del.icio.us
Digg
Sphere
Stumble
Technorati
Twitter
Crafting Health Care Reform
By Marc Tracy
Here's a good instance of a non-credit-related policy issue that we hope new Small Business Administration head Karen G. Mills will devote some time and effort to. It turns out that America's predominant system of providing people with health care, in which working people receive it through their employers, has problems in addition to the fact that it leaves millions without health insurance.
According to this OPEN Forum post (OPEN Forum is published by American Express OPEN, which is also our sponsor), a new report finds that employees at larger companies are more likely to receive health care through their employers than those at smaller ones. Specifically: 98% of those who work at places with 200 or more workers get it; 90% at companies with between 25 to 49 workers; 75% at companies with betweenten and 24 workers; and merely half at companies with fewer than ten workers. An additional problem: only 23% of new firms are likely to offer health insurance.
Suspend, for a moment, your concerns (they are our concerns too) about workers who don't have health insurance, to say nothing of those who are not so fortunate to have jobs currently and therefore are not only not receiving pay but are also uninsured. Think, instead, about what the implications of this situation are for small business owners, and for ambitious entrepreneurs starting up new companies.
The fact is, this data is likely telling us that the burden--in cost, in paperwork, in whatever--for extending insurance to employees falls heavier on small businesses than on larger ones. That means that a small business owner has the choice of either extending this crucial benefit and thereby disadvantaging himself or herself in this dimension when it comes to larger rivals, or not extending this benefit, which will leave him or her, first, less top talent (as the most in-demand employees will choose to be hired away by larger companies that will also provide them health insurance) and, second, employees with lower morale (and, given what we know about the correlation between being insured and receiving preventive care, simply less healthy employees). All this apparently goes even more for start-ups.
This is a huge inequity--structural and imposing--and it must be rectified. We'd also briefly add that it is catastrophic for America's ability to compete with the rest of the world: if employees at our innovative start-ups don't have health insurance and those at Western Europe's innovative start-ups do, who do you think is going to get the top talent? This is a problem whose solution is likely to come from the federal government, particularly as all parties involved say they want health care reform, and they want it this year. Clearly small business has a huge stake in that debate. Who better to represent that stake and to give small business a voice than the SBA head?
Comments (0)April 9, 2009 10:03 AM
