Reduce health care costs to increase level of coverage
TODD STOTTLEMYER NFIB President and CEO
You've probably heard a saying that goes something like this: When California sneezes, the rest of the country catches the flu.

The metaphor describes how the Golden State frequently sets trends that sweep across America like a virulent infection. Sometimes the trends are harmless, even fun, such as skateboarding or in-line skating. Other times, the standard California sets is ultimately beneficial, such as those that have led to lower vehicle emissions and cleaner air.

But there's a health care proposal in the California Senate that has small business owners worried about its potential to spread. A bill intended to reduce the number of uninsured, working-age Californians and their dependents would do so by requiring employers, including all small businesses, to spend at least 7.5 percent of their payroll on health insurance.

Employers who spend less than that now will pay the state the difference between 7.5 percent and what they now spend. Those who don't offer any health insurance would be required to pay a 7.5 percent payroll tax. The money would help pay for private insurance plans for those who can't obtain health insurance through an employer or who fall below a certain income level.

At first glance, a plan to require health insurance coverage for all may appear to be a good idea. And in fact, most businesses recognize that they need to help contribute to solving our health care crisis in some way and understand that a good benefit plan helps attract and keep talented employees. But why should employers, including the smallest of businesses, be forced by the government to shoulder this burden?

The California proposal doesn't recognize that some business models simply can't afford these additional costs. Nor does it make any distinction between a business with one employee and a corporation with 50,000.

A recent study by the National Federation of

Independent Business' Research Foundation shows that the California plan would cost employers an additional $8.3 billion in taxes, administrative and other costs. Businesses would lose approximately $67 billion in sales, and the plan would lead to 249,000 lost jobs within five years of the proposal becoming law. This would completely reverse recent history, during which most of the net new jobs in America were created by small businesses.

If we truly want to provide coverage for all while protecting our economy, the real focus should be on small business' biggest concern - the cost of health insurance. Reduce costs, and we can increase coverage.

To do that, we should increase competition by breaking down the barriers that exist to selling insurance to small businesses across state lines. In addition, we need to make health insurance portable from job to job, which also would encourage more would-be entrepreneurs.

By shifting the burden for providing health insurance completely to businesses or the government, there's no incentive for any of us to take control of our health. Aren't those decisions we should make for ourselves?

Todd Stottlemyer is president of the National Federation of Independent Business.