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The Public Plan and Small Business
By Marc Tracy
When we write about health care, we have tended to focus less on the particulars of a potential plan and more on, say, the necessity of genuine reform to save small businesses billions of dollars, or on the tricky politics surrounding an employer mandate. We have not taken a position on, for example, the public option--the notion of a government-run insurer that can assume the burden of the currenty uninsured as well as use its buying power to negotiate rates, promote certain treatments, and through competition lower prices throughout the health insurance industry.
Now, though, Jonathan Weber, the small-business columnist at our sister site The Big Money, has made what might be termed the small-business case for the public option. It's not, in other words, based on the more ideological pros and cons, but on the much simpler proposition that ordinary small businesses should not have also to be in the health-insurance business.
"There is little economic logic in forcing companies to provide health insurance," Weber argues. "It distracts them from their principal mission, it gives large companies a big advantage over small companies (big companies can leverage economies of scale to reduce their per-employee costs), and it introduces friction in the job market by creating an external incentive not to change jobs." (Indeed, we've written about the numerous ways in which the current system disadvantages small businesses here.)
Weber also notes that many small-business groups--in particular, the powerful National Federation of Independent Business--appear to be opposed to a public option for ideological reasons rather than small business-specific ones. We've taken the NFIB to task for prizing conservative ideology over common sense in the card check, fair-pay, and estate tax debates already; if we were you, we'd expect to see a post on health care shortly.
Meanwhile, the big news on the health-care front today is that none other than Wal-mart has come out in favor of a broad-based employer mandate--a general requirement (potentially exempting small businesses) that employers provide health benefits to their workers. Wal-mart's being canny, to be sure--this move makes it look reasonable, and may also make a public plan less likely--but it's worth noting that its letter is co-signed by the heads of the Service Employees International Union and of the liberal Center for American Progress--so if it's being canny, it's also being serious. We're not sure exactly what the implications of this move are for small businesses. Suffice to say, though, that the burden that would fall on Wal-mart's being required to insure all of its employees is far less onerous than the one that would fall on the average, truly small business.
Comments (0)July 1, 2009 10:45 AM
