House Speaker Nancy Pelosi and others in Congress have been talking a lot about how a government-run public option will lead to lower costs and more choices for health insurance. Nothing could be further from the truth. Instead, the reality is that a “public option” would restrict “choice” to a single plan: the government-run plan.
But what it’s really intended to do, according to prominent leaders like U.S. Rep. Barney Frank of Massachusetts, is to put us on the road to single-payer, government-run healthcare. On a YouTube video that’s making the rounds, he says, “If we get a good public option, it could lead to single-payer (health care) and I think that’s the best way to reach single payer.”
Sure enough, the House bill has elements that are deliberately designed to drive small business owners out of the private market and into the public option. For example, the bill includes a provision that would require employers above a certain revenue threshold to offer a health insurance plan, whether they can afford to or not.
If they don’t, they’re forced to pay a tax of up to 8 percent of their total payroll. No matter how profitable or unprofitable a business might be, the owners are forced to pay this tax if they do not provide “qualified” health insurance to their employees.
The bill also establishes a confusing test that hits employers who already offer health insurance. Small businesses must, one, offer that qualified plan (determined by a government-appointed board); two, provide both individual and family coverage; and three, meet minimum contribution levels, which could be more than they are already paying, let alone can afford.
And if employees decline coverage and decide to go to the government-run option, the employer must also pay the payroll tax. All of these added expenses and new rules are likely to lead small business owners to throw up their hands and say it’s cheaper to drop their plan and pay the tax.
As you can imagine, these ideas scare and outrage many small business owners, and rightly so. One owner told us, “How do I add expenses to my company when I’ve already lost $100,000 this year and am just desperately trying to survive? We lost one-third of our employees and the remaining ones are working reduced hours.”
Another member wrote in, “Mandates are ineffective [and] this bill deprives me of my rights to determine how to use my resources. It harms small business and their employees — the very groups it is supposed to help.”
The House bill simply will not work for small businesses. Small business owners, their employees and families are in dire need of health insurance reforms that will lower costs, increase competition and result in more choices for private health insurance.
That’s why thousands of small business owners across the country are contacting their legislators while they are back home in August. Their message? If the president and Congress insist on going down the House’s road, they will actually make things worse for small business. Anyone who values the contributions small businesses make to their communities and to the country should tell their representatives the same thing.
Dan Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.