Obama’s Proposed Health Care Reform: Friend or Foe?

Dale Hammer — Mon, 27 Jul 2009 18:09:47 +0000

President Obama’s healthcare reform has been the topic of heavy debate in recent weeks, especially among small businesses who have both a lot to gain and a lot to lose from such a reform. Of the 39 million Americans who do not have healthcare, an estimated one-third are employed by small businesses. The most recent Congressional proposal would mandate that any company with over $400,000 in payroll costs per year to offer employees healthcare or surrender a penalty totaling 8% of total annual payroll. Such a reform would exempt small businesses with payroll costs under $250,000, but would employ reduced penalties for those small businesses with payroll costs between $250,000 and $400,000.

The President’s Council of Economic Advisors reports that these health care reforms will benefit small businesses both by lowering their health care costs and by increasing coverage options for small business employees. A study by economist Jonathan Gruber of M.I.T. concluded that health care reform would benefit small businesses by streamlining the purchase of insurance and by lowering administrative expenses associated with insurance policies. Gruber’s statistical analysis concluded that health care reform would save small businesses between $546 and $855 billion over the next decade.

So, health care reform is a friend of small business, right? Unfortunately, the answer is a beautiful shade of gray. Analysts agree that in the short term, the proposed reform will actually cost small businesses $6.5 billion in profits this year alone. As a result of reform, small business profits in the US would not increase until 2013. Amidst an economic recession where many small businesses fail to make any profits, a final decision on a healthcare reform with a component aimed at small businesses will be difficult to make.

To read the full CNN story, click here.

To read more about Gruber?s analysis, click here
To read more small business opinions on the proposed health care reform, click here.

White House Announces New Aid Package for Small Businesses

Carmody Chris — Sun, 15 Mar 2009 14:58:20 +0000

”It’s a huge step in the right direction,” Giovanni Coratolo, director of Small Business Policy at the U.S. Chamber of Commerce, said Saturday. ”In this economy, having the least amount of risk for banks will incentivize banks to lend to small businesses. A lot of small businesses will benefit from this.” The White House announced a series of moves to great credit flowing to small businesses, as new direction on small business tax breaks:

Losses over five years can be claimed in 2009.
Write-offs of investments up to $250,000 can be claimed this year.
Reduction of estimated tax to 90 percent of the previous year’s filing.
Depreciation deductions for property purchases will be larger.
Capital gains, 75 percent exclusion for businesses investments.

Click here for full coverage in the New York Times.

-Chris Carmody

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Obama’s Proposed Health Care Reform: Friend or Foe?

White House Announces New Aid Package for Small Businesses