Entrepreneurs Unsure About Health Care Reform
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The debate over health care reform changes a bit every day, but one thing is certain: some version of a bill is headed for a final vote. Legislation sponsored by Democratic Sen. Max Baucus has defined the parameters of the discussion and will heavily influence the bill's final form.
One voice that seems to be lost in the debate, however, is that of small business. Oh, there has been lip service; even in his nationwide address, President Barack Obama mentioned the challenges faced by entrepreneurs who try to start a business in the current environment:
"Then there's the problem of rising costs . . . [which are] forcing [small businesses] to pay more for insurance, or are dropping their coverage [for employees] entirely. It's why so many aspiring entrepreneurs cannot afford to open a business in the first place."
I'm glad to hear this kind of rhetoric in the national forum, but with all due respect, I wonder how many conversations the president has actually had with entrepreneurs. My company recently launched a survey regarding health care reform that received more than 200 responses from small business executives, and their feedback shows that there's a long way to go before they're comforted by the impending policy changes. What are entrepreneurs most worried about?
The cost and complexity are already too high. We asked survey recipients what they were paying for health care right now. Of respondents who pay at least a portion of the health care premiums of their employees, about 56 percent indicated that it consumes at least 1 to 5 percent of total revenues; another 19.3 percent indicated 6 to 10 percent. Therefore, about 76 percent of respondents believe that the health care costs take between 1 and 10 percent of total business revenues.
And those numbers are likely to increase in the near future: about 63 percent of respondents said their health care costs rose between 6 and 20 percent in the last year alone. Clearly, even minor adjustments to small business insurance costs will have a tremendous impact.
In addition, most respondents believe that health care reform will result in a program that is more complex than it is now (70.8 percent) and less comprehensive than it is now (42.9 percent). These are not signs of exuberant confidence.
And yet, no one's defending the status quo. Here's the part that surprised me: The vast majority of respondents agree that the current system needs overhauling. When asked if they would prefer "no change" to the current system, very few took the bait-only about 23 percent. While mindful of the potential costs and impact on themselves, business owners are not saying that we simply need to let the current free market system steer the ship.
Keep choice intact. Respondents were divided on what options health care reform should offer. Some lobbied for Preferred Provider Organizations (PPOs), while others actually suggested some degree of governmental control over a new system that is funded by business and personal income taxes.
A strong majority (67 percent) stated that they want a choice of plans. This, to me, suggests that respondents are open to the government-sponsored "exchanges" currently being discussed by Congress. But they want to ensure that they have a variety of benefits options open to them in addition to any new alternative authorized by Congress.
Entrepreneurs are not blind to the defects of the current system. But it seems ironic that a group that is likely to be most affected by the shape of health care reform has one of the smallest voices in the current debate. Our survey results indicate that small business owners are open to change, and open to dialogue; they simply ask for options-and that it doesn't become even harder to be a small-business entrepreneur. When it comes to cost and complexity, it's already plenty hard enough.