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Small Biz Group Says Health Care Reform Could Save Them $855 Billion
Health care reform that requires employers to provide health care coverage for workers or pay into a fund—known as pay or play—could save small businesses as much as $855 billion during the next few years.
A new study by the Small Business Majority disproves claims by health care reform opponents that requiring businesses to provide coverage to their workers would destroy their bottom line.
The Economic Impact of Health Care reform on Small Business, written by Massachusetts Institute of Technology economics professor Jonathan Gruber, says that small businesses, more than any other sector of the economy, “suffer from our broken health care system.”
From spiraling premiums to inadequate access to health care for themselves and their employees, small business owners have seen their prospects for growth diminished and their profits slashed by today’s patchwork of inefficient health care options.
The report looks at three health care reform proposals—including President Obama’s—that call for pay or play by businesses, along with tax credits and other incentives to help offset the cost of providing health insurance to their workers.
This analysis demonstrates that the type of health care reform that is emerging from today’s debate will save small businesses hundreds of billions of dollars, protect small business wages and jobs—and allow small businesses to reinvest and grow.
Without reform, small business owners will pay nearly $2.4 trillion in health care costs for their workers over the next 10 years. But as the report points out, reform as outlined under the three plans,
could save as much as $855 billion with reform—a 36 percent reduction, money that can be reinvested to grow the economy.
Soaring health care costs are projected to cost some 178,000 small business jobs over the next decade, but health care reform, could reduce projected job loss by 72 percent job loss.
To benefit small businesses, their workers and the economy, the Small Business Majority report says that health care reform must:
- Substantially contain costs.
- Guarantee access to coverage regardless of health status.
- Be based on shared responsibility among individuals, businesses, the government and the health care industry.
- Provide appropriate assistance to small businesses to meet their health care obligations.
The Small Business Majority, founded in 2005 by executives of small companies who wanted to broaden the small-business discussion about health reform, isn’t the only small business group to back comprehensive health reform.
In January, the Main Street Alliance network of state-based small business health care coalitions, surveyed 1,200 small business owners and found they
- Are concerned deeply about the adequacy of insurance, including the breadth and affordability of services covered by their plans.
- Believe government should provide a public alternative to private coverage.
- Want increased oversight of private insurers.
- Are willing to contribute their fair share toward a system that makes health care work for small businesses, their employees and the communities they serve.
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HR 676 Would Reduce Overall Healthcare Costs
Families Pay Less
A study by nationally recognized economist, Dean Baker, of the Center for Economic Research and Policy concluded that under H.R. 676, a family of three making $40,000 per year would spend approximately $1900 per year for healthcare coverage. Currently, (in 2007) the average annual premium for families covered under an employee health plan is $11,000. (National Coalition on Health Care.)
Businesses Pays Less
In 2005, without reform, the average employer that offers coverage was contributing $2,600 to healthcare per employee (for much skimpier benefits), or 217.00 per month. Under HR 676, the average costs to employers for an employee making $30,000 per year will be reduced to $1,425 per year; or about $119.00 per month.
Baker’s study reported that HR 676 would reduce health spending in 2005 from $1 trillion, 918 billion dollars to 1 trillion, 861.3 billion dollars, which translates into a saving of $56 billion in overall healthcare spending while covering all of the uninsured. This is a 3% reduction in over-all healthcare spending.
Proposed Funding For HR 676 Program
Maintain current federal and state funding for existing healthcare programs; employer payroll tax of 4.5%, an employee payroll tax of 3.3%, in addition to the already existing 1.45% for Medicare; establish a 5% health tax on the top 5% of income earners; 10% tax on top 1% of wage earners, 1/3rd of 1% stock transaction tax, closing corporate tax loop-holes; repeal the Bush tax cut for the highest income earners.
Let’s encourage Congress to be careful in how they fund reform, though. The Administration budget proposal would make it 30% more expensive for the average corporation to pay an American to perform a headquarters job than to pay a resident of any other country to do the same job for the same wage. The proposals that have been floating around to currently tax foreign earnings could allow a German based company to clear 54% more profit from its sales in Asia than its American competitors could earn from equivalent operations. Neither of these proposals would help American jobs or the the market power of American workers. Health care involves huge dollars, and we need to be smart about how it is managed and how it is funded.
The big shock will come with Federal Health Care, when the Feds demand we live healthily. When we find we can be refused health care if we drink alcohol, or smoke, or are over weight, or ? You pick the item of health, that our government will demand we meet, or NO health care. Now are you ready for the 10% Federal Sales tax on parts and labor? That is suppose to also include Food.
National Health Care is not FREE. There will be strings, and exceptions. My employer even though I’m retired is still paying $750/mo towards my Medicare, as a co payer. When I was working until I retired in 1991, for my medical insurance they paid some $1200/mo. The medical profession is scamming us for all they can take in. When insurance pays, they keep raising the price. I have Kaiser as my provider, and they do give me the best and fast service, I hope other Americans can be covered as well as I am.
Wouldn’t it be great if every American could have the health insurance that Congress has and we pay for.They will argue against the same plan for all citizens all the while they don’t have a care.
Do not expect these people to do anything for the working man the only time they need us is during election years and our memories are short.We keep sending the same people back to Congress.
So far I see no promises fulfilled this year and backsliding on most.