Newspaper article The Christian Science Monitor

Small Businesses Worry That Costs of Health Plan Will Strain Capacity Lobbyists Say the Clinton Proposal Mandating That Employers Provide Health Insurance to All Employees Could Jeopardize Millions of Jobs

Newspaper article The Christian Science Monitor

Small Businesses Worry That Costs of Health Plan Will Strain Capacity Lobbyists Say the Clinton Proposal Mandating That Employers Provide Health Insurance to All Employees Could Jeopardize Millions of Jobs

Article excerpt

CIVIL engineer and 12-year construction veteran Jeanne Morrissey has undertaken a challenging venture. She is starting a business, confident that her skills as a problem-solver can overcome the recession's economic uncertainties.

Her biggest problem is shared by almost all start-up firms - guaranteeing sufficient working capital to tide her through the first few years. Thus, she is "somewhat mixed" on the president's proposal to mandate that all employers provide health insurance.

"Health insurance creates additional overhead expenses that puts an additional strain on start-up companies," the Burlington, Vt., native says. "Lack of capital is the No. 1 reason new companies fail."

At the National Governors' Association conference in Tulsa, Okla., Tuesday, President Clinton contended that building on the present employer-based system is the only reasonable way to extend coverage to 37 million uninsured Americans and control the system's spiraling costs. He also called for significant reform of the health-insurance industry, subsidies to support small businesses that may have difficulty paying for health insurance, and a period of five to seven years to phase in mandates.

The proposal already has fierce opposition from small businesses, which contend that mandating that firms provide health insurance will put millions of jobs at risk. More than 60 percent of the uninsured work, many at low-wage jobs in businesses with slim profit margins.

Small-business lobbyists contend that mandating that such companies provide insurance could force some out of business. A study for the National Federation of Independent Businesses (NFIB), which represents 600,000 small businesses, estimates that as many as 18 million jobs could be lost, depending on the type of mandate enacted.

"The cost of health insurance is the No. 1 problem for small businesses," says Michael Roush, NFIB's chief Senate lobbyist. "They want the system changed. The status quo is not acceptable, but mandates are off the table. It's very intensely felt. They'll take almost anything other than mandates."

Mr. Roush says the small-business community's pragmatic economic concerns are bolstered by a more fundamental problem: The community does not believe it is their responsibility to provide health insurance, and they resent being told what to do.

Advocates of employer mandates contend that the community's resentments and fears are unfounded, and they point to Hawaii, which implemented mandates more than 20 years ago. The White House notes that job growth in that state continues to be strong, with new business start-ups outpacing the rest of the country. More important, health-care costs have grown at a slower rate in Hawaii compared with the national average.

Lobbyists for larger companies that provide health insurance are also inclined to favor mandates as a way to stop cost-shifting. …

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