The great debate over health care reform occasionally drags in small business owners propped up as good reasons not to pass legislation. The implication is that mandating health care for small businesses would put them out of business because of the added costs that requirement would bring.
That argument, of course, assumes that the small business provides no health care, or very little health care at the moment. And that assumption is both incorrect and a slight to those small concerns that have taken body blows to their ledgers over the last decade suffering egregious and seemingly arbitrary hikes in heath care costs.
For the last 15 years, ICON has not only provided excellent health care coverage for its employees, but there has never been any “pay in” from the employees’ salaries. Two years ago, when Humana announced our health care costs were going up 18 percent, we held the line on this policy, even though it had a significant impact on company resources.
Now, just 24 months later, Humana is back with another 15 percent health care increase, and now we might have to face the reality of asking employees to contribute, taking money out of their pockets, and putting it into the hands of a health care company.
Anyone who insists that the plans working through Congress are going to hurt small business doesn’t get it: small businesses all around the country are already feeling the pain from cost increases due to health care. Here are a few basic facts:
- Health care costs have risen 30 percent compared to the cost of our own services provided to customers over the last two years and 10 percent faster than to company-wide salary increases.
- Switching health care companies isn’t an option. All of them have dramatically increased their prices since the health care debate has taken root, and no one is offering lower health care costs.
- Health care remains one of the chief recruiting tools for small businesses competing with larger companies who are given better rates from the major health care companies.
The Obama plan offers this: “many small businesses that provide health insurance for their employees would receive a small business tax credit to alleviate their disproportionately higher costs and encourage coverage.”
For those small businesses already providing health care coverage, the prospect of a tax credit for doing what amounts to the right thing by employees is a major improvement. Beyond this, the prospect of a “government alternative” that actually provides a lower cost option would be another welcome option.
But it doesn’t mean that we would choose the government alternative; this is a major flaw in the health care debate. Small businesses can choose a government alternative to try and save money. It doesn’t mean that employees – current and future – will accept it.
In nearly every interview we have conducted with a potential employee, health care and the specific provider we carry, always is discussed. As ICON competes for good talent, our health care program is key. If the government-run health care option is considered a discount alternative, talent will go elsewhere. So the fact that a lower-cost option is available does not mean businesses will unilaterally make that selection.
The U.S. is one of the few countries providing health care on the back of business. And as those costs have gone up disproportionately, our competitive capacity has been reduced. At the small business level, health care costs have a very direct, dampening effect. Some alternative needs to manifest, or what at one point was a benefit for employees, may become an incentive for small businesses to find labor alternatives that do not carry such a burden.