By John Kabateck, NFIB/CA Executive Director
This week we celebrate our nation’s independence, but ironically, we must also recognize that our relationship with the federal government has just been profoundly changed by the latest U.S. Supreme Court decision.
The Patient Protection and Affordable Care Act (PPACA) does not work for small business. This is the mantra the National Federation of Independent Business (NFIB) repeatedly heard from its membership. The law failed to control rising health-care costs and violated individual liberty. Encouraged by consistent feedback from membership and these significant flaws in the law, NFIB filed a lawsuit as a lead plaintiff that was dismissed by critics two years ago, but amounted to one of the most historic challenges in modern history. Small business, the little guy, challenged the expanse of the federal government and earned its right to be heard.
The cost of insurance is on a course for outer space. The rising cost of health insurance has been the number one concern of small business for over two decades. The cost flight and coverage plight have been especially damaging over the last decade. According to the Kaiser Family Foundation, the cost of employer-sponsored insurance rose 103 percent between 2001 and 2011. The proportion of small businesses offering health insurance dropped from 67 percent to 59 percent during the same period. We can expect those trends to continue, as cost and coverage are inversely correlated.
Worse, small business owners and their employees pay more for health insurance than large corporations. According to one study, employees in small businesses pay 18 percent more in premiums than employees of big firms. New taxes, mandates, and reporting requirements in PPACA will act as an extra boost on the galactic journey. Many of these harmful provisions only apply to the market where individuals and small businesses purchase coverage, and threaten to further erode private market coverage and exacerbate skyrocketing insurance costs to small businesses and their employees.
The decision to uphold PPACA in its entirety erodes personal freedom and vastly expands the powers of the federal government. The Founding Fathers envisioned the federal government to have powers that were few and defined, limiting the reach into citizens’ personal lives and liberties. Now, the federal government can and shall dictate how individuals spend their hard-earned dollars, mandating the purchase of expensive health insurance. As Justice Kennedy stated during the oral arguments, “that changes the relationship of the federal government to the individual in the very fundamental way.”
While the decision did not yield the desired result, NFIB will continue to fight on behalf of its membership for market-based reforms that lower the cost of health insurance. Long before we filed suit, we were pushing for market-based reforms―all intended to create a system that fits better into the American free-market system. Solutions begin with increasing free-market competition―historically the best path to lowering costs and ultimately increasing coverage. Insurers should be encouraged through state and federal approaches to offer more innovative insurance options in the small group and individual market―where small business, the self-employed and individuals purchase coverage. In turn, small-business owners and employees need more flexibility to build plans that suit unique needs and budgets. Free-market competition should also eliminate the current arbitrary lines of state boundaries that small business faces when trying to secure health insurance options. There is little justification why big businesses can purchase across state lines and small businesses cannot.
Similarly, making health insurance truly portable will improve competition and enhance individual control. Employees should be able to keep their insurance when they change jobs, allowing them to own and control their policies in the same way they own and control their auto insurance, property insurance and life insurance. After all, being anchored to your boss because of insurance is the ultimate insecurity. This is a win-win for both the employer and the employee.
An option that should be part of any future health-care reform effort is the idea of putting individuals in control of the kind of health insurance they want to purchase. This can be done in tandem with the current employer system by providing an account to an employee where the employer contributes an amount of pre-tax dollars towards the purchase of insurance, removing barriers of entry to providing health insurance. We also need to ensure fair tax treatment by extending tax parity to any purchaser in the health insurance marketplace, whether you are an individual, self-employed or the employer.
NFIB stood up for liberty and defended our mission to promote and protect the right of our members to own, operate and grow their businesses. Despite the fundamental change in the relationship between individuals and the federal government, NFIB will continue to push for real reforms that lower health-care costs and protect our members.