Ryan Streeter
Now the real work begins. As Republicans review their plan for taking on individual components of the health care law, they need to keep the interests and needs of enterprise - and especially small businesses - at the heart of their efforts.
It was good to hear John Kline, chairman of the Education and Workforce Committee, say yesterday that he would make the needs of small business a priority. More needs to be done on this front by multiple committee chairmen. The American public should see in clear terms how Republican-proposed reforms would translate into a less costly, more growth-friendly business environment.
Defenders of Obamacare will tell you that repealing the law hurts small businesses. But there's no evidence for that. If anything, it's the contrary.
The bill's incentives are skewed. There is no evidence that the law’s offering of tax credits for small businesses are changing the behavior of small companies when it comes to how they deal with health insurance. In fact, just about all the evidence suggests small businesses are wary of the law, and that the trend of smaller companies dropping health insurance plans has continued since the bill was enacted. For instance, Fidelity’s survey of businesses last year showed that small business owners expected the new law to raise their costs.
Data that have been used to paint a picture of small businesses' uptick in insurance are likely flawed. Reports that the percentage of small businesses offering health insurance have risen are likely driven by the sheer number of small companies that went out of business during the recession. As Scott Shane said recently in Bloomberg, this is purely an effect of math, not evidence of an increase overall in small businesses offering insurance as a result of the health care law.
Nothing in the law does much to change the burden small businesses felt under rising insurance costs before it was enacted. Let’s not forget that for all of the hullaballoo about state exchanges for small business insurance pooling, and tax credits to make participation easier, the CBO estimated that the effects would be fairly minimal. Premiums were projected to fall between 1% and 4%. While any savings is helpful, such small percentages will not likely change employers’ plans to hire and add jobs to their firms.
The reality is this: no one knows exactly how Obamacare will affect small businesses’ costs over the next 5 years should the law remain in effect as is, but virtually nothing suggests the bill has anything positive to do with job growth or creating an environment in which companies will hire. The bill provides none of the comfort to enterprise that its supporters have claimed.
So this job falls to the Republicans. They would do well to make this a central issue. Along with focusing on the tax and spending implications of the bill, making a direct connection in the public's mind between their alternative health care policies and growth will be key to maintaining public support for repeal-and-replace.
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