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The Obamacare myth about small business
The Obamacare myth about small business
By Jose Pagliery @Jose_Pagliery
NEW YORK (CNNMoney)
It's been uttered by every opponent of health care reform: Obamacare will kill small businesses.
But the new law's rules don't apply to the vast majority of small businesses. The employer mandate, which forces firms to start providing insurance in 2014, pertains only to companies with at least 50 full-time workers.
That's a tiny fraction of small businesses.
As of 2010, there were roughly 5.7 million small employers, defined as those with fewer than 500 workers. Some 97% of them have fewer than 50 employees. That means Obamacare's employer mandate applies only to 3% of America's small businesses.
That's about 200,000 companies.
The critics aren't convinced: "Small businesses don't have staff with the time and expertise to deal with the new system. It's a huge drain on these smaller firms," wrote U.S. Rep. Sam Graves (R-Mo.), House Small Business Committee chair, in a recent editorial for The Washington Times.
Why so much focus on so few firms?
A Graves spokesman said the affected businesses include fast-growing "gazelle" firms, the startups that contribute a disproportionate amount of the nation's new jobs.
"The more money these companies have to spend complying with health care mandates, the less they have to hire and expand," the spokesman said.
Those costs aren't anything to laugh at. If they don't provide insurance, businesses with 50-plus workers face $40,000 in penalties and $2,000 for each additional full-time employee.
However, nearly all of those businesses already do provide insurance: 96% of those with 50-plus workers currently offer health plans anyway, according to government data.
That most businesses affected by the mandate already provide insurance doesn't necessarily mean their insurance is good enough or sufficiently cheap under new Obamacare rules. That's the counterpoint made by U.S. Senator John Barrasso, a Republican from Wyoming.
"The mandates are for a lot more coverage than the average person would want, need or can afford. The business is going to have to spend time, money and have to figure that out," Barrasso said.
For example, firms might be providing insurance that Obamacare deems unaffordable -- that is, if it costs more than 9.5% of a worker's income.
But there are signs that most plans out there qualify under Obamcare's other requirement. More than 99% of those in work-sponsored plans have insurance that meets most Obamacare coverage standards, according to last year's study by the University of Chicago's National Opinion Research Center.
Putting it all together, the data shows that only a tiny sliver of the nation's small businesses face the new rules -- and even fewer face any changes. Of the country's 6.5 million workplaces, only 1% must actually start providing insurance next year.
It's a reality that's likely to catch most small business owners by surprise, said Eileen Elliot, a Vermont health care attorney who advises entrepreneurs.
"There's a lot of trepidation and misinformation out there," Elliot said. "I think it's time to do some education." To top of page
Sources: U.S. Census Bureau and Agency for Healthcare Research and Quality
http://money.cnn.com/2013/05/21/smallbusiness/obamacare/index.html?hpt=hp_t3
By Jose Pagliery @Jose_Pagliery
NEW YORK (CNNMoney)
It's been uttered by every opponent of health care reform: Obamacare will kill small businesses.
But the new law's rules don't apply to the vast majority of small businesses. The employer mandate, which forces firms to start providing insurance in 2014, pertains only to companies with at least 50 full-time workers.
That's a tiny fraction of small businesses.
As of 2010, there were roughly 5.7 million small employers, defined as those with fewer than 500 workers. Some 97% of them have fewer than 50 employees. That means Obamacare's employer mandate applies only to 3% of America's small businesses.
That's about 200,000 companies.
The critics aren't convinced: "Small businesses don't have staff with the time and expertise to deal with the new system. It's a huge drain on these smaller firms," wrote U.S. Rep. Sam Graves (R-Mo.), House Small Business Committee chair, in a recent editorial for The Washington Times.
Why so much focus on so few firms?
A Graves spokesman said the affected businesses include fast-growing "gazelle" firms, the startups that contribute a disproportionate amount of the nation's new jobs.
"The more money these companies have to spend complying with health care mandates, the less they have to hire and expand," the spokesman said.
Those costs aren't anything to laugh at. If they don't provide insurance, businesses with 50-plus workers face $40,000 in penalties and $2,000 for each additional full-time employee.
However, nearly all of those businesses already do provide insurance: 96% of those with 50-plus workers currently offer health plans anyway, according to government data.
That most businesses affected by the mandate already provide insurance doesn't necessarily mean their insurance is good enough or sufficiently cheap under new Obamacare rules. That's the counterpoint made by U.S. Senator John Barrasso, a Republican from Wyoming.
"The mandates are for a lot more coverage than the average person would want, need or can afford. The business is going to have to spend time, money and have to figure that out," Barrasso said.
For example, firms might be providing insurance that Obamacare deems unaffordable -- that is, if it costs more than 9.5% of a worker's income.
But there are signs that most plans out there qualify under Obamcare's other requirement. More than 99% of those in work-sponsored plans have insurance that meets most Obamacare coverage standards, according to last year's study by the University of Chicago's National Opinion Research Center.
Putting it all together, the data shows that only a tiny sliver of the nation's small businesses face the new rules -- and even fewer face any changes. Of the country's 6.5 million workplaces, only 1% must actually start providing insurance next year.
It's a reality that's likely to catch most small business owners by surprise, said Eileen Elliot, a Vermont health care attorney who advises entrepreneurs.
"There's a lot of trepidation and misinformation out there," Elliot said. "I think it's time to do some education." To top of page
Sources: U.S. Census Bureau and Agency for Healthcare Research and Quality
http://money.cnn.com/2013/05/21/smallbusiness/obamacare/index.html?hpt=hp_t3
Even with that cleaned up version, it doesn't sound any smarter.
You're smart every day Teko.
And fox can make them drink! Now if and when fox covers the complete story in context, which we know they wont. Then and only then will they get it I think. Gee Im such a smartass today arent I.
Yep, you can lead a horse to water.
“But we have to pass the [health care] bill so that you can find out what’s in it....”
She said, what she said. The latter “Crawfishing” is irrelevant. Her excuse and twisting of words doesn’t even help her case, “So, that’s why I was saying we have to pass a bill so we can see so that we can show you what it is and what it isn’t,”
She said, what she said. The latter “Crawfishing” is irrelevant. Her excuse and twisting of words doesn’t even help her case, “So, that’s why I was saying we have to pass a bill so we can see so that we can show you what it is and what it isn’t,”
“But we have to pass the [health care] bill so that you can find out what’s in it....”
For Republicans and conservatives, nothing exemplifies government overreach and arrogance more than those 16 words, uttered by then-Speaker of the House Nancy Pelosi at the Legislative Conference for the National Association of Counties in March 2010. Ask her about that comment and the ensuing criticism today and Pelosi fights back.
During a lunch in the Capitol with opinion writers today, House Minority Leader Pelosi was asked about those infamous words. “It’s because we didn’t have a Senate bill,” Pelosi said forcefully before Eleanor Clift of Newsweek even finished asking her a question about the statement’s context. “We were urging the Senate to pass a bill.”
Those ten seconds, immortalized by Fox News leave out what Pelosi said in the lead-up to those infamous words:
You’ve heard about the controversies within the bill, the process about the bill, one or the other. But I don’t know if you have heard that it is legislation for the future, not just about health care for America, but about a healthier America, where preventive care is not something that you have to pay a deductible for or out of pocket. Prevention, prevention, prevention—it’s about diet, not diabetes. It’s going to be very, very exciting.
The key line is the first one. It’s easy to forget the tumult of that time. There was a lot of frustration with the Senate version of the health care reform bill and consternation over the proposed process to get it through the chamber with minimal Republican votes, reconciliation.
“In the fall of the year,” Pelosi said today, “the outside groups...were saying ‘it’s about abortion,’ which it never was. ‘It’s about ‘death panels,’’ which it never was. ‘It’s about a job-killer,’ which it creates four million. ‘It’s about increasing the deficit’; well, the main reason to pass it was to decrease the deficit.” Her contention was that the Senate “didn’t have a bill.” And until the Senate produced an actual piece of legislation that could be matched up and debated against what was passed by the House, no one truly knew what would be voted on. “They were still trying to woo the Republicans,” Pelosi said of the Senate leadership and the White House, trying to “get that 60th vote that never was coming. That’s why [there was a] reconciliation [vote]” that required only a simple majority.
“So, that’s why I was saying we have to pass a bill so we can see so that we can show you what it is and what it isn’t,” Pelosi continued. “It is none of these things. It’s not going to be any of these things.” She recognized that her comment was “a good statement to take out of context.” But the minority leader added, “But the fact is, until you have a bill, you can’t really, we can’t really debunk what they’re saying....”
Fourteen days after Pelosi’s speech, President Obama signed the Affordable Care Act into law, a law that was passed with not one Republican vote. Now, Americans await a decision from the Supreme Court on whether that law is constitutional. “We’re prepared for every eventuality,” Pelosi said, “including success.”
For Republicans and conservatives, nothing exemplifies government overreach and arrogance more than those 16 words, uttered by then-Speaker of the House Nancy Pelosi at the Legislative Conference for the National Association of Counties in March 2010. Ask her about that comment and the ensuing criticism today and Pelosi fights back.
During a lunch in the Capitol with opinion writers today, House Minority Leader Pelosi was asked about those infamous words. “It’s because we didn’t have a Senate bill,” Pelosi said forcefully before Eleanor Clift of Newsweek even finished asking her a question about the statement’s context. “We were urging the Senate to pass a bill.”
Those ten seconds, immortalized by Fox News leave out what Pelosi said in the lead-up to those infamous words:
You’ve heard about the controversies within the bill, the process about the bill, one or the other. But I don’t know if you have heard that it is legislation for the future, not just about health care for America, but about a healthier America, where preventive care is not something that you have to pay a deductible for or out of pocket. Prevention, prevention, prevention—it’s about diet, not diabetes. It’s going to be very, very exciting.
The key line is the first one. It’s easy to forget the tumult of that time. There was a lot of frustration with the Senate version of the health care reform bill and consternation over the proposed process to get it through the chamber with minimal Republican votes, reconciliation.
“In the fall of the year,” Pelosi said today, “the outside groups...were saying ‘it’s about abortion,’ which it never was. ‘It’s about ‘death panels,’’ which it never was. ‘It’s about a job-killer,’ which it creates four million. ‘It’s about increasing the deficit’; well, the main reason to pass it was to decrease the deficit.” Her contention was that the Senate “didn’t have a bill.” And until the Senate produced an actual piece of legislation that could be matched up and debated against what was passed by the House, no one truly knew what would be voted on. “They were still trying to woo the Republicans,” Pelosi said of the Senate leadership and the White House, trying to “get that 60th vote that never was coming. That’s why [there was a] reconciliation [vote]” that required only a simple majority.
“So, that’s why I was saying we have to pass a bill so we can see so that we can show you what it is and what it isn’t,” Pelosi continued. “It is none of these things. It’s not going to be any of these things.” She recognized that her comment was “a good statement to take out of context.” But the minority leader added, “But the fact is, until you have a bill, you can’t really, we can’t really debunk what they’re saying....”
Fourteen days after Pelosi’s speech, President Obama signed the Affordable Care Act into law, a law that was passed with not one Republican vote. Now, Americans await a decision from the Supreme Court on whether that law is constitutional. “We’re prepared for every eventuality,” Pelosi said, “including success.”
If it was taken out of context, I'd love to hear the raw version of it. The death panel thing was nothing to me.
See, this is one of those lines taken out of context how many years ago and all people know is that this is what was said. Never did it ever get straightened out.
Another is the death panels, remember those? The whole program didnt have a chance of getting across in an educational format due to the campaign to make sure it didnt sell with the people.
And now it is here and now people are wondering what its all about and yes, I agree that the democrats could and should have done a much better job. The republicans were much more effective in their sales pitch and that is a shame.
Another is the death panels, remember those? The whole program didnt have a chance of getting across in an educational format due to the campaign to make sure it didnt sell with the people.
And now it is here and now people are wondering what its all about and yes, I agree that the democrats could and should have done a much better job. The republicans were much more effective in their sales pitch and that is a shame.
Honestly, the democrats need to do a better job of getting the facts out there. You HAVE to be a little scared about the thing when one of the nations leading politicians says something along the lines of, "well, you'll have to vote for it to see whats in it". I don't think I know one person who said "Gee, sounds wonderful to me."
"There's a lot of trepidation and misinformation out there," Elliot said. "I think it's time to do some education."
True
If they spent as much time trying to educate the public and explain instead of campaigning against it, people might know more about it. But its the law and people need to be educating themselves sooner rather than later.
True
If they spent as much time trying to educate the public and explain instead of campaigning against it, people might know more about it. But its the law and people need to be educating themselves sooner rather than later.
I am not sure that education is the key to serious discussion.
You can lead a horse to water but.........
You can lead a horse to water but.........
"There's a lot of trepidation and misinformation out there," Elliot said. "I think it's time to do some education.
For sure!...
Thanks for the article Mike. Lets hope people (nay sayers of obamacare") actually take the time to read it....
For sure!...
Thanks for the article Mike. Lets hope people (nay sayers of obamacare") actually take the time to read it....
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