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Report: Small Business Owners Ambivalent About the Public Health Care Option

Some owners believe a public health care offering will lessen the financial burden on small business, while others won't risk losing employees by canceling coverage.
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A new survey reveals the lack of confidence small business owners have in the proposed public health care option being debated in the Senate. On average, only 16 percent of small businesses would cancel their employer-provided coverage if there was a public offering, according to a monthly survey of small businesses conducted by VerticalResponse, a San Francisco-based provider of self-service email marketing and direct mail solutions.

Furthermore, the survey of 831 companies found that nearly 41 percent of businesses with 11 to 100 employees wouldn't cancel their employer-provided coverage if there was a public option and the largest portion of businesses with one to 10 employees also wouldn't.

As to why business owners are reluctant to toss coverage even with a public option on the table, VerticalResponse CEO Janine Popick believes it has a lot to do with employee retention. "In order to retain really good employees, the public offering would have to be lot better than what we offer. We have 98 people now, and when you start changing people's benefits at this size, you risk losing potential employees if health care is their focus. If I think I can save a few bucks, it's still not enough [to risk losing people]. I want to keep my employees happy and healthy," says Popick.

However, the report also revealed the disparity in health care conditions for small businesses of varying size. Nearly 72 percent of small businesses with one to 10 employees do not offer health care to their employees, compared with 24 percent of businesses with 11 to 100 workers.

"The large difference in opinions between small businesses of one to 10 employees versus those with 11 to 100 employees highlights that the current government must consider the diversity of the small business community--and it's paramount they canvass opinions of small business owners from various industries and company sizes as there's no one solution for all," says Popick.

However, some business owners are adamant advocates for the public health care offering, such as Theron Kabrich, CEO of the San Francisco Art Exchange (SFAE), who said he believes that "health care is more a right than it is a product." He explains why the health care debate is a touchy issue for him, personally: "The overarching view that I have is that I don't think anybody should have to pay for health insurance. Health coverage is a bargaining chip, a negotiated item – and it shouldn't be."

The SFAE does not offer health care to its 10 employees, and Kabrich said he views employer-provided health care as an additional burden for small business competition. "[Small businesses] are meant to be innovative in their sector, be it through widgets or plumbing materials or restaurants," he said. "[If we're dealing with] micro-issues, like health care, there is nothing innovative about that kind of conversation. It stops entrepreneurs and basically forces small businesses to take their eye off the ball. It causes many small businesses to go out of business."

Last updated: Dec 3, 2009




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