Small Business and Healthcare Reform: Where Now? Dr. Bob Graboyes

1. Small Business and Healthcare Reform: Where Now? Dr. Bob Graboyes NABE Small Business / Entrepreneurial Roundtable Wednesday, February 24, 2010 Robert F. Graboyes  Senior Healthcare Advisor National Federation of Independent Business (NFIB) NFIB  1201 F Street NW, Suite 200  Washington, DC 20004 202.314.2063  bob.graboyes@nfib.org

2. Status Quo • Small business needs reform • ESI problematic for small business • High costs • Pools are too small • Firms have little market power • No HR departments • Little insurance competition

3. HOUSE BILL Employer mandate for FT/PT employees ≤8% payroll tax for firms w/o insurance plan Paperwork mandate Big benefit package + more mandates Cuts contributions to/use of HSAs, FSAs Public option Surtax Poorly-structured tax credit SENATE BILL Employer mandate Small business health insurance tax Cadillac tax: for some Paperwork mandate: $600  1099 Medicare payroll tax: diversion No free choice vouchers Inadequate small business tax credits Construction massacre

4. Weaknesses of bills • No cost controls • Dubious coverage expansion • Deficit effects • Quality of care • Nothing on malpractice • Complexity: Anyone’s guess • Inequitable deals • National rancor/squandered opportunity

5. Impact on Small Business • Costs keep rising – probably faster • Job killing employer mandates • Heavy administrative burden • Limited choices • Perverse incentives in hiring • Unpredictability • Construction worst of all

6. NFIB @ the Table • Three years negotiating • Bipartisan discussions • Payoff, so far • Due diligence (alerting Congress to small business needs) • Triage (minimizing the damage) • Preparedness (if something passes, or if not)

7. Post-Massachusetts • Reconciliation • Incremental in lieu of comprehensive • Bipartisan • Start over again • Do nothing • Summit: Need answers, not talk • When it’s fixed for small business, it’s fixed for America. Small business still missing. • W-C-B as model