Based on the results of a study, an MIT economist insists that Obama-style healthcare reform would give small and midsize businesses a big boost.
The economist, Jonathan Gruber, did the study for the Small Business Majority, a nonprofit healthcare advocacy group. The study was done against the backdrop of data indicating that small businesses in the United States at one time were major providers of health coverage: 67% offered coverage to employees in 1995, compared to 38% in 2008.
Here are the conclusions of the study — and apparent benefits for small businesses under healthcare reform:
- Reduced costs. Small businesses would pay less to provide health insurance to their employees.
- More jobs. The study concludes that if we stick with the current system, healthcare costs will cause a loss of 178,000 small-business jobs by 2018. Introducing reform would save about 120,000 of those jobs.
- Better wages. The study cites exploding healthcare costs as causing cuts in wages at small businesses. With reform bringing these costs down, more money would be left to pay wages.
- Better profits. Reform would bring down costs, thus increasing profits.
- Better applicants. Workers who feel tied to their jobs because they fear not finding comparable benefits would be freed up to change jobs. Small businesses providing health care would have a greater talent pool from which to choose employees.
The study assumes three components of a reform package, with variations:
- An obligation on some or all employers to contribute to employee coverage.
- Penalty payments for those that don’t.
- Tax credits for those that do.
Here’s the full study.