Rising Health-Care Costs Hurt Small Biz

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The other interesting thing is that a large number of respondents—almost 30%—said they were not sure which proposal was preferable or they chose "none of the above."

That shows a lot of fluidity. Do you think entrepreneurs are willing to be persuaded about new options?

It shows that there's a huge diversity of opinion on this issue of how to reform the system. But we also asked about the tax issue, and there's less willingness there.

We asked whether these entrepreneurs would support increased taxes to pay for a universal health-care system. A significant number—40.3%—said yes, they are willing to pay additional taxes for a tax-funded universal health-care system. An additional 10.8% favor such a system, but are unwilling to see their tax bill increased to fund it. And just over one-third said they do not favor a tax-based universal health-care system at all.

Most who were willing to have their taxes increased favor keeping the increase to 5% or less, but about 40% said they would be willing to pay an average tax increase of 7.3% to fund universal health care.

Is that reflective of the other longtime top concern for entrepreneurs: taxes?

That's the issue, when you're looking at microbusiness owners and all the other burdens that are placed on them. The money they have left over from their company has to go to fund their retirement and to pay taxes. They already have cash-flow issues and many have a hard time getting by, so it's not surprising that there would be some trepidation about that approach.

They also expressed some worries about a government-run health-care system. What were they?

Most are concerned about the potential for reduced quality of care in a government-run system, and paying higher taxes. Lesser concerns included limited choice of doctors, long waiting times for nonemergency procedures, long waiting lists to see specialists, higher premiums, and lack of access to tests, treatments, or medicines. Entrepreneurs are very hands-on with their businesses. They worry that if the government runs health care, they won't be in charge anymore.

The survey presented several actions the government could take on health care. Which ones did they agree and disagree with?

Majorities approved of allowing small businesses to group together via associations or organizations to purchase health insurance, encouraging small business owners to purchase health insurance by providing tax credits, reforming tax law so that whether you buy health insurance individually or get it through an employer you get the same tax benefits, and increasing regulation on health insurance, pharmaceutical companies, and hospitals.

Near majorities approved of expanding government programs to cover uninsured children and low-income individuals unable to pay for coverage, and increasing funding to states for high-risk pools that provide coverage to individuals with chronic or terminal illness.

They disagreed with proposals that would mandate all employers to provide access to health insurance for full-time employees and require all Americans to purchase health insurance. For microbusiness owners—whose average gross revenue was $62,000 in 2007—a mandate that says they have to purchase health-care coverage for their employees is something they're concerned about, particularly if there are no tax credits or other incentives that would help them out.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.