Florida health care ruling ignores small business needs
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.