanasia of the elderly.  Why, one wonders, does that get more air-time than the fact that smaller firms are paying more than big businesses to provide identical benefits to their empoyees?

A new report by the Council of Economic Advisers (CEA) found that small businesses pay up to 18 percent more than large firms for the same health insurance policy. These higher costs mean that small businesses are considerably less likely than larger businesses to provide health insurance to their employees, and those that do tend to have less comprehensive plans.

The answer, it seems, is that special interest dollars are controlling the news, just as they are influencing congress. It’s not surprising that those who benefit from the current system are scrambling to look contrite while striving to protect their profits. It’s not surprising that big business would adopt the Rovian tactics of winning a few key votes here and there to quietly control the outcome.

It isn’t right, though, that millions of dollars each day – collected by big health insurance providers from their subscribers – are being spent for ads and lobbyists in DC instead of to pay for health care. It isn’t right that most of the main stream media is pandering to the big money to preserve their ad revenues, either. There are times when measuring success in dollars just isn’t the right equation.

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