Myth #5 in the Series--Dispelling the 6 Most Prevalent Myths Regarding Health Care Reform, 1 Myth at a Time

Today's myth will touch on small businesses.

Myth #5
Small Businesses Will Be Hurt by Health Care Reform

Facts
People against a public option and health care reform have voiced all types of scare tactics, one of which is the demise of small businesses if reform is enacted. Where do they get this stuff?

According to my sources, a small percentage of small businesses would in fact see a tax increase with the passage of a national health care reform act. This would be about 4% of the top-earning small businesses, however "small business" is defined. So that means that about 96% of small businesses would not be subject to the tax surcharge. Small businesses would also be eligible for tax credits up to 50% to provide health insurance to their employees.

In my first post, I talked about working for a for-profit health maintenance organization. I told how small companies, because they were small and did not have the bargaining power, had to pay higher rates for less coverage than larger companies. I saw this first-hand since I worked on various company accounts. With passage of health care reform, this imbalance would be rectified as the act would prohibit health insurance companies from unfairly discriminating against a small business. Why is this bad? I see it as a positive, but some people think it's a bad thing.

The National Federation of Independent Business says that small businesses are especially susceptible to the vicissitudes of the health care insurance market. In March 2009, the NFIB stated "our current system of health insurance and health care is financially unsustainable and threatens the health and financial security of the American people. Small business owners and their employees are especially vulnerable to the weaknesses of our current system." http://www.nfib.com/

There is more information out there regarding small businesses, health insurance, and health care reform. Check out http://www.ctj.org/pdf/smallbuzhealthsurchage.pdf, http://www.businessweek.com/smallbiz/content/jul2009/sb20090721_906996.htm, http://mediamattersaction.org/factcheck/200907300008, http://www.nchc.org/documents/Resources/NCHC%20Debunking%20Myths%20Final%208_18_09.pdf, and http://www.healthcarereformmyths.org/HealthcareReformMyths.php#A27.