Ever since the federal health care reform bill was signed into law, I’ve heard no small amount of fear and dismay from business owners who worry that the cost of new mandates will force them out of business.
But a new report, issued this month by the Center for Rural Affairs in Lyons, Neb., suggests they don’t need to worry quite so much. In fact, Jon Bailey, the author of the report, says health care reform will benefit rural businesses in the long run by knocking down some of the barriers they’ve faced in obtaining affordable health insurance. Bailey writes:
While exempt from mandates requiring insurance coverage for employees, the tax credits provided by the law will make health insurance more affordable for businesses and provide an incentive to help insure employees. Over time as the primary features of the law are implemented and take effect, particularly the Health Insurance Exchanges, rural small employers will reap the benefits of pooling and larger group coverage that provides comprehensive, affordable, and continuous health care coverage for their businesses and their employees.
In the reams of stuff that has been written analyzing the health care reform bill, I’m not sure due attention has always been paid to its impact on rural America. Nor am I sure that people really have all the facts. It’s not surprising that most of us are still trying to figure out what’s in the bill; after all, it contains hundreds of pages filled with densely technical language and details. Just the same, there’s considerable misinformation floating around. Last week, for instance, I was following an online discussion during which someone lamented the fact that the bill failed to eliminate lifetime spending caps for insurance enrollees – a claim that simply isn’t true.
So it was interesting to read the paper issued by the Center for Rural Affairs, which is going to be the first in a series of papers examining the implications of the health care reform bill for rural communities.
One of the first myths Bailey debunks is the one concerning the insurance mandate. Bailey explains:
There is a general employer mandate in The Patient and Affordable Care Act as a part of the "shared responsibility" for providing health insurance. But the law specifically exempts from this employer responsibility any business with 50 or fewer employees (Section 1513). The result is that nearly all businesses in the nation, including those in rural areas, are exempt from any requirements or mandates to provide health insurance to employees and are free from any penalties for not doing so.
What about affordability? The law provides for a small-business tax credit to help small employers purchase affordable insurance. Bailey calculates that as many as 3.6 million small businesses will be eligible for this tax credit. Small businesses also will be allowed to join health insurance exchanges. Groups of small businesses can even form health insurance cooperatives if they choose.
Bailey also addresses one of the most persistent fears: that the health care reform bill will increase business taxes. It’s true that the bill creates some new taxes and increases other existing taxes, he wrote:
But the real question is who is responsible for those taxes. While each individual and business has unique circumstances that will determine tax liability, it is clear that most rural small businesses will not be affected by the tax changes contained in the Patient and Affordable Care Act.
Rural Americans have always been more likely than their urban and suburban counterparts to be uninsured or underinsured. (If you want to see a visual county-by-county breakdown, check out this map compiled by the U.S. Census Bureau.) In a rural economy dominated by farms and small businesses, the availability and affordability of health insurance has frankly been an issue. It’s not totally unreasonable to assume that entrepreneurship and workforce recruitment have been at least partially held back by concerns over health insurance.
Bailey’s analysis suggests that if some of the insurance barriers can be eased or removed, rural economies will eventually see some benefit. How this will play out is, of course, anyone’s guess. It’s worth keeping in mind, however, that health insurance isn’t just about keeping people healthy; it’s also about Main Street business. How do you weigh the cost to the economy of doing something about health insurance vs. the cost of doing nothing?
West Central Tribune photo by Carolyn Lange