By MATTHEW HOLT
Let’s be honest–I absolutely abhor the so-called National Federation of Independent Business (NFIB). It’s not a representative business group. In 2004 95% of their members said they voted for Bush, compared to 53% of all small business owners. (Remember that election was 50–50) Nonetheless, the first line of the recent NY Times article on NFIB joining the Republican Attorneys-General lawsuit on the individual mandate is that they’re trying to depoliticize the “largely Republican assault” on the new health care law. Ha, bloody ha.
But I’m not grumpy that the NFIB is joining this pointless lawsuit. I’m grumpy that they’re so blatantly going against the interest of small businesses. And yes I run one! So to remind you how stupid the NFIB is (in global not political terms) I’ve reprinted an article I wrote on Spot-on back in 2006–-and sadly nothing has changed. (The great thing about being a relatively veteran blogger is that I can really recycle material!)
* * *
Small Business Shock-troops That Can’t Do Basic Math
Long ago, back in 1994 when Democrats walked freely in Washington, an outfit called the National Federation of Independent Business (NFIB) took a large role in overturning the Clinton health care plan and, consequently, a supporting role in the Republican Congressional victory later that year. And in health care policy, as they say in the movies: They’re baaaaaack.
Now, The NFIB is a narrow-(minded) interest group like any other; typical of any Washington trade association. But in health care it’s policy involves cutting off its nose to spite its own face and doing so with a rather dull knife.
You may know the NFIB from the write-up it got in New York Times last week explaining what a crack set of political storm-troopers it was made up of. It’s not only health care; these guys are mad as hell about inheritance taxes. The article shows how politics like this works—provided of course you can fool enough of the electorate (or rig the voting and legislative districts sufficiently) to get your lapdogs into power.
Passion was strong over the estate, or inheritance, tax, which the federation calls the “death tax.” It was repealed temporarily but will be coming up for a vote in Congress, perhaps in May, to decide whether that repeal will become permanent.
The NFIB has led the battle to maintain the end of the estate tax–they call it the “death tax” even though 100% of Americans die and only 3% of American pay estate taxes. In addition the Democrats tried everything when they opposed it going away. They conceded that the original $650,000 limit need to be updated and they even offered to exempt family farmers; No dice. The Republicans kept on and on about family farmers having to sell out, when they couldn’t even produce one family farm that had to be sold because of estate taxes. The limit is now $2m and in 2010 it goes away altogether. Until 2011, when it all comes back unless the tax cuts get extended.
I, for one, am delighted that my kids will have to pay more tax so that the Wal-Mart grandkids can have even more money than the unspendable amounts they already have.
Perhaps they’ll have more room-mates to pay to do their college work. And yes, the kids of most NFIB members will pay more too, despite the fact that they were part of an alliance of front-groups funded by some of the richest families in America (including the Walton kids) to persuade Congress to abolish the tax.
But even if only some NFIB members would have to pay the estate tax, (or rather their kids would) at least it’s something that pure unmitigated greed makes them (and I guess all of us) hope they’d have to pay; and therefore want to see abolished. So it sort of makes sense that they’d get so upset about it. Their health care policies, on the other hand, show that they’re just more conservatives who can’t do basic math.
According to these charts on their web site, something around 50% of NFIB members have fewer than 5 employees and 50% have gross receipts below $350,000. So it’s fair to suppose that the typical NFIB-type business looks a more lot like the San Francisco restaurant that was featured a while back with some $60,000 in revenue per head, than Intel, where each employee brings in over $300,000.
About half small business offer no health insurance. Most of the uninsured work for a small business or a big business that pretends it’s not one (like the big fast food chains). There are only three real options for the future coverage of the uninsured. Leave them alone, and deal with the consequences of uninsurance. Or force employers to offer insurance. Or have the government provide it (as it does for seniors, its employees, Veterans, the very poor, members of Congress, etc). What does the NFIB then say?
NFIB knows that no one solution will help the 45 million uninsured Americans cover health-care costs, but a multi-faceted approach will allow millions more to find health care at costs they can afford.
OK. They’re lying about the “no one solution” as we all know that several different universal insurance proposals (and foreign countries) do exactly that. So what does NFIB want?
First, tax breaks for health savings accounts (HSA) – those set-asides that let you save on taxes if you put money in a “health IRA”. They, not by coincidence, make it cheaper for those with the means buy medical care while making it more politically palatable for employers to “offer” high-deductible health plans to their employees. Second, NFIB supports insurers in their quest to offer Association Health Plans (AHP—they keep changing the name, but I’m sticking with the AHP acronym for now) which aren’t subject to state regulations and oversight, as are current insurance plans. (Most large employers’ plans are Federally-regulated and also have great lee-way in what they exclude, although most large employers don’t push the envelope much on that). In contrast most AHPs will likely offer stripped-down benefits and underwrite their prospective beneficiaries so that sick people (or employers with disproportionately sick employees) can’t access the plans. That means that these plans could be relatively cheap and as a result of having no sick people, very profitable for insurers. It’s not a coincidence that these very sort of plans tend to attract fraudulent insurers since state regulators have trouble reaching beyond their borders, and no one’s really in charge of them at the Federal level.
But here’s another problem that NFIB is overlooking; one that speaks to the heart of what the organization might represent if it weren’t just a cover for trust fund babies interested in lower tax rates. It quashes the very entrepreneurial spirit that Republicans – even conservatives – say they support. Why?
The prime reason that people stay either in their jobs or in their state is because they can’t take the risk of being re-underwritten in the individual insurance market. That means they are less likely to be starting or working for a small businesses. Meanwhile, the insurance system that does exist—and the existence of the uninsured—has caused the cost of US health care to be the most expensive in the world. And that expense is even higher for small employers who have to pay for the costs of the broker distribution network that sells said insurance. AHPs won’t change that underlying cost structure, and won’t do much to change the fact that most low income jobs at small businesses don’t offer insurance.
There’s a solution, of course: A tax-based national health insurance system. Taxes, instead of being a flat fee per employee, are usually proportional to revenue, or even (in the case of sales taxes and personal income taxes) unrelated to businesses at all. The only possible complaint that a small business owner could have about such a system is that it might make their personal income tax go up. Their businesses would become much more profitable because they wouldn’t have to pay health care premiums for their employees. And even if they were already paying premiums, the resulting change would be a wash financially, but they’d in addition save the dollars they’re spending on the HR function of managing their employees health insurance.
Small business – you entrepreneurs out there – and, of course, the NFIB should get behind one of the tax-based health proposals. Otherwise, it’s going to be pretty obvious, pretty soon, that the NFIB is using the political muscle and social appeal of its small businesses (entrepreneurs are chic, no?) to help a tiny minority of its wealthier members who had the intelligence to choose their grandparents well.
Of course that wouldn’t be the first time that the NFIB’s been involved in something this disingenuous, as their alliance with the super-rich on the estate tax issue showed. I just wonder how long it’ll take their members to figure it out.
Matthew Holt is the founder and publisher of The Health Care Blog and still writes regularly for the site
Categories: Uncategorized
So here it is 2014, and everything that the detractors of ObamaCare said would happen is happening. including the NFIB. Are you ready to retract your statements?
” .. I’m curious…does the NFIB have any INDEPENDENT research ..”
For those who read — we know Mason-Dixon polling is one of the top regional pollsters, quoted by CBS, NBC and NYTimes during “Super Tuesdays.” Not some OWE-bama front, like Media Mutters, KOS or Soros.
How’s that Google search going?
“I have yet to meet a single small business owner that likes these bills, and I see hundreds of them.”
Yes, same here. What authentic small business says about OWE-bama cannot be printed in a family newspaper. And, as Arlen Specter discovered, will be in full-bloom on Nov. 2.
OWE-bama applied to NFIB
1. O: “I will change NFIB.”
2. (Nothing — except tens of millions filing lawsuits AGAINST OWE-B)
3. O: “I have changed NFIB.”
Not.
I’ll take that back, Matt supposedly likes these bills but then again he also thinks an AHP bill that eliminates carriers is going to make carriers rich so his judgement is questionable.
“Reform by the way, offers tax credits for employers with 25 or fewer employees. Something you would think the NFIB would be behind.”
Actually Gridlock no they shouldn’t If you own a small business this tax credit is counter to every basic principal. First your average wage needs to be below 50K, so much for paying workers a good wage if your successful. In order to get or not lose credit you might have to cap employee salaries which could limit your ability to hire the employees you need.
Next it starts phasing out over 10 employees and goes away completly at 25. I might be mistaken but I thought we had record high unemployement?????? Only a democrat would pass this and another bill that penalises people for having more then 50 employees at such a time. What do you think a small business with 24 for 49 employees is going to do? That one extra employee could cost 10s of thousands in tax credits or force you to spend hundreds of thousands on insurance. The bill is anti growth something NFIB is not.
I have yet to meet a single small business owner that likes these bills, and I see hundreds of them.
” .. I’m curious…does the NFIB have any INDEPENDENT research that they could point us to regarding small business owner politcal positions?”
Heard of Google? Look it up, yourself.
I SUPPORT NFIB!
Small business hates OWE-bama “reform” a.k.a., MORE TAXES. Get used to it.
Interesting comments Frank. Especially as Obama has LOWERED taxes for the majority of Americans.
Reform by the way, offers tax credits for employers with 25 or fewer employees. Something you would think the NFIB would be behind.
I’m curious…does the NFIB have any INDEPENDENT research that they could point us to regarding small business owner politcal positions?
” .. a new report by the Arizona PIRG ..”
PIRGs were started by Ralph Nader. Res ipsa.
Small business hates OWE-bama “reform” a.k.a., MORE TAXES. Get used to it.
“Thats not universal though is it?”
The service is universal. The quality is not uniform. Health care will not be either, no matter who supplies it.
Margalit. Did you read this part of my post?
http://www.arizonapirg.org/news-releases/smart-transportation/smart-transportation/new-report-misplaced-highway-spending-to-blame-for-crumbling-roads-and-bridges
“According to Road Work Ahead: Holding Government Accountable for Fixing America’s Crumbling Roads and Bridges, a new report by the Arizona PIRG Education Fund, across the nation, drivers face more than 90,000 miles of crumbling highways and more than 70,000 decaying bridges.”
Police and fire protection is adequate in most places, outstanding in a few others and pretty lousy in poverty ridden neighborhoods.
Thats not universal though is it?
NFIB-funded study about its relevance to small business (conducted by Mason-Dixon polling)
http://bit.ly/c1BMqT
Conclusion
No important differences exist between
NFIB and small business in policy
– NFIB can safely assert that the views it
expresses on issues are the same as the
population’s
Nate (and Practice Admin), reading your comments one could easily surmise that this country is going to hell in a hand basket. It is not.
Defense may be wasteful and used unwisely by politicians, but it’s the best in the world, both equipment and people.
Police and fire protection is adequate in most places, outstanding in a few others and pretty lousy in poverty ridden neighborhoods.
Education is decent most everywhere, excellent in places and horrific where people are poor.
Roads and bridges look good to me, and I just recently drove over 1000 miles over multiple state lines (picked up a new puppy). The only broken roads I saw where the ones under construction with big ARRA signs on them. Granted, in poor neighborhoods the roads are full of potholes and in general disarray.
I expect universal health care will exhibit a similar pattern.
Want to fight the real enemy? Fight poverty.
Matt,
Do you abhor labor unions as they don’t even come close to representing their constituents? Or is it ok in that situation? NFIB is voluntary, if a small business doesn’t like their stance they can drop out, unlike labor unions in most states. Just curious if it is really the practice you abhor or the side they chose to support.
“In contrast most AHPs will likely offer stripped-down benefits and underwrite their prospective beneficiaries so that sick people (or employers with disproportionately sick employees) can’t access the plans.”
Curious claim Maggie, er Matt, what do you base this on? Your narrative or did you get an advance copy of secret AHP benefit summaries. Call me thick but wouldn’t a good start me to look at existing AHPs to see if they do in fact offer stripped-down benefits and underwrite prospective beneficiaries so that sick people can’t access the plans? Having actually worked with a number of these I have never seen what you claim is likely to happen. Now I know reality doesn’t mean anything when you have your likely going but all the same it needs mentioned.
Most AHPs I have seen and most laws usually require they be sponsored by an association formed for other purposes then insurance. They further require that all members of said association be allowed to join. So this seems to be one of those cases, should we call you Eric Holder?, where if you would actually read the bill before climbing on your soap box you would know your totally off base. It was Eric Holder who hadn’t read the AZ immigration bill before bashing it wasn’t it, its such a common flaw in Liberals I can’t remember which one it was. For any shortcomings conservatives have in Math Liberals ability to read seems to be far worse.
“That means that these plans could be relatively cheap and as a result of having no sick people, very profitable for insurers.”
Matt…what in the hell are you talking about? AHPs aren’t insured, the entire purpose of the AHP bill is to allow associations to self fund, self fund means no insurers except for a very small commodity bit of reinsurance. You have officially entered Ezra Klein/Maggie Maher accuracy here. Take some of those THCB millions and hire an editor and couple researchers. LOL very profitable for a non existent insurer, no wonder you get worked up, all these imaginary boogey men out to get you. You should introduce your profitable AHP carrier to Ezra’s sexist HSA plans, they could go on play dates to never never land and ride unicorns together.
“The prime reason that people stay either in their jobs or in their state is because they can’t take the risk of being re-underwritten in the individual insurance market.”
Where was I when you first wrote this? Damn this is some terrible stuff. Matt, look out your window, you live in CA correct? Have you never heard of CalChoice? Small Group reform? None of this rings any bells? You have underwriting margins of .9 to 1.1. So anyone starting a business is not only guaranteed their business can buy insurance but at most it is only 20% more expensive then the healthiest group. Seems to blow that entire argument of yours away. In NV any company that joins the chamber can join their health plan guarantee issue. Opps your story doesn’t work their either. In fact I can’t think of a single state where your right, if you can find one please let me know.
“Universal Health Care is no more Socialism than universal defense, universal police & fire protection”
Wow are you shelltered Margalit, if my memory serves there are more volunteer fireman then paid fireman. doh there goes universal fire protection. Not sure what you think universal police is but there are plenty of parts of this country with no police presence, we are all subject to laws that would eventually be enforced by police from somewhere but the entire country does not have police responce in 5 minutes or 50 minutes.
Universal defence, besides being the only one actually called for in our constitution, is also quesitonable, anyone living on our border to the south would question where it has been.
“starving the beast”
Are you being serious?
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200
Oh Practice Admin, you’re a classic case. Let’s run government into the ground, spend years “starving the beast” and then use its failures as an argument to kill it. I’m sure that it all makes a lot of sense in your mind…. and the world is full of folks like you caught in the steel trap of their own closed minds.
“I would argue that your post simply proves the point that healthcare reform at the hands of the federal government is and will be a total disaster whether you believe it resembles Socialism or not.”
Leaving it the way it is, is a better solution? Exploding cronic illness from a high fat, high sugar, low exercise culture and an aging population demanding they live forever dooms any system that is willing to pay the highest prices in the world.
“Our defense department is always over budget, wasting billions of dollars a year on outdated, behind schedule, unusable equipment and “police actions” across the globe with very few reasonable or tangible positive outcomes.”
That’s because it’s a jobs department, not a defense department. Who screams the loudest when cuts are made – local politicians, business and citizens.
“Our police departments are in disarray around the nation, especially in large cities.”
How much would you pay to increase police forces and jail sizes in a system that is clearly not working? “The United States has the highest documented incarceration rate in the world. The U.S. incarceration rate on December 31, 2008 was 754 inmates per 100,000 U.S. residents. The USA also has the highest total documented prison and jail population in the world.”
“Public education is failing as I write this response. Some public high schools cannot even graduate 50% or better of our high school seniors.”
Schools have been burdened with the idea that they solve every social issue while not receiving the extra funding to carry this out. The private/magnet schools that do the best provide low student/teacher ratio and get their cherry picked students from motivated parents motivating their kids. Do you want to pay the property taxes necessary that give all schools these things?
“And best of all is roads and bridges!”
Would you support an increase in the gas tax to pay for this? No one wants to pay, they all want the funds to come from someone elses taxes while wanting the freedom to drive their cars anywhere, anytime, any place and not support public transportation.
The government is failing because it reflects society.
“Universal Health Care is no more Socialism than universal defense, universal police & fire protection, universal education and universal roads and bridges.”
I would argue that your post simply proves the point that healthcare reform at the hands of the federal government is and will be a total disaster whether you believe it resembles Socialism or not. Our defense department is always over budget, wasting billions of dollars a year on outdated, behind schedule, unusable equipment and “police actions” across the globe with very few reasonable or tangible positive outcomes. (I do not blame our valiant and courageous service men and women, just the federal government’s mismanagement and waste.)
Our police departments are in disarray around the nation, especially in large cities. Low morale, dangerous situations, and a revolving court system that fails to protect and support our protectors. Fire service faces the same problems. Dangerous work, long hours, mismanagement of funding, and in some cases like mine, we are required to pay extra for fire protection for our homes above our taxes. Fire service is not universal if the city dwellers get fire protection free and county residents outside of the city limits pay extra.
Education! You must be joking. Public education is failing as I write this response. Some public high schools cannot even graduate 50% or better of our high school seniors. Elementary and junior high seems to be nothing but field trips to the Mall for lunch and a few “feel good” lesson plans per year to keep the parents happy and “believing” that public education is working.
And best of all is roads and bridges! I gather you don’t travel often. The entire length of 95 in South Carolina is one giant patch of pot holed asphalt surface with just 2 lanes servicing hundreds of thousands of vehicles. Bridges from Florida to Ohio to New York to the Midwest are rusty or rusting. Most need immediate repair or replacement.
http://www.arizonapirg.org/news-releases/smart-transportation/smart-transportation/new-report-misplaced-highway-spending-to-blame-for-crumbling-roads-and-bridges
“According to Road Work Ahead: Holding Government Accountable for Fixing America’s Crumbling Roads and Bridges, a new report by the Arizona PIRG Education Fund, across the nation, drivers face more than 90,000 miles of crumbling highways and more than 70,000 decaying bridges.”
So, tell me again why you believe a Universal Healthcare Plan orchestrated by the same federal government who has mismanaged and virtually destroyed the above mentioned services would finally get it right this time???
The estate tax point goes to the credibility of this organization, thus it is pertinent to the conversation.
Universal Health Care is no more Socialism than universal defense, universal police & fire protection, universal education and universal roads and bridges.
Is there a particular reason for singling out one universal service from the others as being the end of freedom as we know it?
You do make a few good/logical points. However, your tax more theme and request for a Universal Health system is socialism at its finest. Yes the NFIB does poison the well, but so do these leftist viewpoints. A moderate approach of reforming the insurance companies and an affordable COBRA option is more acceptable for all involved. One more thing the estate tax has nothing to do with this debate. Please save your leftist views for another site.
hello…i just read your article and realy its very fine and informative …thanx for sharing
As a layman who has followed the health care reform debate going on two years now I am still waiting for clarification of a few basic realities.
1. PROFESSIONAL COMPENSATION IS NOT THE SAME AS PROFITS. What doctors are paid is different from what corporations report as profits. Unfortunately, the corporate view is that professional compensation is an “expense” (and a drain on profits) but for doctors the same amounts are how they earn a living.
2. HEALTH CARE IS FURNISHED BY MEDICAL PROFESSIONALS, NOT INSURANCE COMPANIES. Most people wrongly believe that health care is provided by insurance but the mission of insurance is to manage the costs of medicine, not medical efficacy.
3. TWO KINDS OF RISK MANAGEMENT ARE CONSTANTLY BEING CONFLATED: MEDICAL risks (expertise of medical pros) and FINANCIAL risk (expertise of actuaries working as insurance pros).
Universal health care should mean the end of cherry-picking for medical pros and insurance companies. It won’t, of course, because we live in a free country and will always have boutique doctors and insurance policies in the same way that we have high-end retail shops, private clubs, gated communities and chauffeur-driven transportation. The sooner the shakeout, the sooner the dust will settle.
Meantime, professionals, both medical and insurance, need to get over thinking they have the whole market to themselves. Insurance companies and medical providers are now in the position of the Allies after WWI and WWII. It’s time to divide the spoils and get on with what comes next. It’s sundown time for cherry-picking.
And patients (remember them?) need to understand there is a limit to what medicine can and cannot do. But those limits are two-fold: medical (what is scientifically feasible) and financial (what can you afford?).
And the tough part is this: it’s up to BOTH MEDICAL AND INSURANCE PROFESSIONALS TOGETHER to speak these hard truths to their patients/clients. Those who imagine that political types will do so are living in a fool’s paradise.
As an addendum, “medical professionals” includes everyone from the highest-compensated specialists or GP all the way down to technicians, housekeepers and food service people. There is plenty of room in America for everyone and no one should be paid less than whatever the market can bear.
Until the Sixties all hospitals were “not for profit” but when the profit-driven hospital business model came into existence, along with physician-owned clinics and group practices, a “moral hazard” came along at the same time. A fee-for-service billing model plus referrals to for-profit institutions became the engine of health care inflation guaranteeing that over time parasites would eat their hosts. Sure enough, that’s where we went.
Somewhere along the way the notion of healing sick people (which leads to a smaller revenue stream) got lost. I read somewhere that in Sweden hospitals are paid for empty beds as well as those in use. That notion is based on the quaint idea that the mission of hospitals is keeping the community healthy, so empty beds means that goal is being reached. I don’t anticipate such a crazy idea will ever come to pass in this country, but the thought is worth contemplating.
****************
Please forgive me for this copy/paste comment from another thread. My time is short this morning but the same ideas apply to this single-issue group purporting to defend “small business” as well as the insurance birds of prey.
Groups such as these have poisoned the debate well for so long it is hard for real health care professionals to be heard among the din. With AHA now on the books I’m finally seeing encouraging signs that real medical pros are taking the high ground.