Crises, which have been abundant in the past year, tend to draw attention to issues and create a greater willingness to consider various solutions. This highlights the importance of reflecting upon the situation. During a period already marked by challenges for American job creators, and despite the hopeful prospects brought by the vaccine rollout, another disaster approaches.
The increasing costs of healthcare have a significant effect on Main Street, posing a serious threat to our economy and society. With health expenditures reaching $3.8 trillion in 2019 and projected to rise to $6.2 trillion within seven years, small business owners are feeling the weight of healthcare costs.
In a national survey conducted by Small Business for America’s Future, over 800 small business owners expressed their desperation and called for government intervention to alleviate this burden.
To illustrate the severity of the issue, the survey revealed that 55 percent of small business owners identify the expense of offering health insurance to their staff as their primary hurdle. What’s more surprising is that this concern outweighs taxes, corporate competition, and even the impact of COVID-19.
Out of the survey participants, 50% stated that they offer health insurance as an added advantage. Among the small business owners who don’t provide insurance, 76% claim that the reason behind this decision is the excessive expense.
It is concerning that 53% of small business owners who currently offer insurance have contemplated discontinuing it due to the high costs. This is not surprising considering the fact that 90% of the respondents mentioned their health insurance costs have risen in the past four years. Furthermore, 40% of them stated that the costs have increased by 10% or more every year.
The findings indicate persistent inequities in the market that benefit large businesses and corporations. These imbalances have been a concern for small business owners for many years, as they are unable to address them effectively. Unlike major players, small businesses lack the ability to distribute risk among a sizable workforce, exercise direct control over healthcare expenses through self-funding of group health plans, negotiate for reduced rates, or include administrative costs within extensive human resources departments.
Consequently, small business owners pay higher costs, encounter limited options, and have to dedicate time away from their daily operations to manage their plans. It seems as though being small in the United States comes with an additional fee.
The fact that nine out of ten small business owners believe that the Biden-Harris administration should give top priority to reducing healthcare expenses is unsurprising. Surprisingly, a larger percentage of respondents (51 percent) are worried that the Biden-Harris administration and Congress may not take adequate action to lower healthcare costs, compared to the percentage (33 percent) concerned that they might go too far.
Undoubtedly, small business owners are in urgent need of a remedy for the excessive expenses associated with healthcare. Small Business for America’s Future examined various approaches to reduce costs, and each one received strong backing.
A significant majority, 87 percent, support the idea of setting a limit on out-of-pocket expenses for patients. Similarly, 85 percent endorse the notion of controlling prices charged by hospitals with high payment rates. Furthermore, 69 percent advocate for providing individuals with the choice to purchase a government-operated health plan, such as Medicare, commonly referred to as a public option.
Small businesses’ growing inclination towards supporting a public option appears to be a prevailing trend. According to a 2019 poll conducted by GQR for Public Private Strategies and a 2020 survey by Small Business for America’s Future, there is substantial support amongst small business owners for enabling employees to purchase Medicare or another government-run health plan.
The small business survey’s findings serve as a desperate plea, urging our elected officials to explore various healthcare reform possibilities. Regardless of their location – be it urban, rural, or suburban – small businesses are the backbone of our nation both economically and communally.
As per the Small Business Administration, there exist 30.2 million small businesses in the United States, and they provide employment for 60 million individuals. It is worth noting that small businesses constitute 99.9 percent of all businesses and are responsible for generating 66 percent of new private-sector jobs.
The Impact Of Health Care Reform On Small Businesses
The healthcare industry has seen a surge of interest in healthcare reform in recent years, primarily due to the impact of the Affordable Care Act (ACA). The ACA has created substantial changes, with small businesses experiencing significant effects from the law’s stipulations and measures.
The ACA includes a crucial provision that affects small businesses, which is the mandatory provision of health insurance for employees. According to the ACA, businesses with 50 or more full-time employees must provide health insurance to their workers or else incur a penalty.
Consequently, numerous small businesses have encountered difficulties in affording the expenses associated with providing health insurance. As a result, some have resorted to reducing employee hours or recruiting part-time staff in order to evade this obligation.
Small businesses have been impacted by another provision of the ACA, which mandates the inclusion of specific necessary health benefits. Consequently, numerous small businesses have experienced a rise in health insurance costs, rendering it more challenging for them to provide coverage for their employees.
Conversely, the ACA has yielded beneficial effects on small businesses as well. It has enabled them to procure health insurance via Small Business Health Options Program (SHOP) exchanges, thus facilitating the acquisition of more reasonably priced coverage for their staff. Furthermore, the ACA has furnished tax credits to small businesses that extend health insurance to their employees.
Although small businesses have faced both challenges and benefits as a result of the ACA, it is crucial to acknowledge that the legislation is continuously developing. The ACA undergoes ongoing modifications and improvements, underscoring the need for small business owners to remain well-informed regarding these changes and their potential implications on their enterprises.