Small businesses are among the groups hit hardest and left most vulnerable in our current health insurance system. Yet, the small business community has been almost uniformly typecast as down on reform. So goes the conventional wisdom. But is it true?
This is not solely an academic question. Where small business stands on health care is critically important to the prospects for meaningful reform in 2009. As the debate over reform heats up, a whole lot of people – from Members of Congress to the media to the public – will be looking to hear from small business owners to find out where they stand on health care.
Rather than stand around and pontificate about what small business owners are thinking about health reform, we decided to go out and ask them. To get a beat on small business owners’ priorities, we conducted a survey project in 2008 where organizers in twelve states around the country went door to door, got face to face with local small business owners, and surveyed them about their experiences with health insurance and their perspectives on different reform proposals.
Today we released the results in a report titled Taking the Pulse of Main Street: Small Businesses, Health Insurance, and Priorities for Reform (available online at http://mainstreetalliance.org ). The report addresses a series of key questions, like: what kinds of reforms do small businesses want in health care? Are small business owners willing to contribute… if so, how much? And, what role should government play?
The results outlined in this report challenge the conventional wisdom in three arenas:
Willingness to Contribute: When asked if they’re willing to contribute for health coverage for their employees, more than two thirds (73 percent) of small employers said yes. Furthermore, 63 percent of small employers indicated they would be willing to pay 4-7 percent of payroll or more to guarantee quality, affordable coverage for themselves and their employees.
Support for a Public Alternative: When asked to choose between a proposal with a public insurance alternative and a proposal with more private market choices, small business owners chose the proposal with a public alternative by a margin of more than two to one (59 percent to 26 percent, with 14 percent undecided/other).
Role of Government: When asked about public oversight and the role of government, small business owners more public oversight of the insurance industry by a margin of almost six to one (75 percent to 13 percent), and support for a stronger government role in guaranteeing access to quality, affordable health coverage by a margin of over four to one (70 percent to 16 percent).
These findings may sound surprising because they challenge the conventional wisdom, but really they make a lot of sense. Small businesses have been caught between a rock and a hard place on health care for a long time, and it’s only getting worse: businesses with less than 25 employees that offer coverage have seen their average costs for health insurance grow to 11 percent of payroll as of 2005. Their median cost of health insurance relative to payroll rose by 43.5 percent from 2000 to 2005.[i] At this point, the cost small businesses can’t afford with health care is the cost of doing nothing and allowing this trend to continue. Small business owners are willing to pitch in their fair share – they just haven’t been offered anything that delivers good coverage and decent value.
That’s where the next point comes in. Small business owners are tired of being held hostage by private insurance companies that treat them like a captive audience, jacking up rates every year and refusing to cover claims at their own whim. Small business owners recognize that the only way to stop this routine hostage-taking is to create a public alternative that gives those who are tired of the industry’s game another option. That means government is going to need to step in and play a role.
The issue of health care for small businesses is ever more important now, in the face of the economic recession. Small business holds the promise to create jobs, help revitalize the economy and bring us out of the recession. But to clear the way for fulfilling that promise, we’ve got to fix this health care mess, and do it right.
To sum up the beat we got from Taking the Pulse, in 20 words or less: small business owners want real health reform, are willing to contribute, and want a quality public alternative to private coverage. Move over, conventional wisdom, because small business is ready to ante up to make real health care reform happen in 2009.
Sam Blair is the Director of the national Main Street Alliance, a new network of state-based small business coalitions giving small businesses a new voice on the issue of health care.