Who truly speaks for small businesses?
Everyone knows that small businesses hate President Obama’s historic healthcare reform law, right? At least that’s what the nation’s leading small-business advocacy group would have you believe.
Joining 26 states, the National Federation of Independent Business challenged the law all the way to the U.S. Supreme Court in March. It claimed the “individual mandate” is unconstitutional and would bankrupt small businesses with unnecessary costs.
Yet while the NFIB claims its multimillion-dollar lawsuit is on behalf of job creators and small businesses everywhere, it’s unclear whether small businesses genuinely support the NFIB position. A close look at its record suggests that the NFIB uses the politically valuable mantle of small business to pursue an agenda that may take its cues from elsewhere.
For one thing, many of its 340,000 members, most of whom employ 20 or fewer workers, have already benefited from the law. According to a March report in the Wall Street Journal, members have seen costs go down thanks to tax credits that were built into the law. Small firms in industries like advertising have also been able to compete with large national companies for talented employees. As one member told the WSJ: “[The NFIB is] doing a very big disservice to their members” by opposing the healthcare law.
For another, the NFIB has a record of lobbying for issues that benefit big businesses, not necessarily small ones. Consider a widespread state tax loophole that lets big-box retailers like Wal-Mart and Home Depot transfer income to out-of-state subsidiaries. This loophole often allows the chain retailers to pay no state income tax, while small businesses do. Yet the NFIB has fought against closing such loopholes.
Moreover, small businesses generally favor some kind of regulation, because such standards often make them more competitive with big companies. The NFIB is opposed to regulation on principle, but it also claims, as many Republicans do, that the threat of regulation on entrepreneurs and job creators – they have a habit of calling it “regulatory uncertainty” – has kept businesses from hiring and thus from stimulating the economy. But observers across the political spectrum say this is a canard. Regulation isn’t preventing businesses from hiring. Poor sales are.
Perhaps it is no surprise that the NFIB fights for issues that the Republican Party as well as big corporations also fight for: deregulation, lower taxes and tort reform. According to the Center for Responsive Politics, the NFIB’s political action committee has raised over $20 million since 1998. In 2010, nearly 94 percent of contributions went to Republicans. This year it’s 98 percent. It spent $9.5 million lobbying against the healthcare reform bill in 2010. And last year, the NFIB received $3.7 million from Crossroads GPS, according to Bloomberg. Crossroads GPS is a non-profit with close ties to Karl Rove, the political adviser of George W. Bush.
Here’s why health insurance is not like broccoli
The fate of universal healthcare coverage that the United States has been trying to achieve for over 100 years may boil down to broccoli.
The broccoli argument is simple and was frequently referred to in the recent Supreme Court arguments: If the government can require people to buy health insurance, why couldn’t it require people to buy broccoli, which also enhances people’s health? This question, at the heart of the conservative objection to the individual mandate to buy health insurance, illustrates the so-called limiting principle the Supreme Court must rule on: Under the Commerce Clause, does Congress have the constitutional power to compel people to act, in ways they might object to, when their inaction can harm others?
The High Court never got clear on why health insurance is not like broccoli and can thus be constitutionally regulated. There are two important differences that inform the principle for limiting congressional power to compel people to purchase goods and services.
First, as George H.W. Bush made quite clear, you need never eat broccoli. But unless you are a hermit in Alaska, you will use healthcare at some point in your life. Today, it is estimated that the uninsured use more than $116 billion in healthcare services each year. When they will need healthcare is unpredictable. If they are lucky – only at the end of their life. If they are unlucky, an accident, unplanned pregnancy or cancer diagnosis may compel an earlier need for a physician, hospital services, or both. What happens if they don’t have health insurance? Thankfully, doctors and hospitals don’t turn them away when they most need care. They give them the tests and treatments they need – at least to get over the emergency or acute episode. Thus, while it is feasible that you may never be engaged in the broccoli market, at some point, everyone – including the uninsured – will be engaged in the healthcare market.
Why couldn’t we let people voluntarily decide whether they want health insurance or not, instead of compelling them to buy the insurance with the mandate?
Unlike broccoli, when some people don’t participate in the health insurance market – 50 million people in 2009 – there are direct consequences for the insured who are participating. The costs of caring for the uninsured are shoved onto the rest of us through higher insurance premiums or taxes that hospitals, insurers and doctors must charge to recoup the costs of uncompensated care.
Voluntary health insurance exchanges piloted in several states without mandates all failed because healthy people opted out. Those who are relatively healthy figure the cost of insurance is too high, that they are subsidizing insurance premiums for sicker people and they probably (it is a risk) won’t need the insurance because they are healthy. When some healthy people stop buying coverage, the premium goes up for the remaining slightly sicker people. Then, as premiums go up, more and more healthy people drop out, creating an inevitable downward spiral. This is cost-shifting from the uninsured to the insured, and it is true not just in theory, but in practice. We have tried many such exchanges, and they have all failed. Only the Massachusetts exchange has worked because of its mandate requiring healthy, as well as sicker, people to buy insurance.
Yes, broccoli is a provocative reduction, a way to belittle the importance of the individual mandate to buy health insurance. In fact, I would say that we are required by law to buy food, although we have our choice whether or not to choose that vegetable over another. If you do not buy food and your children suffer, that would be grounds for the state to charge you would neglect or even abuse. If you as an adult individual refused to buy any food for yourself, then you would likely get in trouble. You could go to a food pantry or a soup kitchen and get by on some days, but you could end up in jail (for stealing food) or you for disorderly conduct if you went to a restaurant and insisted on your right to eat without paying.
The individual mandate is the good old American value of taking individual responsibility for your life, contributing your fair share towards your own health care and realizing that you are part of a health care system. It is very much closer to the requirement to buy car insurance — and there has been some cost shifting there as well because we have an uninsured motorist cost on the car insurance bill.
The individual mandate was a conservative Republican idea to begin with in order to counter the Democrats’ idea of an employer mandate, so it is so obvious that Republicans and Tea Party folks are against it now only because Obama adopted this provision in the law that was passed under his watch as President! The individual mandate is part of RomneyCare in Massachusetts. One of the sickest things about this political season is to see Mitt Romney running against a national health care reform law that is modeled after one of his best achievements as Governor or Massachusetts!
America’s Canadian road trip starts today
By Sally Pipes The opinions expressed are her own.
Today, several of the more popular provisions of the president’s health reform law go into effect. Adult “children” will now be able to stay on their parents’ policies until they turn 26, and insurers can no longer impose lifetime limits on the amount of coverage they provide.
Nevertheless, congressional Democrats are running away from Obamacare as fast as they can.
Late last week, Rep. Gene Taylor (D-Miss.) became the first Democrat to sign a “discharge petition” circulated by congressional Republicans as the first step toward repealing Obamacare. At least five Democrats are running ads touting their votes against health reform. And Democratic candidates have spent three times more on ads criticizing the health overhaul than on ads supporting it.
Their apprehension over Obamacare is warranted. The new health reform law will not deliver the savings the president promises, will cost more than advertised, and will not achieve universal coverage. Instead, the president has placed America on the path toward a single-payer, government-run healthcare system.
Speaking as a Canadian who has experienced socialized medicine firsthand, I urge America not to go down that road.
What the author leaves out is the plain fact that “around the world” whether you live in a capitalist society, communist society, or socialist society you are free to seek the medical care of your own choice, you just have to pay for it. American medical plans exclude all kinds of treatments on a variety of grounds, but mainly because they will cost the insurer too much, which means reduced profits.
Of course a government providing socialized medicine is going to try to keep costs down by rejecting costly treatments. There has to be enough money to go around right? The difference is that an insurer is going to try to make a “profit” not just break even. It is not fair to Americans to sell them “for profit” plans with high premiums and limited care. It is an obvious conflict of interest between the consumer and insurer.
American insurers have been spreading a bunch of baloney about how medical costs have increased so they have to raise our premiums. Do you actually know a doctor or two? Have you talked to them about that issue? Perhaps you should. Or perhaps they are sucking up all the little perks provider to favored doctors by drug companies?
The American doctors I know are not fooled by insurance company rhetoric and are pretty disgusted with the insurance industry. They make decent money and have not seen “their” costs rise. We talk about these very issues. They did not go into medicine to have insurance companies directing patient treatment. If you think that your insurance company has “your” best interest at heart when you have a serious and costly condition, I’ve got a bridge . . .
Get real. A sick person is just a liability in for profit America. Sick and cannot work because you got cancer? Bye, bye employer provided health insurance, you are going to lose your job, and without a job you cannot afford your insurance premiums. Next you will be on disability and then a liability for the rest of us tax payers. And without a job, the government will pay most of your medical because you “will” qualify for state or federal and programs which pay next to nothing to doctors. And you don’t think “that” is socialized medicine?
Healthcare in America is on par with healthcare in Estonia. Seriously. Research the issue. Get a passport. Travel around Western Europe. Actually see and experience the counties you are not familiar with.
CaptnCrunch, as a card carrying left wing “liberal” Democrat who believes your guns would make an excellent artificial reef, you are what I miss the most about the real Republican party – a thinking mind with a sensible opinion.
I’m sure that after a passionate exchange of ideas while having a couple of beers, you would leave understanding my views and I would leave understanding yours.
Please take back your Party… please!