And their employees get nothing.
Opponents of healthcare reform, coincidentally those with health insurance, often cite its impact on small business. In particular, healthcare reform opponents cite the provision that small businesses, all businesses, be mandated to provide health insurance for their employees. They costs will be draconian, it's claimed.
Putting aside the inconsistent logic that investing in the health, care and maintenance, of your number one asset is unproductive...let’s look at the current draconian taxes already forced on small business by our current healthcare system.
Bankruptcy costs. 50% of personal bankruptcies are caused by catastrophic healthcare costs. Catastrophic means...their recipient cannot afford them. Their catastrophe arrives from many sources:
1. No health insurance
2. Inadequate health insurance
3. Rejected health insurance claims
4. Delayed healthcare. Like delayed justice, delayed healthcare is no healthcare. A chronic health issue ignored over time becomes a catastrophic healthcare cost. No one chooses to ignore their healthcare. We ignore our healthcare because we cannot afford to pay attention to our healthcare or that of our children.
This number, 50%, only continues to rise as the costs of healthcare grows faster than wages and inflation.
Why does this matter? Debt waived in a personal bankruptcy only disappears from the balance sheet of the bankrupt. It’s passed on to their creditors, who then pass it on to their consumers in the form of higher costs. So, first the bankruptcy debt is absorbed by the business. Then business, in turn, passes on those costs to we, the consumer, in the form of higher prices.
How much is all of this? Let’s look at the math:
* Average amount of debt by those filing for personal bankruptcy was 1.5 times their annual income in 1997. Bankrupcty Action
* Average personal income in 2006 was $36,000. Link
* Number of filings in 2009. 1.251 million non-business bankruptcies were recorded in 2009 (june 2008 to june 2009) US Administrative Court Filings
* Total Cost of Bankruptcies Caused from Catastrophic Healthcare Costs? $33,777,000,000.
(1.5 x 36,000 x 1.251 million = (drum roll, please) $67,554,000,000 and then 50% of this = $33,777,000,000.)
For $33,777,000,000, small business and its employees receive:
* No health insurance, no or inadequate healthcare for its employees.
Job-lock Job-lock is the term used to describe employees locked in their current job. They are locked in their current job for the healthcare benefits the bigger company offers and the small business cannot afford to offer.
What’s this cost to a small business? Quantifying this cost to small business and our economy is difficult. But, did you notice the news that this economic recovery is a job-less recovery. And did you notice that small business remains the top source for layoffs?
Without the talent needed to provide leadership, ideas, skills and strengths, to find solutions, to attract more talent of the same caliber increases the likelihood that both scenarios remain. Why? Small business is unable to provide the healthcare benefit needed to lure the talent necessary to drive their business and create jobs.
Lost productivity. This will come in several forms:
- More sick days
- More employees sick
- More time off to take care of families
- More distractions in the workforce. As more of your employees must spend their resources to deal with the lack of affordable healthcare...you lose their productivity from their lack of focus, from their time spent on the phone with family members and doctors, etc.
Lost employees. See job-lock. This is the flip-side. Your talented employees will leave to find the healthcare benefits you cannot afford.
Like most of our healthcare system, the true costs are hidden or disconnected from their impact, their provider and the recipient.
Small business is already taxed with the costs of providing for our current healthcare system. The difference is there are no benefits received by small business and its employees for these taxes, these costs.
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