By David Steil
Our economy relies on small businesses as sources of job creation, innovation, and growth. Across the country, 20.6 million small businesses are responsible for creating 62% of all new American jobs. We should be making it easier for small business owners – who usually wear multiple hats as general manager, accountant, brand ambassador, IT expert, and more – to grow their companies. Instead, America’s employer-based health care system forces small business owners to throw on another hat and become health care experts and administrators. This is a herculean task even for the savviest business owners and unnecessarily drains time and money from other priorities that would actually grow their companies and our economy. If the U.S. wants to support businesses and encourage entrepreneurism, then it’s time we address the health insurance elephant in the room and embrace single-payer, Medicare for All health care.
Small business owners have reported the cost of health insurance as their top concern for more than 30 years. And it’s no surprise: on average, businesses paid $6,101 in premiums per enrolled employee in 2016 and medical costs have outpaced the rate of inflation 2 to 1. On average, health care premiums are highest for the smallest businesses that have 10 or fewer employees. The National Federation of Independent Businesseshas found that some business owners have stopped sponsoring health insurance altogether because the overhead costs have become too expensive. And the American Health Policy Institute, a nonpartisan think tank, recently released a report examining how the U.S. is nearing the “tipping point” at which more and more employers will cease to cover health insurance. Business owners must navigate tough decisions over whether to absorb more of the costs of health care, pass the buck along to their employees, or stop providing coverage altogether.
In addition to rising health costs, business owners face a tangled web of IRS regulations and health plan marketplaces. With the implementation of the Affordable Care Act in 2010, businesses must comply with new regulations. Companies with 50 or more employees must either provide their employees and their dependents minimum essential coverage of “minimum value” or instead pay a fee to the IRS known as an “employer shared responsibility payment.” These large companies must also report to the IRS the health coverage they do or do not provide their employees.
Many employers want to take care of their workers and provide quality health insurance, especially small business owners who have a personal rapport with their employees. Not only is a healthy workforce critical to a business’ success, but companies with better health benefits have an easier time keeping and attracting quality talent. Businesses that drop health coverage or make their employees pay more in premiums may soon find themselves with a shortage of workers.
Luckily, a solution exists that would relieve businesses from the burden of employer-sponsored health insurance while still providing coverage to workers: Medicare for All. Under Medicare for All’s single-payer system, our health care system would be publicly funded but privately managed. Businesses would know their employees had quality health care without the headache of personally managing the health plans. And without having to pay premiums to health insurance companies, business owners could instead invest those savings back into their companies to launch new product lines, open new locations, raise wages, and more. The U.S. has long been an entrepreneurial nation with a spirit of innovation. If we want that to continue, we need to lend a hand to small businesses and reform our broken health care system.