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Posted: February 17, 2011

Florida health care ruling ignores small business needs

It's not perfect, but it's a good start

John Arensmeyer

A federal judge in Florida recently ruled that a key provision in the Patient Protection and Affordable Care Act, our nation's new healthcare law, is unconstitutional. The chief issue in Judge Roger Vinson's ruling deals with the requirement that all individuals must have health insurance, often referred to as the minimum coverage provision.

While this ruling grabbed headlines and created new material for spin doctors and pundits, it did nothing to help the millions of small business owners suffering from the skyrocketing cost of health insurance. So let's set the record straight: the Affordable Care Act isn't perfect, but it undoubtedly passes constitutional muster and has many provisions that will bring meaningful financial relief to millions of small businesses across the country.  

Small businesses pay 18 percent more than large firms for the same health coverage, yet receive fewer benefits. As a result, small businesses are less likely to offer insurance to their employees, and therefore are less able to compete for the most talented workers in the workforce. The Affordable Care Act lowers healthcare costs through a number of provisions, including tax credits, health insurance exchanges and various cost containment measures. By cutting the cost of insurance, the Affordable Care Act will reduce small business expenses, thereby enhancing their ability to compete with large firms. The new law increases small business owners' ability to pull from our highly skilled workforce and attract the best recruits because they'll finally be able to afford good benefits for their workers. 

The numerous cost containment provisions that will drive down healthcare costs across the entire system include funds for medical malpractice reforms and crackdowns on Medicare waste, fraud and abuse. With fewer system-wide expenses, small business owners will see premium costs fall. Through provisions like small business tax credits, even more financial relief is on the way for our nation's entrepreneurs. And with the creation of state health insurance exchanges-online marketplaces where small business owners can shop around for health insurance-more choice competition will be extended to small employers, allowing them to spend less on insurance bills and more on business investments and job creation.  

Another critical issue that affects small businesses' premium costs is the "hidden tax" associated with the uninsured. The uninsured often delay treating their health problems until they become severe, and public and charity programs pick up a share. But most of this cost is never paid. To cover the cost of this uncompensated care, health providers charge higher rates when the insured receive care, and these increases get shifted to consumers and small businesses in the form of higher premiums. Without the minimum coverage provision, this tax would continue driving up small business owners' costs until insurance is completely out of reach.

While Judge Vinson's ruling has spawned tremendous debate over the constitutionality of the new law, it has done nothing to address the consequences of maintaining the status quo. Our research shows that without reform, skyrocketing healthcare costs would have a severe strain on small business profits, wages, jobs and the small business workforce. But let's examine its effect on a more personal level. Take, for example, the story of Louise Hardaway, a would-be entrepreneur in the pharmaceutical products industry in Nashville, Tenn.

Louise had a great idea and wanted to put it to good use, yet had to give up on her dream of starting a small business after just a few months because she couldn't get decent healthcare coverage-one company even quoted her a $13,000 monthly premium. Imagine the number of people Louise could have put to work if health insurance costs hadn't stood in her way and the positive impact it would have on her local community. The status quo kept small employers like Louise from performing their role as the nation's primary job creators, and repeal would force them to stay there. 

And lastly, the new law addresses the issue of productivity. The minimum coverage requirement will increase small employers' productivity by keeping their workers healthier and reducing the amount of employee time lost to serious illness or injury. Simply put, when the frequency of workers getting sick from lack of quality healthcare drops, productivity improves. Since small businesses represent 99.7 percent of all employer firms, pay 44 percent of the total U.S. private payroll and have generated 64 percent of all new net jobs over the past 15 years, their increased productivity will reverberate throughout our entire economy.

America's small business owners and entrepreneurs have seen firsthand the devastation the pre-reform healthcare system wreaked on our economy. They don't want a sequel. Repealing the law isn't a practical way to fix the problems they face. The way to really help small businesses and our struggling economy is to focus on smooth implementation of the law. Then we can all get back to business.
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John Arensmeyer is founder and CEO of Small Business Majority, a national nonprofit organization founded and run by small business owners. Contact John at or 866-597-7431

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Readers Respond

While ColoradoBiz encourages debate, we would appreciate a dialogue that respects the writers and commenters. Please refrain from personal attacks and crude language. We have published op-ed pieces from those who oppose the health-care reform plan. We welcome varying viewpoints. We devoted a major story in our upcoming March issue to the aftermath of health-care reform. Mike Cote ColoradoBiz editor By Mike Cote on 2011 02 17
No kidding, another poster here replied that opinions are something that should be published which I agree with, but he must have deleted it. opinions are okay. LIES AREN'T By John Wray on 2011 02 17
I'm simply disappointed in Colorado Business distributing this dishonest piece of excrement by a partisan hack. The link will now be echoed in every left leaning blog with the credibility of Colorado Business used to spread his lies. By Robert White on 2011 02 17
Thank you John, Jawaid, & Sharris for your excellent, professional responses to this article. The ideas espoused by Mr. Arensmeyer reveal a bias hidden behind a title that appears to add creditability to his position. The art of deceit is to sound as creditable as possible without actually telling the truth. The truth of this law is well stated by you all. Colorado Biz Magazine I too challenge you to require a greater degree of disclosure from the authors you publish. By James Marsh on 2011 02 17
John Arensmeyer; Please chime in. Stand up for what you believe or take the opportunity to retract your position. Clearly myself and the others that have responded to your article do not support your position or findings. We are small business owners that you profess that you represent, but we proclaim that you do not represent us and are off base in your statements. Tell us where you sit and where you stand. Disclose your special interests. Tell us who are your Members and who you represent. State your arguments against Justice Vinson's rulings and why he is wrong. Provide details of the "...many provisions that will bring meaningful financial relief to millions of small businesses across the country." I would really like to know how you plan "smooth implementation of the law" that Mandates me and my small business to purchase something I don't want to purchase. By smooth do you mean that the Gov't should say "Please" or that the DMV and IRS should become more friendly and helpful, or that we should pass some more waivers to donors, activists and unions? I look forward to your reply. CoBizMag - ColoradoBiz, we'd sure like to hear from you too! By sharris on 2011 02 17
I'm just glad that this polital hack didn't get away with this here. I'm quite proud of the posters here. Colorado is great and not easily scammed By John Wray on 2011 02 17
Don't even get me started on the crass political cronyism that is evident with ObamaCare, either. Hundreds of giant corporations have received special waivers, exempting them from the law. Most of these are labor unions, bailed out companies, and other Democratic donors - folks, this IS Chicago politics brought to Washington. Doling out special favors, special exemptions from the law, in exchange for campaign cash. Exactly 0 small businesses have received ObamaCare waivers. And the worst part is - it's all ad hoc. There are no rules for who gets a waiver. There is no documentation of any process that was followed to make the decision. It's just Kathleen Sebelius and her friends, they choose, we're all left scratching our heads. Congress doesn't even know on what basis these waivers are being handed out. This is an example of total, absolute power, wielded arbitrarily. That is not America. That is a dictatorship. By Jawaid Bazyar on 2011 02 17
Sharris and Tom, you guys are awesome. I read your link to Kansas and this is a total SCAM. I knew that his numbers about small business HAD to be bogus. He's a BIG TIME contributor to Obama and a con artist. I'm glad that he was exposed here and suggest that Cobiz REQUIRE him to post a disclaimer AND the truth about his phony "organization" or I'll lose some respect for a publication that I usually respect. By John Wray on 2011 02 17
John Arensmeyer's "Team" is made up of speakers, bloggers, administrative clerks, political website writers, none who have ever manufactured or provided a product to industry and commerce. Like a professional politician, he and his staff has no clue of what it is like to operate a small business and are out of their league when the speak as if they do. His group (Small Business Majority) is made up of Democratic Obama Cronies, political activists pushing for health care and representing that they stand for small business. I hope John discloses that he does not represent my small business and that whatever his Special Intrests are, that they are not consitant with the majority of small business owners and are not in the best interest of most small businesses. By sharris on 2011 02 17
way to go Tom; As I posted earlier, I was suspicious of this article AND the writer and especially the motives. If we don't confront this sort of political "info" they we get what we ask for. By John Wray on 2011 02 17 This group (Small Business Majority) admits that it has NO membership! By Tom on 2011 02 17
two better answers than mind. Way to go guys By John Wray on 2011 02 17
I *strongly* disagree. Do you know what is even more important than a temporary convenience? A nation of laws, and not of men, a country where the government is strictly limited. If, as its authors and defenders claim, the Constitution is "confusing" and provides no limits whatever on Congressional action, then it's all over. Congress might decide tomorrow to nationalize businesses (oh wait, that has already happened). The so-called "health care" law may be many things, but it has nothing to do with health care and is a knife in the heart of business, by attacking the very notion of the rule of law. The use of brute compulsion, literally forcing individuals to purchase a product they may not want? That's a "good start"? From day one, the government has tried to micromanage the health care system and detach it from reality. The market didn't fail -- it was never tried. There has never been a free market in health care or insurance in modern times. What would be a good start, would be to free the health care system from government strangulation. Regulation heaped upon requirement mixed with price controls - and everyone acts surprised when the system fails and suffers from hyperinflation and then has the gall to say the free market has failed? Really? Finally, it's NOT good for my business, or for any business, to get a big government subsidy, and it disturbs me when business leaders such as ColoradoBiz magazine say to just take your tithe and live with the system. We need to compete -- fairly -- for resources, customers, employees and capital. Only then will we achieve the best results through our thinking and labor. What we are headed for, however, is a socialist feudal state where individuals are beholden to companies and companies to the government, and we will all be taking marching orders from bureaucratic elites in Washington. A world where politics, not value, will rule the day. Nothing could be further from what our Founders intended - and that is why the Florida court ruling voiding the entire ObamaCare law is a good start. After that, we need to free the rest of the system from politicians. But one step at a time. By Jawaid Bazyar on 2011 02 17
So John, basically you are saying that we, as small business owners, should sell ourselves out, forgo our constitution, allow the Federal Government to dictate what we must purchase, all in the interest of "financial relief". Allow us small business owners to operate in a free market without government control. I suggest you more closely read Justice Roger Vinson's ruling. Let the free market operate without Federal Mandates. The current health reform act will drive those of us still in business that much closer to shutting our doors, costing millions of jobs. As a nation, we cannot afford this program and that will cost more than millions of jobs, it will destroy our businesses and liberties. Stay out of my business, Uncle Sam. I'm doing fine without your involvement. If you must be involved in health care, scrap your health care bill and start over with one that we can afford and that doesn't dilute the best health care in the world. John, the bill is not only unconstitutional, but it will do nothing to improve health care. It addresses health coverage at the expense of those of us that already choose to pay the high rates. The result of the current health care bill will be a disaster to all business. Why do you want to implement a flawed and unconstitutional bill with federal mandates on every US citizen? By sharris on 2011 02 17
btw, the MAJORITY of doctors in rural Colorado are NOT accepting medicare patients. The government cannot force them to and as it is, they have to add two clerks just to process claims. I guess that's a sort of job incentive, but as usual it's caused by the government. I'm not kidding about rural doctors; we're in serious trouble there and when I can pay less for hc by paying the "penalty", why wouldn't I, which (as my employees know)FORCES them to buy into the government pool as our administration very well knew. They couldn't get single payer one way, so they'll get it another. This seems to be their modus operandi By John Wray on 2011 02 17
I don't see a JD after your name, so I'm not quite sure how you "decided" that the law was not unconstitutional, when it clearly IS. (I DO have a JD after my name) In any case, this bill did NOT help small business for a long list of reasons. "It isn't perfect" is perhaps the understatement of the century. My employees figured it out before I did and THEY don't like it. It would take me a book to respond, but if your group represents small business as you say, then you need to talk to some real small businesses. Why haven't I ever heard of you. I HAVE heard of NFIB and they DO poll their members and they don't like it. hmmm I wonder why you have such bias because you certainly have it. I'd have to check out your organization but it doesn't seem worth the time By John Wray on 2011 02 17

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