Women Small Business Owners Really Need Health Care Reform

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.

Nancy Duff Campbell is Co-President of the National Women’s Law Center.

Like this story? Your $10 tax-deductible contribution helps support our research, reporting, and analysis.

For more information or to schedule an interview with contact press@rhrealitycheck.org.

  • invalid-0

    The most important thing right now is to know if Obama is LEGALLY president! NO BIRTH CERTIFICATE = NO PRESIDENT. We need one of our OWN KIND in the White house! Only Republicans seem to know that this is a nation RULED BY LAW!

  • crowepps

    We need one of our OWN KIND in the White house!

    Stupid people aren’t qualified to be President – look what a disaster Bush II was.

  • graceyd

    Medical cost is skyrocketing and it is battering family budgets and threatening American standard of living. People are up in arms over HR 3200, and maybe they should be. HR 3200 is a health care bill, and what it does is that it will provide affordable health care for all, and curtail medical costs. It also makes it mandatory for all Americans to have health insurance, but creates a government run (taxpayer funded) alternative to private insurance, prohibits exclusion on basis of pre-existing condition, and then (here’s the kicker) places a surtax on all households that earn more than $350,000 to pay for it. (To be fair, they don’t need sympathy.) The bill HR 3200 is likely to be wildly unpopular, even if it might mean fewer people needing emergency cash loans to see a doctor.

  • independentminded

    If it wasn’t for the fact that the United States government, overtime, has invested, or to be more exact, squandered humongous amounts of money on invading other countries with impunity and getting us into totally unnecessary wars, we’d have more money for comprehensive healthcare reform programs, not to mention a whole host of other things. Just saying.

  • http://www.b2bcfo.com/ invalid-0

    I understand that this was an article aimed at pointing out that women business owners need health care reform, but they are not the only ones. I agree that health care needs to be reformed and there are many issues that need to be addressed with it. I appreciate the article though.

  • invalid-0

    if this is a snark or a real nutjob here.

  • invalid-0

    As a UK citizen I have been avidly following the divisive debate regarding US health care reform on our television screens over here. The argument seems to focus government interference and bureaucracy at the expense of personal choice.I would advocate UK system as it delivers free health care to everyone regardless of their ability to pay and delivers it is extremely high standards. Of course its is not perfect and there are many examples where people who can afford to pay will receive better health care than the average member of the UK population. But for small business people not having to worry about paying for valuable time spent being treated is a godsend (particularly when many small firms are feeling the economic affect of the credit crunch). The cost of health insurance for additional premium services is also well within business people grasp to ‘top up’ things that are personally important.