Obama Makes the Case to Small Business for Health Care Reform

Posted by: John Tozzi on July 28, 2009

This week small business is a big part of the health care narrative the White House is pushing. Over the weekend the White House Council of Economic Advisers released its take on how health care reform will effect small businesses and their employees. President Obama made the case directly to small business owners in his weekly YouTube address below.

And on Wednesday, Christina Romer, the chair of the White House Council of Economic Advisers, will answer questions submitted by small business owners during a live chat at 3 p.m. ET. (You can submit questions here or on this LinkedIn discussion thread.)

Separately, Senate Democrats will hold a press conference Wednesday morning in Washington to make the case that health reform benefits small businesses. Members from the committees on Small Business (Mary Landrieu, D-La.); Health, Education, Labor, and Pensions (Jeff Merkley, D-Ore.); and Finance (Blanche Lincoln, D-Ark.) will be there. The HELP and Finance committees are drafting the two main proposals in the Senate. Politico reports that the Finance committee plan may drop the requirement for all employers to provide insurance. That would go a long way toward appeasing critics of the bill who say it’s too burdensome on business, like the NFIB.

It’s worth noting that in the YouTube address, Obama doesn’t touch on the employer mandate. Here’s how he describes the plan (starting about 2:10):

Under the reform plans in Congress, small businesses will be able to purchase health insurance through an “insurance exchange,” a marketplace where they can compare the price, quality and services of a wide variety of plans, many of which will provide better coverage at lower costs than the plans they have now. They can then pick the one that works best for them and their employees.

Small businesses that choose to insure their employees will also receive a tax credit to help them pay for it. If a small business chooses not to provide coverage, its employees can purchase high quality, affordable coverage through the insurance exchange on their own.

That doesn’t sound like the proposals already out from the Senate HELP committee and the House, which require companies over a certain size (either 25 employees or $250,000 in payroll) to buy insurance or pay penalties. It sounds a lot like a description of the forthcoming Finance bill in today’s Times:

The Senate [Finance] group also seems prepared to drop a requirement, included in other versions of the legislation, that employers offer coverage to their workers. “We don’t mandate employer coverage,” Senator Olympia J. Snowe, Republican of Maine and one of the six, said Monday. Employers that do not offer coverage may instead have to pay the cost of any government subsidies for which their workers qualify.

It sure sounds like Obama’s signaling that he’d sign a bill without an employer mandate, and that would help bring moderate Republicans like Snowe on board. (She’s also the ranking member of the Senate Small Business Committee — Landrieu is the chair.) The question then is how much push back from liberal Dems the plan would face, and that would likely hinge on other factors like whether or not there’s a public insurance option.

But for right now, at least, policy makers are focused on small businesses’ stake in health care reform, and the discussions this week may be crucial in shaping small business provisions in a final bill.

Also: Don’t miss this excellent graphic from the NY Times on how the proposals would effect different types of workers and business owners.

Reader Comments

GmcG

July 29, 2009 10:40 AM

The CEA report relies heavily for the views of small business on a study produced by the Small Business Majority (SBM).

But the interesting part came with I read a blog from the Times Monday and the SBM was mentioned again.

http://boss.blogs.nytimes.com/2009/07/26/more-polls-partisanship-and-the-small-business-majority/?scp=1&sq=small%20business%20majority&st=Search

This post talks about why the New York Times can't and won't use the numbers provided by SBM.

Why exactly the is the White House and the Council of Economic Advisors relying on a possibly partisan study that even the New York Times won’t use.

Kelly

July 29, 2009 2:31 PM

Small businesses with $250,000 - 400,000 payrolls would be devastated if they are required to pay for insurance or a tax penalty (about equal to insurance) if they don't offer it. This is small business suicide, particularly in these difficult economic times. I know the first thing we'd have to do is to terminate at least one person to pay for the insurance - we've already done every other cutback possible and have no excess funds to pay for insurance. Not even $6,000 - $8,000 a year which would be the min, I could imagine.

This needs to be addressed and I hope that what I heard about a potential exemption for employers with under $500,000 payroll is true. If not, unemployment is going to skyrocket.

John Tozzi (BusinessWeek reporter)

July 29, 2009 6:26 PM

Just out from Politico: The House version will now exempt companies with payroll below $500,000, not $250,000. http://www.politico.com/news/stories/0709/25570.html

Kari Kounkel

July 30, 2009 12:08 PM

We pay our employees as well as we can, and our payroll is nearly $1 million annually.

I cannot find space in our budget to increase health care for the part-time staff without reducing total staff.

This pending legislation is a potential back-breaker for our company.

keith mcaleer

December 24, 2009 9:11 AM

Fire the bums and vote republican next time.

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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