Small Biz Health Care Daily: New York Times, Small Business and Health Care

In its lead editorial on Thursday (August 13) titled “Health Reform and Small Business,” The New York Times concluded: “It makes good sense to us to require small businesses to contribute to solving a problem that mostly affects their own workers. There also seems little doubt that the small business community would be one of the biggest winners from health care reform.”

Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council, observed:

“The New York Times editorial page makes quite a claim about small businesses becoming ‘one of the biggest winners from health care reform.’ How do they get there? Well, it’s rather unclear from the rest of the editorial. They note one study from ‘a respected health care economist’ at MIT who found that ‘employers would reduce wages to compensate for providing benefits.’ Hmmm.

“And regarding ‘pay or play’ mandates and fines on businesses, the Times noted the following: ‘There is no question that the cost of coverage — which currently averages about $5,000 per individual or $13,000 per family — or paying fines could take a substantial bite out of the profits of some firms, forcing them to accept lower earnings, reduce wages, shed some jobs or raise prices.’

“And this as well: ‘We see no easy way to ease the pain of the minority of firms that will face very substantial new costs.’

“I’m still missing the big win here for small business. The Times tries to offset these points by claiming that government-run insurance exchanges will somehow magically reduce costs, despite the reality that such exchanges would be vehicles for jacking up mandates and regulations, and thereby reducing true competition. And the Times ignores the overall ills to the system from more government involvement – including increased costs and reduced quality of care – which obviously impact small businesses and their employees. In the end, the Times editorial is more wishful thinking, than sound analysis.”