Sorting Through Small Business Health Reform Polling

Posted by: John Tozzi on July 29, 2009

I haven’t seen any conclusive polling on how much support or opposition there is among small business owners for health reform that would require them to provide coverage or pay a penalty.

The NY Times’ Robb Mandelbaum has an extended explanation of why he can’t report on polling conducted by Small Business Majority, a health reform advocacy group that is broadly pushing policies like an employer mandate favored by Democrats. (The survey was conducted by one pollster who mainly works for Democrats, and didn’t pass muster with Times editors.) But Mandelbaum did report on a leaked poll from the National Federation of Independent Business, conducted by Mason-Dixon, that found the following:

Mason-Dixon asked businesspeople to respond to the statement, “All employers should be required to offer health insurance to all their full-time employees and pay 60 percent of the premium.” Seventy-nine percent disagreed; 63 percent strongly so. The margin of error is plus or minus 5 percent.

A few points on this:

[See update below]

1) It’s not entirely clear who the sample is, but Mandelbaum suggests they polled 500 NFIB members and 500 randomly chosen companies with fewer than 250 employees. I’m guessing NFIB membership skews conservative. To the extent that’s true, if NFIB members were a disproportionate part of the sample, that would affect the poll results. The poll isn’t public yet, so it’s hard to tell.

2) The statement the poll asks people to respond to — “All employers should be required to offer health insurance to all their full-time employees and pay 60 percent of the premium” — doesn’t actually represent any proposal on the table right now. Both reform plans from the House and Senate health committee have exemptions for companies under a certain size, so no one is talking about requiring “all employers” to pay 60% of premiums. As Mandelbaum’s fellow blogger Scott Shane points out, the penalties for not providing coverage “will be concentrated on only about 5 percent of businesses.” It’s those companies at the margin that this debate really focuses on, and as Shane points out, they would take a hit under the House bill. But they certainly don’t represent “all employers.” Indeed, what size companies are subject to “play or pay” mandates is one of the central questions for small business.

The best polling, though imperfect, that I know of on the question of requiring employers to provide coverage comes from a bi-partisan survey released last December by the Robert Wood Johnson Foundation. Two pollsters — one Democratic, the other Republican — surveyed 400 small business owners with between 2 and 50 employees. It’s important to note that all businesses in this sample already paid for at least some share of their employees’ health insurance — so the sample is not representative of all small employers. Here’s what they found on “pay-or-play” mandates:

When asked if they would support a plan requiring employers with 10 or more employees who do not provide health coverage to pay four percent of their payroll to help cover the uninsured, a majority (53%) of those surveyed favored the proposal.

and

40 percent of small business owners said they think a mandate requiring employers to offer insurance to their employees would hurt their business.

If you’ve seen better polling on this, let us know in comments or on Twitter. And if you’re taking part in the online White House chat with economic advisor Christina Romer today, let us know what you think. What would an employer mandate mean for your business? Has Obama made the case to you for reform? What kind of changes do you want to see?

Update, July 30: Robb Mandelbaum emails to clarify that the results he reported were from the random sample of businesses with 250 or fewer employees from the D&B database.

Reader Comments

Dr. Bob Graboyes, NFIB

July 30, 2009 05:01 PM

You're puzzled over who was in the Mason-Dixon sample; but I think Mandelbaum described it clearly: Mason-Dixon sampled 500 random small employers from Dun & Bradstreet's files AND 500 NFIB members to guard against philosophical bias. The two samples yielded virtually identical results. (And, btw, it wasn't "leaked" – we would gladly have provided it to BW. A quick call to us or Mandelbaum would have easily alleviated your confusion.) ... Further, if you're still wondering why the Times covered NFIB's poll but not SBM's – as Mandelbaum explains, the Times concluded one was conducted reputably; the other was not. ... The Robert Wood Johnson piece you declare "the best polling" has a very interesting caveat: it only surveyed firms who already pay for employee health benefits, so it's biased in this context. ... Finally, you twisted Scott Shane's words to imply the opposite of what he said. The out-of-context quote said penalties for not providing coverage "will be concentrated on only about 5 percent of businesses," which you dismiss as "at the margin." But beginning 2 sentences later, Shane devotes 12 excellent paragraphs to explaining that those 5 percent employ 37.9 million Americans and "are going to get walloped."

James

July 30, 2009 05:15 PM

As a small business owner I do not understand why I should be told what benefits I have to give to my employees. I am already paying for other peoples medical coverage through my Medicare and Medicaid taxes. If we are going to talk about health care, the first item on the agenda should be the repeal of medicare and medcaid taxes. If that is not politically practical, then I should be allowed to buy into the medicare system with the taxes I am already paying. I am already having to pay for my own health care. I am also having to pay for medicare. Now on top of that I would have to pay for employees health care. Where does the government think this money is going to come from? This is a zero-sum-game. Money is not being created to pay for this program. It will be taken from other areas of business which will limit the number of employees I will hire and the salary I can afford to pay.

Ralph Jensen

July 30, 2009 06:26 PM

I am a small business owner who works exclusively with other small businesses. I don't need a poll to tell me that small business owners are opposed to having the government mandate health insurance of any kind. We are supposed to be free. That includes free to decide not to buy health insurance.

John Tozzi (BusinessWeek reporter)

July 30, 2009 10:06 PM

Hi Bob,

Thanks for your comments, and I’d like to respond. As I noted in the update above, Robb emailed to clarify that the results he reported were based on the random sample. Regarding my use of the word “leaked,” in the post Robb writes that the poll “has not yet been publicly released but was made available to The Times.” Readers can judge whether that constitutes “leaked” or not. If you want to send it over, I’m happy to look at it: john_tozzi@businessweek.com.

I didn’t wonder in my post why the Times covered NFIB’s poll and not SBM’s. Robb’s post is clear about the Times’ procedures.

Agreed that the RWJ polling is from a sample of business owners who already provide some health coverage – I pointed that out as a caveat above before reporting their results.

I don’t think I twisted Scott Shane’s words – it’s a fact that the “play or pay” mandate being discussed would affect a small percentage of businesses that are too big for the exemption but not so large that they currently provide health coverage. My use of “at the margin” was not meant to be dismissive – it’s meant to refer to those businesses on the border of being effected by the mandate. No question that they would get hit – Scott’s post noted that and I repeated it. No disagreement there – it’s a real issue and we’ve been covering it.

But it still stands that the question Mason-Dixon polled on – a mandate that requires “all employers” to pay 60% of premiums for all full-time workers – does not represent any proposal currently being considered. No one is talking about a bill that would make every employer, no matter how small, even if they have just one full-time employee, provide coverage. So we should keep that in mind when evaluating the results.

Thanks,

John

John Arensmeyer

August 3, 2009 07:43 PM

Dismissing the results of Small Business Majority’s surveys entirely based on the perceived political leanings of the pollster is curious. Regardless of who conducted the poll, the data speaks for itself. We polled randomly selected small business owners in 16 states, and an average of 40 percent identified themselves as Republicans. Twenty-eight percent identified as independent, and only 23 percent called themselves Democrats.

An average of 50 percent of those business owners agreed an employer should pay some percentage of their payroll toward their employees’ insurance if they don’t offer a plan themselves. An average of 65 percent agreed with the statement, "In order to make healthcare more affordable, it is important to share the responsibility for financing it among individuals, employers, insurance companies, providers and government."

What’s compelling and relevant about this data is not who asked the questions, but who answered them – especially given that fewer than one in four respondents identified as Democrats. Small business owners across the nation, regardless of their political bent, are clearly crying out for healthcare reform. Our current healthcare system has burdened small business owners with exorbitant costs and stifled entrepreneurship, and they are willing to do their part in order to get some relief.

John Arensmeyer, Founder & CEO
Small Business Majority

Barbara Miller-Collins, C.E.O.

August 8, 2009 01:04 PM

I am C.E.O. and owner of a micro sized high tech manufacturing corporation founded by my deceased spouse. It is my experience that small business with under ten employees is a far cry difference from a small company of 499 employees or even 100 employees. NFIB does not differentiate between the insurance companies that fall under the category of “small business” and my micro-sized business. I dropped my membership because my interests were thus not well represented by NFIB.

I have been writing and hoping for meaningful health care reform since 1992 after my husband of 22 years passed away from Hodgkin's Disease. That illness lasted almost nine years, included three occurrences, two bone marrow transplants and the depletion of our savings. His medical insurance company, Mutual of Omaha, used every trick to avoid covering his second prescribed bone marrow transplant. It refused to accept that he was diagnosed with cancer even though it had covered his previous medical care for the same cancer. They caused a four month delay in treatment that in the least hastened his early death at age 52.

After four months of my telephoning that insurance company every day, it took former Senator Morrison (R) and former Congressman Jim Jesernig (D) only one day to obtain approval for treatment of my husband. But it also took my imminent legal action to cause the insurance company to pay their contracted obligation for my husband's medical treatment.

That is not the only reason why I am still passionately for health care reform in this country. My husband and I had the resources to buy health insurance and to meet those medical challenges and later my own breast cancer. But others do not. I watched the heartbreak of a young husband whose wife, the mother of his three small children, was diagnosed with ovarian cancer. He did not have the resources to pay for her medical coverage. Oh yes, this young man was a small businessman, a lumber mill operator in Alaska. This awoke a passion in me to seek justice for him and for the millions of other Americans who do not have the resources to pay for medical care.

June, 2009, Julie Ruggles died at age forty five of a heart attack. The coroner's autopsy revealed the heart attack was caused by a severe deficiency of vitamin B. Julie had been diagnosed with MS years ago. Living in poverty, she had no medical insurance. DSHS had turned her down for Medicaid coverage despite the fact that she was in a wheel chair and chronically ill. Her extended family who have limited financial resources, watched her health decline this past year knowing that she would die because she couldn't afford medication or to go to the doctor. She was hospitalized two weeks before her death with a grand mal seizure. Finally, a hospital assigned social worker obtained approval from DSHS for her home health care and Medicaid. Word of this reached Julie the day before she died. Her 83 year old mother is somewhat comforted that Julie died at peace believing that help was on its way. I feel anything but peaceful about that.

We have been in business 23 years. Our market is national and international. Our biggest long term business challenge is to afford health care benefits for our employees. Add an additional 20 per cent on top of labor costs for group benefits of medical, vision and dental insurance. It has been a struggle to raise capital in order to develop the new products that allow us to remain viable in the marketplace. My employees tell me that they are working for their medical benefits which are even more important to them than the salary. I also work for those all important medical benefits since surviving breast cancer in 1995.

My spouse and I are fortunate to be double insured through two employers. My company alone pays over $1,600 each month for just us two. I pay over $500 each month "out of pocket" in pretax dollars as my share towards our two insurance plans. My husband makes a similar contribution. We also make "out of pocket" co-pays for medicines, doctor office visits and for chiropractic care. My company renews this expensive plan grumbling every year because it is the best of the very few group plans available to our micro size corporation in Washington state. Another reason to retain this expensive plan is that it has a stop gap clause that limits out of pocket expense after we have paid one thousand dollars. This is important should one of us be overtaken with an expensive chronic illness or serious medical event that could bankrupt us.

One would think that our two plans would cover all of the medical expense. Yet our doctors also have to write off a significant portion of their/our bill as dictated to them by the insurance companies. "Pay to play" say the insurance companies.

Health care reform issues are complex. These issues must first be examined for the big picture. In 1992, the only sector of the American economy that was growing was the Health Care sector. Imminent economic problems loomed in the U.S. but were delayed as the "dot com industry" emerged to give a boost to the U.S. economy. Those better economic times are long gone. Today the U.S. employer based health insurance system is no longer supportable after a long spiral downhill.

Our U.S. employer based health insurance system began failing when the insurance subscriber pools began shrinking as jobs were lost to overseas employers who do not provide health care for workers. Yet those countries are rewarded as they compete to advantage for market share in the world's number one marketplace, the U.S.A.

The size of our American insurance subscriber pools continue to shrink as employers shed jobs and employees. Premiums continue to rise significantly to those businesses still able to insure their employees. Premiums rise even higher for those who are unemployed and are forced to seek individual health insurance on their own. Many unemployed can no longer afford it.

U.S. employers are affected by globalization. Employers are trying to compete with international companies in order to stay in business. Thus, incidence of underemployment occurs where employers try not to hire new employees. They make do by requiring their employees to work overtime. This practice avoids the need to pay out additional medical benefits for new hires. But it puts the employee at greater risk for health problems. Yet an employee's ill health in turn causes these employers' insurance rates to rise.

The qualified family man with a wife and five kids who needs expensive medical benefits is quietly discriminated against by some employers offering health care plans. Instead the single employee is preferred as more affordable. Or the employer simply does not cover dependants.

More and more employers dump medical benefits completely. Employers can also obtain their labor and services overseas. Some employers can avoid paying medical benefits by hiring only part timers or by using private labor pools.

The insurance medical premiums continue to rise dramatically helped along by underemployment, a shrinking subscriber pool and also the standard practices of insurance companies.

All U.S. insurance subscriber pools are artificially shrunk through the insurance industry's standard practices. Their policies limit subscriber pool size on the basis of business size. They limit access to a subscriber pool on the basis of employer's location, age, sex and pre-existing health conditions. Some even try to reimburse on the basis of poor medicare coverage standards.

I had a 62nd birthday and am now suddenly refused care by prospective new specialist MDs despite having two insurance providers. It seems that physicians look forward to my turning 65 "soon" and therefore attaining Medicare coverage. Never mind that I can't afford to retire or seek Medicare until age 70. They don't want to lose money in exchange for healing me.

Physicians are businessmen and caught between a rock and a hard place. They are ultimately dispensers of product for the pharmaceutical companies. Their patients can't afford to buy the pharmaceuticals without insurance. The insurance companies demand financial concessions in order to give a doctor "preferred provider" status so that their subscriber can afford to seek the doctor's care and prescription.

Then enters the government assisted Medicare covered patient whose provider reimburses so slowly and poorly that the doctor's costs are not met. Add to that mix, the liability insurance company that punishes the doctor for treating the truly sick by charging extremely high liability insurance fees. The doctors struggle to afford the fees. Many are leaving the business. Some avoid and limit treatment of patients that might die under treatment in order to avoid even higher fees. Thus high fees work doubly well to increase profits for the liability insurance companies.

All in all, we the U.S. citizens are at the bottom of the food chain. Our health is at risk because of limited access to affordable health care. The poor can do without medical treatment like Julie Ruggles, ultimately suffering greatly before dying prematurely. The middle class can avoid retirement, working until we die of natural causes in order to pay for private health insurance as long as possible, thus unable to afford retirement. Any of us can become bankrupt in order to preserve the life of our loved ones. Businesses can send our jobs overseas. American companies can close our factories where working men and women used to earn a living wage. But is this what American citizens want or deserve? No. No. No.

Our U.S. constitution espouses the values of life, liberty and the pursuit of happiness for all citizens. It never mentions "Business" as more important than the individual. I support single payer universal health care. It would be good for everyone especially for the American small businesses that drive the U.S. economy. We must not allow the powerful health care and insurance lobbyists to determine otherwise. Americans need the other sectors of the American economy to grow faster than the health care sector.

I hope to see legislation passed that offers a single payer universal health care that covers all citizens. Meanwhile I must support the compromise health care reform being crafted by President Obama and many legislators like Senator Ted Kennedy. I only hope that the final version is not so watered down as to be fatally flawed.

Barbara Miller-Collins
President
Chemchek Instruments, Inc.

Squeezebox

August 10, 2009 09:55 AM

Health care reform doesn't go far enough. Not only should companies be prohibited from cherry picking patients, but they should also be prohibited from cherry picking groups. Every employer should pay the same premium per person no matter how big or how small. Every person should pay the same premium no matter who they work for. And we need a national VAT tax like other countries have in order to make imports pay their fair share of our social costs.

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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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