The Small Business Dilemma
Each week the Texas Voice for Health Reform blog will feature a guest blogger from our network of partners. This week’s guest blogger is Elizabeth McClellen, Program Association at TexPIRG. Elizabeth can be reached at emcclellan@texpirg.org
The idea of developing your craft and setting up an honest business to support your family and a few employees shouldn’t be a terrifying prospect. If the health care system were truly reformed, it wouldn’t be. –Chris Gray, co-owner, Clayworks Studio, Austin, TX
Politicians and media outlets have consistently brought up the needs of small businesses in the health care debate to justify widely diverse and even conflicting policies. Yet according to a TexPIRG study, three-quarters of small businesses do not feel that their interests are represented in the current debate.
Small business owners throughout the state find themselves stymied by a health care system that costs them too much and leaves them with little bargaining power and few options for coverage. Many small business owners in Austin cannot afford to offer health insurance to their employees. Others make sacrifices in order to provide their employees with coverage and do so at an enormous price, deciding between personal and family health and the health of their businesses. With few employees, small businesses have little negotiating power. Combined with high broker fees and gratuitous administrative cost, small businesses pay up to 18 percent more than larger businesses for the same coverage. As a result, the national proportion of small businesses that offer health care to their employees has fallen from 68 percent to 59 percent since 2000.
TexPIRG has been building a coalition of small businesses in Austin in support of health care reform with a public option. Our small business coalition has taken action in a number of ways, calling and writing to legislators, submitting personal stories, co-writing opinion pieces, and recently, hosting a press conference. Below is a sample of a few of these powerful stories—a testament to the urgency of real, meaningful, comprehensive health care reform this year.
Dana, the owner of printing company D&J Blueline, co-wrote an opinion piece with us. She is a small business owner who offers health insurance to her employees. Insurance is a priority for her, and she provides it for her employees despite costs that have grown nearly four times as fast as wages in the last decade. After watching a family member go through bankruptcy two times due to medical expenses from recurrent cancer, she cannot accept that any of her employees go without access to comprehensive, affordable medical coverage. Health insurance costs add up to a whopping two to three dollars per hour for each employee and as a result, Dana has been unable to give raises to employees who have been with her for years.
On October 15, TexPIRG held a press conference, “If I Ran My Small Business Like Health Care, I’d Have to Shut My Doors,” with local Austin business owners, Chris and John Gray of Clayworks Studios on East 6th. At the event, TexPIRG released a new white paper report called Small Business At Risk: How Entrepreneurs Slip Through the Health Care System’s Cracks. The report documents the problems the small business community faces as they attempt to navigate and purchase coverage through and endlessly complicated health care system that places them at a clear disadvantage. The Grays have a disabled son, currently employed at Clayworks Studios, who receives coverage through the Texas High Risk Pool. If the Grays offered their employees coverage, their son would be dropped from Texas High Risk Pool. In short, the Grays must choose between providing coverage for their employees or their son.
How can we best help our small businesses in health care reform? According to Representative Elliott Naishtat (D-Austin, 49), “…national health care reform, including a public option that offers competitive prices for small businesses and individuals, will level the playing field and help our local economies.” Texas’ small businesses need health care reform now so they can continue creating jobs and powering our economy. Fortunately, the reforms currently under consideration in Congress will address small business’ needs. They will:
-Allow small businesses to pool their bargaining power when buying insurance through new buying pools called exchanges
-Provide new rating rules that will prevent insurers from jacking up rates when one employee gets sick
-Provide tax credits that will help small businesses struggling to cover their employees
-Provide a high-quality, low-cost public health insurance option that will compete with private insurer
As Chris Gray puts it, “People who come into our shop admire what we’ve built over the past 30 years and often comment that they would be terrified to go out on their own in such a way because of health insurance. The idea of developing your craft and setting up an honest business to support your family and a few employees shouldn’t be a terrifying prospect. If the health care system were truly reformed, it wouldn’t be.”
