Is penalizing small businesses the best way to fund public health care costs?
Filed under: Healthcare
Trying to find a way to pay for its $1.04 trillion health-care legislation, the House of Representatives decided to turn to small businesses and the wealthy. Small businesses with payrolls exceeding $400,000 will have to pay an 8 percent of payroll penalty if they don't offer health insurance to their employees. Employers with payrolls of $250,000 to $400,000 would pay a smaller penalty. There would be no penalty on employers with payrolls under $250,000, while some small firms would even get credits to help buy coverage.In addition to imposing a penalty on businesses that don't provide health insurance, the House proposes collecting additional taxes from wealthy families. Starting in 2011, families making more than $500,000 would have to pay an additional income tax of $1,500 to help subsidize coverage for the uninsured. A family making $1 million would have to pay $9,000.
"This bill costs too much, it covers too few and it has way too much government involvement," Michelle Dimarob, a lobbyist for the National Federation of Independent Business told the Wall Street Journal. "Small business doesn't want any of those things."
According to data from the federation, businesses with five to nine workers represent one million employers. They have average payrolls of around $375,000 per year. The Kaiser Family Foundation found only about half of businesses with three to nine workers offered health benefits in 2008.
As someone who joined the ranks of the uninsured this year when I could not afford to pay Florida's small business group insurance rate of $1,200 per month for a high deductible plan that didn't even start paying for health care until I spent $2,500, I can understand why small businesses can't afford to insure their workers. Rather than impose penalties on small businesses, why not come up with a reasonably priced health insurance package that makes it affordable for people to buy health insurance?
We are the only industrialized nation with 46 million uninsured people. The reason for that falls on our failed health care system, as fellow blogger Bruce Watson clearly spells out. Let's look at ways to truly fix the system rather than find ways to fund a broken system on the backs of our small business employers.
Lita Epstein has written 25 books including Working After Retirement for Dummies.
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Reader Comments (Page 1 of 3)
7-15-2009 @ 3:56PM
lewis said...
Healthcare should not be tied to a job. It should be the individual's choice. This rinky dink bill will do great harm to the economy. Google Dr. Ezekiel Emanuel, a noted medical authority (and brother of Rahm Emanuel, Obama's chief of staff), who advocates vouchers. He appeared on PBS and is author of a book on the subject. His plan is far better than the one being foisted on us.
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7-21-2009 @ 1:23PM
MARTA said...
As a small business owner I am anxious over this bill-with a drop in revenue we are doing all we can to keep afloat and keep our employees employed. It is important to us to maintain for our employees sake-we could get by with fewer employees but then they just become another hardship statistic. Now we are being asked to provide healthcare!? How? Where does this money come from?! Is it not enough we are keeping another soul from being unemployed?! Yes-we all need healthcare-I dropped my own to save money for the business (plus the fact that 348/mo didn't cover anything) I am taking better care of myself and keeping my fingers crossed.
7-15-2009 @ 4:09PM
doug said...
Why should we trust our government, the same bunch of law makers that has ruined Social Security and Medicare. What makes anyone think that they can take care of something this large and important. Call your representatives and tell them to read and think this through before they vote.
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7-15-2009 @ 7:29PM
Frank said...
What an outrageous assault on working people! Destroying and taxing private medical insurance, and government withholding necessary life-saving medical treatment because of the cost and the age of the patient - government rationing.
Add an 8% penalty on (very) small employers with a yearly payroll of more than only $250,000-400,000 will raise unemployement, lower salaries by at least that amount, or both. And we know that even with those taxes, only a small percentage of the real costs of Obamacare will be covered, requiring ever-larger taxes on all working Americans. Does anyone still believe anything that Democratic politicians and Obama have to say?
They think Americans are easily fooled. The way to bring down rising healthcare costs is not to pay (much more than) $1 Trillion in new taxes to a central government bureaucracy.
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7-15-2009 @ 8:43PM
FEDUP said...
This will recieve alot of flack, but Im going to say what everyone thinks! Why don't they STOP giving FREE health care to the millions of illegal immagrants in this country and start giving it to the citizens that deserve it! Want changs Obama? Grow balls and start there!!!!!
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7-16-2009 @ 3:07PM
J. Howard said...
Amen, stop all the free medical, education and social services to illegals and maybe they will stop coming across the boarder. They are bankrupting our country. Unfortunatly most are good, hard working people who do many jobs Americans will not do because many of them also get everything for free. These give away programs have got to stop. People need to work for what they get, prisoners included. Why should they have any rights after breaking the law? Obama and the Democrats will never let this happen because they need the minority votes!!!!!!!!!
FEDUP 2
9-09-2009 @ 8:47AM
Howard N. Wolff said...
Couldn't have said it better! We need to take care of our citizens first. The illegals have a another whole country to worry about them. They should go home and fix it.
7-21-2009 @ 10:41AM
Sickofit said...
DUMBAMA LIED our troops died DUMBAMA LIED unemployment thrived DUMBAMA LIED the stimulis died DUMBAMA LIED poor healthcare thrived DUMBAMA LIED our childrens future has just died
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7-21-2009 @ 6:21PM
joyceches said...
I have seen no politician address the lose in jobs when he puts health care salesmen out of work. How many doctor's will we lose? I think the older doctors will just retire and many would be future doctors will go into other fields than medicine. What is the projected bottom line?
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7-21-2009 @ 7:46PM
kevin said...
This proposed plan would most certainly cost jobs and better wages. More seriously, the "high quality" care and "guaranteed access to affordable health care" overly touted in this plan is both unattainable and unsustainable.
First, a braoder government-run health care system will fail miserably in a country founded and prospered on a free market/capitalistic model. Those citizens that are "truely" needy and deserving will still have access through pre-existing, though refined, programs. But to expand an already bankrupt/broken system makes little sense and is irresponsible. Providing "free" or "minimal cost" care to those who are not entitled, or to those who feel entitled, or to those who do not take care of themselves, or to those who are here illegally, or to those born here to illegal immigrants, should not be an inalienable right at any cost. Obama's plan is too expansive, too expensive, too naive, too restrictive, and affordable to whom? Another slap in the face for small business. Second, "high quality care" under this plan is no more than a humorous oxymoron. Ultimately, many of the best and brightest doctors will voluntarily opt out/retire early in order to escape the bureaucracy and limited/capitated reimbursements. This type of system will also provide little incentive to any potentially interested students as the financial and personal rewards will be in free fall. Time to push for public campaign financing if you really want change.
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7-21-2009 @ 8:33PM
Paula said...
I am self employed, don't have health insurance, but I received excellent medical care when I had a kidney stone, with affordable prices offered to me when they found out I was uninsured. My follow up care was at an income based church run clinic.
If I had insurance, I would have only been able to afford the
$5,000 deductible. Add to that, my premiums for the year, co-pays etc. your looking at upwards of $7,000 a year.
The total price of the kidney stone ER visit, ct scan, radiologist, on call doctor, lab work and meds-$2,400.
Insurance is supposed to be for catastrophic incidents. But because of the abuse of the insured, by going to the doc every time they sneeze, insurance has become unaffordable.
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9-10-2009 @ 12:22AM
keith said...
Same boat your in. Pay premiums and high deductible. 7000 a year before family taken care of.
7-22-2009 @ 12:07AM
pcapiaries said...
Most of you really need to do your homework and not just spout off at the mouth. We are in this mess due to the irresponsibility of past administrations. President Obama is now left to pick up the pieces and take the criticism for it too? Give me a break! Your so called "fiscal" conservative George Bush raised the national debt from 5.7 trillion to 11.3 trillion during his terms in office. DOUBLE!! Where were all you "fiscal conservatives" then when we were at the height of the bubble? We spent 515 billion this year (FY09) on defense and 145 billion on the "war on terror". This doesn't even reflect the appropriations for the wars in Iraq and Afganistan. It's these damn "defense" bills that are breaking us. Its the largest chunk of our discretionary spending bar none! 22% of GDP. That's the Military Industrial Congressional Complex for you; just as Eisenhower predicted. Good thing Obama just took out that rediculously expensive 138 million-per-plane F-22. You want REAL fiscal conservatism? Want to fund health care? Reign in the out-of-control defense spending!!!
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7-26-2009 @ 9:57AM
SOSTED said...
Let's tax the rich
Well the uninformed that elected OBAMA will be happy, but they are ignorant enough to believe that you can actually tax the rich and the corporations.
When you tax the rich or corporations they pass it on by raising the price of their goods and services as a cost of doing business. This is just a back door tax on all consumers and Obama knows this.
Oh yeah, he is not going to raise taxes on 95% of taxpayers (DIRECTLY).
This is the secret way that the middle class will pay for pork filled (so called) stimulus bills.
Think about it, businesses cannot operate at a loss and must pass on all taxes imposed by government.
Individuals that already pay high taxes due to high income levels have a budget too. If Obama raises their taxes, the business will raise his salary to compensate for the increase and pass it on to the consumer.
The (so called) rich also live with a budget and will not sell their home, airplanes,boats, automobiles or decide not to send the children to Harvard just because a "class warfare" tax has been imposed. They just pass it on to you in the price of the goods and services that we all need to survive in today's society.
Don't be hood winked into believing that taxing corporations and the rich will somehow help you.
IT CAN'T HAPPEN AS PROMISED AND BARAKO KNOWS IT !!
They have just "picked your pocket" and the changelings elected him to do it!!
IT'S A TRICK TO GET ELECTED BY THE IGNORANT!!
If you legislate the profit motive away, businesses shrink causing job losses. So it's socialism or capitalism, pick your poison. Unemployment or the big nanny government courtesy of the Democrats in power.
It's all about change of power, " from the citizen to the government"
7-22-2009 @ 3:17PM
Kelly said...
If this bill passes, small businesses will have to fire more employees and reduce pay and increase prices to offset the cost of the healthcare or penalties. Plain and simple. You can't pay for something unless you have the money (profits) and right now small businesses do not have the money so most will just have to sacrifice some of their staff.
But not to worry, unemployment benefits will last at least a year and a half...unless too many small businesses go out of business - which is what is happening already...Oh well, at least a few people will get coverage, right?
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7-24-2009 @ 11:33AM
Trish said...
Why can't we all have the same insurance that is offered to the government officials and the politicians and the president? Obama hasn't even turned this economy around or started to. I think he really needs to focus on creating more jobs. He hasn't done anything right since he has been in office!
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7-25-2009 @ 9:01PM
Sam said...
To article author Lita Epstein ...
First ... your title assumes that expansive & expanded public healthcare is going to happen in the US ... but all who are thinking that way will face ominous & organized resistance from people who actually think. Second ... increasing taxes on those who create the majority of employment in the US is STUPID! Third ... the only way Obama's plan can lower lifetime healthcare costs quickly is to cut where the most healthcare costs occur. For 'average' Americans, 80% of your healthcare costs happen in the last few weeks and months of one's life. That means that 'euthanasia' will become patriotic under Obama's plan. Don't for a second think it won't happen. Wording is already in the proposed bill that requires people in their 60's to get regular 'end-of-life COUNSELING' ... just imagine who will run that and what the goals of that little proposal are. WISE UP, AMERICA. Obama's (and the Dem's) current plan needs to be DOA!
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7-25-2009 @ 4:35PM
montana said...
The Government has already taken over the automobile industry and the banks. Now they are doing the same with health care. It would only take about 28 mil to fund those that don't have insurance. Why not address the real issue instead of taking full control for everyone? The reason? Power. Those that are pushing this through only want everthing else you have. America will not wake up until it's too late. Come on folks this has been coming for 40 years. It's easier to stick our heads in the sand and let someone else do it for us. That's the American way. Well, guess what, the joke will be on us!
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7-25-2009 @ 8:43PM
Grant said...
Too many Americans have their lives runined by serious illnesses, life events over which we have little if any control. Life savings can be wiped out and family members lost due to the happenstance of being attacked by a creature of microscopic size. Health issues are the major cause of individual bankruptcies. And it could happen to you or someone in your family.
President Obama's proposal seeks to preserve our free market system by enhancing employer sponsored health care coverage. Employers who choose not to provide this benefit have an unfair advantge over those companies that do. Now that the legislative process is seeking to deal with this inequity, and of course these business owners are staring to howl and ratched up the propaganda. Many of the dire predictions and other nonsence previously expressed in the blog were placed there by selfish businessmen.
Remember, doctors, hospitals, health insurance companies, pharmaceutical manufactures, and others are making tons of money under the present system. They care little about those denied health care. We can expect them to deliver a tsunami of half-truths, fearful predictions, threats, and warnings. It has already started. But let me tell you this, when you are in the over crowded emergency room, and must wait for hours for treatment, the rich beneficiaries of the present system will be comfortably lounging at their country clubs and palacial manors.
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7-28-2009 @ 3:09PM
Barbara said...
If the true aim were "health care," public health and free clinics could treat and triage those without other means for less than the waste and fraud of current government-operated and rarely monitored systems.
Adding a layer of paper pushers and centralizing everyone's health information creates costly and questionable control. Why should business, or even the super rich, be soaked for mass insurance IF health care is honestly the question?
The "outcome" for every person in life is, ultimately, death. The U.S. does not need to emulate nations which refuse to treat very ill people in hospitals in order to make death rates appear low.
It may appear that Canada and UK have admirable systems on paper and enviable "outcomes;" but, talk with people delayed and dumped about high taxes and the "effective" treatments they were denied unto death.
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