These small business owners are concerned and are saying that the rising health care costs is the primary issue confronting their businesses. More than one in three small business owners (36%) said that rising costs are likely to cause them to cut some portion of health insurance benefits for their employees, according to a survey released by the Robert Wood Johnson Foundation.
Business simulations done by the NFIB and other organizations have projected that 1.6 million jobs could be lost in the next 4 years because of rising health care costs. Out of these 1.6 million jobs lost, small businesses would account for more than 1 million or 66 percent of all jobs lost.
A recent CNN article highlighted the growing challenges that small business owners are facing when trying to compete with their larger corporate competitors. In the article CNN quoted Brian England, a Maryland auto shop owner, as saying, "A business down the road could have their [hourly] labor rate $5 cheaper than us because that's how much it costs for us to provide health care [to our employees]". Mr. England went on to say that after payroll and rent, health care is his largest business expense.
It is no longer a matter of debate and discussion. It is a matter of necessity for the survival of the American small business owner.
In 2007, there were an estimated 27.2 million businesses in the United States, according to U.S. Small Business Administration Office of Advocacy and businesses with fewer than 500 employees represented 99.9 percent of these 27.2 million businesses. The Office of Advocacy also recently reported that since the mid-1990s small businesses have created 60-80 % of ALL the net new jobs in the United States. In the most recent year with data (2005), employer firms with fewer than 500 employees created 979,102 net new jobs, or 78.9 percent.
According to an April 2009 Senate Finance Committee report, in 2008 the United States spent more than 17 percent of our gross domestic product (GDP) on health care more than any other industrialized country in terms of total and per capita spending. Yet with all this spending many of the health outcomes for the United States remain lower than the other G7 countries. Among countries belonging to the Organization for Economic Co-operation and Development (OECD) the United States was last in infant mortality, 6.9 infant deaths per every 1000, versus Japan which led with only 2.8 infant deaths per every 1000 births. The data for "Life expectancy at birth" was also not favorable to the United States which was again in last place with an average life expectancy of 77.9 years and Japan, Canada, and the other European countries all doing much better. Almost no one in this country can now sanely argue that "staying the course" would be a wise decision.
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When only 40 Republican senators and their back pocket lobbyists for Big Pharma and for-profit Health Insurance are all that is left standing in the way of 72% of the American public and 78% of the small business owners in this country, you know they have lost touch with reality.
Small business owners all across America are demanding for health care reform that will make their business more competitive and less handicapped in finding good qualified employees that would otherwise go to larger companies that can provide health care benefits at costs on an average of 18% cheaper than small businesses. But the private for-profit Health Insurance cabal doesn't want competition from the public option plan that is currently being proposed by the Democrats and they are spending 100's of millions of dollars lobbying congress to protect their cabal. They have a near monopoly like stranglehold on a product that most people are too afraid to go without and they know people will give up just about anything other than food, water, and shelter to keep their health care.
Forbes.com reported that in 2005 the CEO of the private health insurance company UnitedHealth Group, William McGuire made about 125 million dollars in salary and compensation. He ultimately walked away from the company with compensation and stock gains of almost 2 billion dollars before he was investigated by the SEC.
When many small business owners are forced to decide between offering a livable wage or health insurance, they are reduced in many cases to hiring sub-par employees or employees who are just out of college and do not have families. The top candidate choices, if they have a family that needs health coverage, will almost always look to the larger company for employment .... even if it is not the best fit for that person career-wise. Small businesses that face this dilemma find themselves unable to compete with larger businesses because they can't hire the best workers in their industry.
And it's not just small businesses. According to Harvard Medical School, about half of all personal bankruptcies are caused by medical costs. Illness leads to job loss, which leads to loss of health insurance, which culminates in enormous medical bills the average person cannot pay.