Bring On the Public Option!
Small businesses, or at least the trade organizations that purport to represent them, tend to be politically conservative. Thus it's not a surprise to see small-business groups attacking President Obama's legislative agenda, including the stimulus package (too expensive), the proposed budget (higher taxes), and the climate change bill (higher energy prices).
From my perspective as a business owner, most of this is much ado about nothing. As a citizen, I have my opinions about what's good for the economy and the country, but none of the above issues really has much direct impact on me as an employer. We're not in an energy-intensive business, we don't enough profits to worry much about the taxes, and we don't see anything in the Obama agenda thus far that will lead to onerous new regulations or otherwise bring on the heavy hand of government.
The one big exception is health care reform. As I've written before in this space, this is the one federal policy issue that has a direct and immediate impact on my company. And as the Washington sausage factory begins to grind away in earnest on health care legislation, I can't say I'm very encouraged.
The hot-button issue for business groups, in general, is the possibility of a mandate that would require employers to either provide insurance or pay a special fee. The proposal recently unveiled by House Democrats includes such a provision, with the fee pegged at 8 percent of payroll (which in fact is about what NewWest.Net pays for the lame health insurance plan we currently offer).
President Obama supports exempting small businesses from any mandate, but the House bill includes only a general nod to this idea without any specifics. Senate finance committee Chair Max Baucus, the pivotal legislator in that chamber, indicated last week that he was not in favor of such an exemption, preferring to help small businesses via tax credits.
Assuming that an employer mandate is eventually part of the package, I'm sure there will be a vigorous debate over any exemptions and who is small enough to qualify. All other things being equal, I would prefer not to have a mandate (even though we already do voluntarily what the mandate would require).
Yet I would not necessarily be opposed to a mandate if it were accompanied by reforms that enabled my employees to get decent insurance on their own. Frankly, I would prefer to pay 8 percent of my payroll to the government and get out of the business of providing health insurance, which after all has nothing to do with my real business.
This is actually one of the central quandaries of health care reform: If you make it possible for people to get reasonable insurance individually, you create an incentive for employers to drop their plans. That, in turn, threatens to increase dramatically the cost to the Treasury of any plan that aims at anything approaching universal coverage.
But the fact remains that there is little economic logic in forcing companies to provide health insurance. It distracts them from their principal mission, it gives large companies a big advantage over small companies (big companies can leverage economies of scale to reduce their per-employee costs), and it introduces friction in the job market by creating an external incentive not to change jobs.
At the same time, the bitter Republican opposition (which includes at least some small-business groups) to a public option-i.e., a government-backed health insurance program that would compete with private insurers-seems to be based less on economic logic than ideology.
It's just too easy to imagine we'd end up with a healthcare system run with the efficiency of the Post Office and the compassion of the IRS, at Pentagon prices, says the National Federation of Independent Business Web site.
Surely, though, nothing better fits that description than the current private health insurance system. (And, notably, both Social Security and Medicare are actually quite efficient, if not necessarily compassionate.)
I can certainly understand why the insurers, drug companies, doctors, and other medical providers would oppose a public option; it threatens to reduce their ability to set their own prices. But as a health insurance customer, my sympathy is limited.
In fact, I'd go so far to say that, in my experience, if there is one entity that's more frustrating to deal with than the IRS, it's the insurance company that, as a matter of policy, seeks to defraud its own customers by systematically denying legitimate claims. If the government can cut through this and help get my company out of the social services business, I say bring it on.