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Posted: January 13, 2011

Repeal: the New Year’s resolution Congress should keep

Small business wants it undone

Tony Gagliardi

The ball has dropped and it's a new year, when new resolutions and promises abound. After the gavel drops to mark the start of the 112th Congress, the new leadership in the U.S. House of Representatives is expected to take swift action to deliver on a promise made to the American people: repeal the health care law.

There are many reasons for repeal. The political practicality of doing so should be obvious - if the recent election results weren't enough, December Rasmussen polls show a majority of voters favor repeal. There are also powerful fiscal and economic reasons widely agreed upon by economists on all sides. The path to economic recovery is already questionable and fragile, and should not be put at further risk because of this law.

But one reason for repeal should mean more than others: This health care law is harmful to small business and small business wants it undone.

Small business owners and their employees have already started to feel the negative impacts of this law. Some have had their insurance plans canceled. Others are looking at changing plans because they will no longer be able to afford to meet new requirements.

Worse than the impact small businesses already feel is the anticipation and uncertainty about what is yet to come. The law is so big and so complicated, many lawmakers who supported it have confessed they don't even know what's in it. How can a small business plan?

While the law leaves small business riddled with uncertainty about how these new costs will impact their ability to reinvest and grow their business, there are things that are certain for small business. Without a doubt, the health care law will increase costs, leave consumers with fewer choices and will bury businesses in new requirements.

For example, there is a special tax on the types of insurance plans that small businesses buy, amounting to billions of dollars annually. There is a new IRS paperwork provision that requires small businesses to file a 1099 form for almost every business transaction that totals $600 or more per year.

There are other funny-sounding taxes - like the suntan tax and the Cadillac tax - that aren't funny to small business, instead nailing their bottom line. Worse, each funny-sounding tax and new provision forces small businesses to spend more money on their insurance plans, tax compliance and accountants, and less on creating jobs and growing the economy.

This isn't the reform small businesses asked for, and it isn't the reform that will help them overcome their biggest health care problem: ever-increasing costs. In fact, this law has made things worse than before. In an economy like this, that is a poison pill for businesses trying to get themselves back in the black.

Democrats hold up pre-existing conditions and stricter rules on insurers as reasons for preserving this monstrosity. It's true this law contains some worthwhile provisions supported by Americans, and there is no reason those wouldn't be included in future, more responsible reform efforts. Using those few to rationalize a trillion-dollar program that taxpayers and businesses can't afford makes little sense, though. It's like buying a mansion because you like the door knobs.

Small businesses have been clear all along. They wanted reform that lowered costs. This law didn't do that, instead it added new taxes, fees and mandates. Small businesses are ready to work with the President and Congress to reduce costs and expand access to health care. However, they must first respond to the country's unmistakable demand to repeal the current law.

This is one New Year's resolution that should be kept.
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Tony Gagliardi is Colorado state director for the National Federation of Independent Business. Contact him at 303-831-6099 or via email at tony.gagliardi@nfib.org.

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Readers Respond

As a small business owner for the past 30 years, I have never received anything but very marginal benefits from my health insurance companies. Premium raises have been on the order of 20 percent on year over year basis. I would like to give the government a chance to try their hand at full control of the health industry for, say, 20 years and let the private companies stay with general, professional, car, house, life, etc. By Jere Heavener on 2011 01 16
I too am a small business owner. Unlike Vicki and Annie, I am opposed to the health care law. This law does not lower costs and will likely increase costs. What this law does is shift costs. We will not lower cost by including more individuals into the program because the majority of the people added will through subsidies where they pay little or no premiums for their coverage. You cannot reduce costs by increasing bureaucracy and mandates. Our health care system will likely have to be completely restructured to get back to affordable health care. By John Gimple on 2011 01 13
I, too, own a small business and do not want to see a repeal. Like Vicki said, the insurance companies have ignored the needs of individuals and small businesses for at least as long as the 30 years I have been in business. By comparison to their record, my chances with the government for someone to actually pay attention to our needs look pretty good. By Rob on 2011 01 13
I, like Vicki am also a small business owner and totally agree with her. Here is why: Small businesses that meet certain criteria would be able to purchase health insurance through an "insurance exchange" – allowing them to choose among a multitude of plans that would provide better coverage at lower costs than they could find in the current small group market. # Many small businesses that provide health insurance for their employees would receive a small business tax credit to alleviate their disproportionately higher costs and encourage coverage. The tax credit would be targeted to those firms with employees whose average wages fall below a certain threshold. # The current reform options include financial incentives for medium- and large-sized firms to provide health insurance coverage through so-called "pay-or-play" provisions. Firms with payrolls or employment levels below a certain threshold, which would include the vast majority of small businesses, would be exempt from the pay-or-play provisions. # The creation of an insurance exchange would also provide better and lower-cost options for workers in small businesses that do not offer health insurance. Low-income individuals and families would receive sliding scale subsidies to help them purchase insurance. Additionally, health insurers would not be allowed to screen potential enrollees for pre-existing conditions. By Annie on 2011 01 13
I'm a small business owner. I do not want it repealed. Rasmussin is always slanted to the right; the health care debate has been going on for 40 years, businesses small and large - and the insurance conglomerates - had plenty of time and opportunity to change things "their way" and they never did - and they NEVER came up with their own ideas. So you want to repeal? Then what is YOUR solution? By Vicki on 2011 01 13

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