WASHINGTON, July 15, 2009
Small Businesses Balk at Health Care Plan
Owners Leery of Added Costs of Either Giving Employees Health Care or Paying Penalties
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Play CBS Video Video The Rush for Health Reform President Obama praised Congress for taking small steps toward health care reform, then pleaded with them to pick up the pace. Chip Reid reports.
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President Obama is pushing for swift action in Congress on health care reform but many small business owners are concerned that they will end up footing a large part of the bill. (CBS)
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Chris Warner who owns a small mountain climbing business. He says he's concerned that paying for employee health care (or paying a penalty equivalent to 8 percent of his payroll) will hurt his business. (CBS)
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House Speaker Nancy Pelosi, D-Calif., is joined by House Majority Leader Steny Hoyer of Maryland, Pete Stark, D-Calif., Henry Waxman, D-Calif., and other House Democratic leaders (not pictured) at a news conference, announcing the introduction of health care legislation on Capitol Hill, July 14, 2009. (AP Photo/Manuel Balce Ceneta)
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President Barack Obama wants comprehensive reform this summer. As he put it today, "It's time for us to buck up." And there are a lot of bucks at stake.
Several proposals are making their way through the House and Senate this week, but as CBS News White House correspondent Chip Reid reports, there's growing opposition from small business owners, who'd pick up a big part of the tab.
The president praised Congress today for taking their first small steps toward health care reform - then pleaded with them to pick up the pace
"We can't kick the can down the road any longer. Deferring reform is nothing more than defending the status quo," he said.
Democrats on a key Senate committee passed the first piece of their reform plan today, with no Republican support. Yesterday in the House, Democratic leaders introduced their legislation.
Both plans would extend health coverage to the vast majority of the 50 million uninsured; require those without insurance to buy it; and give subsidies to low-income Americans to help them afford it
"Both proposals will offer stability and security to Americans who have coverage today, and affordable options to those who don't," Mr. Obama said.
The White House says most Americans would be winners. But try telling that to Chris Warner who owns a small
He's climbed the two tallest mountains in the world, Everest and K2, but says surviving health reform could be his toughest challenge yet.
"We really could find ourselves in a position where a lot more small businesses are going to go bankrupt," he said.
Warner worries about getting hit by a double whammy
First, under the House bill, businesses with payrolls of more than $400,000, like Warner's, must either provide health insurance for their employees or pay a penalty of 8 percent of their payroll.
That could add over $100,000 to Warner's tax bill.
"Do we do it by not giving our employees a raise, not reinvesting back in our company? It's just that classic Catch-22 for small businesses," Warner said.
The second part of the double whammy is a surtax of at least 1percent Warner would have to pay because his business earnings exceed the threshold of $280,000 a year, even though he personally takes home much less than that
"Is the greater good for me to take that capital and pay taxes or is it for me to take that capital and create more jobs," he said.
In an interview today with CBS News medical correspondent Dr. Jon LaPook the president said the money for health care reform has to come from somewhere and he prefers getting it from those with at the high end of the income scale.
"If you can afford it, either give your employees health insurance, or pay into the pot so that we're not subsidizing it," the president said.
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Add a Comment See all 43 Comments
- I think food is more important than healthcare, so when is the government going to buy my groceries?
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- Since lefties love the government so much we should do 2 things. First require the Obama's and all of Congress to require them sign on to this monstrosity, including Ted Kennedy and we should socialize the legal profession, to reduce costs and, of course, improve quality. Since lawyers are owned by the Dems they should love the idea. Quality legal care for all, they would get LOTS of customers and they would be paid promtly and at greatly reduced rates from the socialist in congress. What do you think?
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- Small business claims that they would like to provide health care, but it is too expensive. Now this is their chance to walk the talk. A level playing field says ALL businesses must provide health insurance. Since that will be the case it will be up to how well you can manage your company. No more balancing the books off the backs of the workers, at least not when it comes to health care.
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- According to the bill from congress, you will have no choice. You can keep your exsisting plan, but can only change to the government plan. You won't be able to buy individual health insurance from a differen't insurer. What happened to the choice Obama promised? You can check the article at IBDeditorials.com
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- Tort reform is a red herring. Malpractice court awards total less than 1% of the cost of health care. If you allow bad doctors to get away with harming people, reckless incompetence will just be a very small cost of doing business and harm.
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- Without TORT REFORM, medical provider costs will never drop. We are always screaming about health care reform. Shouldn?t TORT REFORM be included? Studies show with http://www.healthinsurancetexas.biz and http://www.dentalinsuranceutah.net that liability insurance costs are approaching nearly half of the operating expenses for specialty care physicians, units and facilities. Humana health plans state that their costs of medical liability and defensive medicine accounts for nearly 10 cents out of every premium dollar collected. Compare that to Humana?s reported pharmaceutical claims of 15 cents out of every premium dollar collected. Or better yet, 21 cents out of every premium dollar collected is paid back to physicians for physician treatments.
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- mikeoliphant you hit the nail on the head, without TORT reform, you will never see health care costs drop. But Obama and the rest of the Dems say it is not an option. Thats why physicians order so many more tests and procedures, to cover themselves from law suits. We wouldn't want the lawyers to have to give up their golden goose, let everyone else pay more taxes or take a cut in their income. And then of course you have people like skyk-2009 that want national health care as long as somebody else pays the majority of the bill for them. If you look at other countries with universal health care, I would be willing to bet there is no such thing as malpractice suits.
- I would rather live in a free country than in a country where the government makes me do what they say is good for me. You can have all the national socialist programs if you want them, but don't say we live in a free country because that is a lie.
In a free country, no one can confiscate your money and property to spend on what they think is best--especially not the government. Freedom means freedom from government oppression and force. When people lose their freedom, it is because a government takes it away. No one else can take your freedom.
Cradle to grave socialism may provide a measure of material security, but it is not freedom. The government regulates your life, spends your money, gives you what they decide you should have and in the end you are no longer free. You can go that route if you want to, but at least be honest and admit you gave up your freedom by choice. - Reply to this comment
- What effect will this have on large insurance companies such as United Healthcare and Blue Cross? If the government pushes this through, without reading it....again, they are setting themselves up to have a nationwide group insurance plan like medicare. This is something they have not allowed insurance companies to do which drives up the cost for others.
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- The man needs a good tax accountant. Whoever is doing his now needs to be fired. That would solve three problems. It gets him better advice, lets him keep more of his money and it eliminates one employee for which he must provide health care insurance. Businessmen like to keep as much money as possible; giving employees raises, providing health coverage, allowing rest breaks, and, in this particular case, replacing the ropes when they fray, are all detriments to the primary goal of his acquiring wealth. Too bad slavery died.
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- At $2.5 trillion in a $12 trillion economy, something MUST be done about health care costs. Health care costs have risen 120% in just the last 10 years. At that rate no one will be able to afford health care and the country will collapse.
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- If small business doesn't want to provide health care, the solution is really quite simple. Business should get behind the single payer system that the rest of the civilized world is using. Oh wait, there aren't profit margins, shareholder returns and golden parachutes in those systems, my bad.
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- Hey Pub:
Exactly. And what about those people who are hopelessly destitute with no ability to afford any insurance? What are you going to do with them? Throw them in jail, or take more food off the table of their children? Slippery slope. Sing along now 'Slip sliding away'.
- Oh and another thing. We have heard of the Amish in the hills of Pennsylvania and other places. They maybe the healthiest people alive and only see the doctor as needed. They pay cash and do not rely on others for their support. What are they going to do with those who do not need medical insurance because they are 'low risk' health wise?
- Hey John, either way you are paying for them, either through the taxpayer subsidized programs like medicaid or at the emergency room where their cost is passed on to those with insurance resulting in higher premiums.
I stand by my first assertion, get rid of the profit margins, Shareholder returns and golden parachutes and you will see insurance become more affordable for all.
- Hey Pub:
- Here we go again, skyk 2009 wanting someone else to pick up the tab, on health care coverage.If these other countries health care is so great, like our neighbors to the north. Nobody is keeping you here, as you said in another post "DON'T LET THE DOOR HIT YOU IN THE BEHIND".
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- skyk-2009 July 16, 2009 7:43 AM EDT
Those "guest workers"? They OBVIOUSLY have a job don't they? Now we certainly can't call them "leeches" although I can call people who employ them a lot of names. Regardless, IF people are going to employ them for the low wages that would indicate to me that they are MORE able than most to pay for their health care. Germs do NOT know an Illegal form anyone else you know, they just SPREAD!!
Good way to defend criminal immigration. How about we just deny health care to those who are not here legally. That wold have saved dozens of southern california emergency rooms fromm closing. - Reply to this comment
- Here we go again, more of the same tired old garbage that has prevented us from doing what we KNOW we have to do in the past. It's NOT going to solve itself people, anyone with a BRAIN should be able to figure that out. It's not going to just GO AWAY and it's putting our nation in a position of being left out in the World Economy. Now is the TIME! Let's get this done and move the nation forward. Turn your back on this tired old scare tactics because there is going to be a LOT of it coming your way paid for in full with YOUR Insurance Payments.. none of which have gone down AT ALL!
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- First, under the House bill, businesses with payrolls of more than $400,000, like Warner's, must either provide health insurance for their employees or pay a penalty of 8 percent of their payroll.
That could add over $100,000 to Warner's tax bill.
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Someone really needs to educate the writer. 8% of $400,000 is $32,000 and not $100,000.
I am a small business owner and offer health insurance to my employees. To each, I offer the choice of the benefit or the cash equavilant in their paycheck. Under this federal plan, I would not be able to offer that choice. That is unfair because many times, the employee is already covered under their spouse's insurance. - Reply to this comment
- The biggest drain on this nation's economy is the illegals. Call them "guest workers" or whatever other euphemism you can think up, but the bottom line is that they are benefitting from your hard-earned tax dollars and not giving back one single dime. It's time to cut these leeches off. If you can't prove you're a tax-paying citizen or LEGAL alien, you don't get access to ANY taxpayer-funded program, service, or benefit. No pay, no play.
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- Those "guest workers"? They OBVIOUSLY have a job don't they? Now we certainly can't call them "leeches" although I can call people who employ them a lot of names. Regardless, IF people are going to employ them for the low wages that would indicate to me that they are MORE able than most to pay for their health care. Germs do NOT know an Illegal form anyone else you know, they just SPREAD!!
- If all business has to pay health care there is no competitive disadvantage between companies, so the macro economic effect is neutral.I know many small business owners that exploit their help, customers, and live a luxurious lifestyle on the backs of others. Time to share the wealth! I do share small business concerns about costs.
What the government needs to do is to control the fees hospitals, MDs and clinics charge as a monopoly. It needs to establish a lifetime per person maximum payable for health care policies. It needs to exclude illegal aliens from free medical care. (People who don't pay tax; don't get benefits!) Universal health care works in all major industrial countries. It can and will work in the USA as well. - Reply to this comment
- I met a doctor who had started his own practice and wanted his staff to have great health coverage. What he came to realize was that it was horribly expensive to cover the women over 50 or who had any health issues. It was devestating when he learned he was unable to provide his employees with health benefits that were worth a darn.
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- I think small businesses are desperate for this health care reform. They sure are if they care about their employees and want them to have decent health coverage. Now insurance is so expensive and has so little benefits that meet the needs of employees that they end up with pathetic coverage. With the changes President Obama wants small businesses will be able to cover their employees with decent health benefits that covers their needs and is much less expensive.
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- Agree with your thoughts - I am a small business - provide health coverage - but the premiums are really tough. Premiums for just my spouse and I are over $21,000 per year - manage to do that and also cover the other employees - but it is getting tougher all the time. Rates go up at least 20% per year.
- We haven't seen the government plan yet, so how do we know what kind of coverage it will have. It could be just like one of the high deductible private insurance plans, or like medicare where if you want it to cover almost everything, you have to buy a supplement to cover the donut hole. You are not going to get the same plan that the politicians and government employee's have.
- The Dems seem to want to make every business a non-profit. Then no one will pay taxes and who will foot the bill. The anti-business attitude of the Dems will cause real trouble. It will squelch people from starting them and will force business to lay off to pay for the tax bill. I can only surmise that their is not a business mind in the Democratic Party and Obama, the community organizer, has no head for it.
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- The "Dem's" what to fix the Worst Health Care System in the World. THAT system has put American Workers up against Workers who HAVE coverage and do NOT have to pay for that out of their pockets. WE are LIGHT YEARS behind the rest of the world and our standard of living is falling so fast we could end up in the Third World if we just "Stay the Course"! In ALL civilized nation on this planet, Health Care is just accepted as everyones right... EVERY nation that is EXCEPT this one.
