Women small business owners really need healthcare reform

August 4, 2009

– Nancy Duff Campbell is a founder and co-president of the National Women’s Law Center, one of the nation’s pre-eminent women’s rights organizations. A recognized expert on women’s law and public policy issues, for over thirty-five years Ms. Campbell has participated in the development and implementation of key legislative initiatives and litigation protecting women’s rights, with a particular emphasis on issues affecting low income women and their families. The views expressed are her own. —

Insurance companies and others who profit from our broken health care system are mobilizing to defeat comprehensive reform by using misinformation and scare tactics. A prime example is the allegation that healthcare legislation – specifically the plan being considered by the House of Representatives – will hurt small businesses.

The fact is that small business owners, especially women, are already hurting under our current healthcare system. Leah Daniels, 29, is the owner of Hill’s Kitchen – a gourmet kitchenware store that opened last May not far from the U.S. Capitol. Daniels can’t afford to offer health insurance to her three employees. She purchased her own bare-bones plan on the individual market for protection “in case I get hit by a car,” but not much else. It costs her just under $200 a month and doesn’t cover such services as routine doctor’s visits or maternity care. Daniels, who often works 7 days a week, says that she is constantly worried about getting sick.

Daniels’ problems are, unfortunately, all too typical. A new report by the Council of Economic Advisers (CEA) found that small businesses pay up to 18 percent more than large firms for the same health insurance policy. These higher costs mean that small businesses are considerably less likely than larger businesses to provide health insurance to their employees, and those that do tend to have less comprehensive plans. And Census data show that women-owned businesses are generally smaller than male-owned businesses.

Small business owners and employees who don’t get coverage at work or through a spouse’s plan may shop for insurance individually. But if they are women – and small businesses that don’t offer health coverage tend to have large proportions of female workers – they are likely to face discrimination in the individual health insurance market. A study by the National Women’s Law Center found that insurance companies routinely charge women higher rates than men for individual policies and offer policies that exclude health needs specific to women, such as maternity care.

Women who own a small business know that the current health care system is failing them. At a meeting of women small business owners in May, Daniels says, “We went around the room and everyone either had health insurance through their spouse or didn’t have coverage at all. Women talked about being afraid to go to the doctor because they didn’t want to find out that they might be sick. It was really striking.”

The healthcare reform plans that have begun moving through Congress would help make it possible for small business owners to offer comprehensive, affordable health insurance. The House plan would make insurance more affordable by prohibiting insurance companies from discriminating on the basis of health status or gender and by allowing small businesses to purchase coverage through a new Health Insurance Exchange. The Exchange would reduce administrative costs and offer a choice of plans meeting minimum benefit standards. New tax credits would be available to help some small businesses pay for employee health coverage; the credit would be worth 50 percent of the cost of qualified health coverage expenses for businesses with 10 or fewer employees and average wages of $20,000 or less. It would gradually be reduced until firms reached 25 or more employees or average wages of $40,000 or more.

If some employers still can’t provide coverage, their employees could purchase insurance directly from the Exchange. Sliding scale subsidies would help make it affordable, and they couldn’t be turned down because of pre-existing conditions or charged more because of their gender or health history. Larger employers who fail to offer health care coverage would be required to pay an additional payroll tax, but under the plan being developed by the House, businesses below a certain size would be exempt. One version would exempt businesses with payrolls of $500,000 or less. Another would set the exemption at $250,000 – but even at this level, 76 percent of all firms would be exempt.

Opponents of healthcare reform have claimed that small businesses would be hurt by another provision: a graduated surcharge on the very wealthy to help finance health care reform. But the surcharge would only apply to households with adjusted gross income above $350,000 ($280,000 for an individual). As a result, only the wealthiest 1.2 percent of taxpayers – and only 4 to 5 percent of all tax payers with business income – would be subject to the surcharge. Women-owned businesses are especially unlikely to be affected by the surcharge. According to the latest Census data, 96.3 percent of women-owned businesses, compared to 88.9 percent of male-owned businesses, had total receipts below $500,000 – meaning that profits would be well below that level.

Those who claim that healthcare reform will hurt small businesses should re-examine their facts – and the rest of us should examine who they’re really speaking for. We can’t afford to wait any longer for meaningful reform that will bring a guarantee of quality, affordable comprehensive health care for us all.

56 comments

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One option you might want to consider is a High Deductible Health Plan, I found some info on the web, Ill share it. Im not very good at posting links as Im not very tech savy….so if the links dont click just copy and paste them into the bar up there at the top. Ill put a couple in here for you though and hopefully it will help.http://www.twitter.com/highdeductib lehttp://highdeductiblehealthplan.blogsp ot.comyoutube.com/user/highdeductiblehea lthalso the website for this one company is http://www.highdeductiblehealthplanstoda y.comtheres plenty of info out there. Good Luck

Posted by Jordan | Report as abusive

Um Ted… Tax credits help even if you have no taxable income. They are credits, not deductions. Please get your facts straight. Health insurance reform would be incredibly good for small businesses under any economic situation.

Posted by Kirk | Report as abusive

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Posted by zararina | Report as abusive

Smart Lipo

The proposed plan discussed above is a much better solution than penalizing businesses that do not offer insurance. I’m a small company with 10 or less employees. Until 3 years ago I paid 100% health insurance coverage. Then I was forced to cut to to 50%. Last year the prices go so high that my employees nor I could afford the benefits at the 50% and we dropped it altogether and that was going through an employee leasing company and getting big company purchasing power. When we tried to get insurance for just our company all but one of us was denied coverage because of the state of our health. Ironically, the one employee that was able to get coverage had a tragic accident and was in a coma in the hospital for a week before dying and the insurance company had to pay those costs and his $25,000 life insurance policy. Sometimes I guess even a sure bet is not such a good thing. The rest of us without insurance are paying or own way and have not yet spent nearly what we would have on premiums alone.

Posted by Johnyc | Report as abusive

i like ur blog,i already bookmarked it.

Obviously the law has been enacted by now. We’ll see if it changes in the courts or through Congress. We’ve found http://www.ceowomensclub.com/articles/Fe male-Entrepreneurs-Reality that this is an important issue for women business owners. The cost and potential fear of getting sick can impact the most successful woman business owner

Posted by wtarken | Report as abusive