Although taxes and the economy are gaining the attention of the media in their coverage of the presidential candidates (finally!), one important economic factor is still being neglected – small businesses. Presidential candidates have failed to address – and the media has yet to press the candidates – how their economic plans will impact this part of the economy that accounts for 50% of the private sector workforce and nearly 70% of the gross national product.
If you are a small business owner, you are probably going to want to know how each candidate’s proposals will affect your business. The largest issue that you should probably being paying attention to is the candidate’s view on health insurance. Studies show that health care is the most costly and unstable issue currently facing American’s small business owners. Therefore, it is no surprise that all the presidential hopefuls have now released health care proposals.
Democratic Candidates
Although Sen. Hillary Clinton’s chances of winning the nomination are diminished, she is still a candidate. However, since Clinton’s and Obama’s health care plans are so similar we have lumped them into one category. They both support plans that are based around the idea of a “pay-or-play” program where employers are either required to provide health care, or contribute to the cost of coverage. In addition, both plans offer tax breaks, additional requirements on insurance companies, expanded government-provided health care, and expanded use of technology in the medical industry.
Although there may be dozens of similarities, there are sizeable differences between Clinton’s and Obama’s health care proposals. Clinton’s plan calls for mandated health care, which means the government would essentially require everyone to have health insurance. She has compared her plan to current requirements that all automobile drivers have auto insurance. However, Obama’s plan does not have this requirement. Consequently, approximately 15 million Americans would “fall through the cracks”, as Clinton supporters like to point out. To counter, Obama suggests he will encourage families to obtain coverage but not mandate it. His “encouragement” would be in the form of $2,500 in tax incentives.
Another important factor small business owners should consider are the plans respective exemptions. Clinton’s plan would exempt some small businesses, but no official number has been announced. She would offer tax incentives to encourage those exempt to offer coverage anyway. Obama, on the other hand, states that he would exempt small businesses with fewer than 15 employees.
Republican Candidate
The issue of health care has been much less important to the Republican candidates throughout this election cycle. Although all the Democratic candidates came out with health care plans early in the election cycle, Republican hopefuls took longer. Sen. John McCain did not even release a health care plan until after he was considered to have won the nomination. Even then, the plan he released is light on details and contains mostly small modifications to the current code.
The McCain Plan essentially comes down to giving more responsibility and control to individual patients. It calls for removing current tax breaks given to employers to provide health insurance, and replace it with a $5,000 credit to families to purchase their own health care. He suggests that it would encourage choice and competition in the market, thus lowering current prices. “I’ll work tirelessly to address the problem,” Mr. McCain claimed in a speech at the University of South Florida. “But I won’t create another entitlement program that Washington will let get out of control. I won’t do it. Nor will I saddle states with another unfunded mandate.”
However, Democrats claim that by not compelling insurance companies to cover people who typically experience trouble obtaining coverage on their own is a glaring omission. In an even more competitive market, anyone with current health problems will be deemed high risk and experience unreasonable premiums. This could make coverage impossible for certain lower and middle-income individuals. Democrats point out that these individuals are what is causing the current health care crisis in America and The McCain Plan fails to even acknowledge it. In response to the criticism, McCain claims that it would be up to both the federal and state governments to help those who cannot get insurance on their own.
