September 17, 2014

Which Small Business Owners Want Repeal of Obamacare?

The majority of small business owners favor repeal of the Patient Protection and Affordable Care Act (Obamacare), a point I have made elsewhere. But some want the law rescinded more than others. While the different points of view stem in part from small business owners’ varied political beliefs, demographics appear to be at play as well.

The January 2011 Discover Small Business Watch – which queries business owners with between one and five employees every month – provides insight into small business owners differing views on Obamacare, at least for the micro businesses that account for two-thirds of employers in this country.

Larger micro businesses are more likely to want to rescind of the new health care law. The Discover Card survey reveals that 62 percent of owners with three-to-five employees but only 49 percent of those with one employee want to get rid of the new law.

Which Small Business Owners Want Repeal of Obamacare?

The larger business owners’ greater desire for repeal of the new health care law may stem from their more negative experiences with employee health insurance. The owners of the larger companies are more likely to offer employee health insurance, with 20 percent of those with three-to-five employees doing so, as compared to only 3 percent of those with a single employee. Moreover, the owners of the businesses with three-to-five workers were more likely than those with one employee to have discontinued employee health insurance because the cost was too high (53 percent to 32 percent) and to think that finding affordable insurance is difficult (85 percent to 60 percent).

Male micro business owners are more likely to favor repeal of Obamacare. The Discover Card survey shows that 62 percent of male owners and 47 percent of female owners want to get rid of the new law. This gender difference may result from the male owner’s more negative experience with employee health insurance. Men-owned businesses are twice as likely as women-owned businesses to offer employee health insurance (13 percent to 6 percent). And 75 percent of the male owners surveyed said that it is difficult to find affordable health insurance for themselves and their workers, as compared to 63 percent of the female owners.

More successful micro business owners are more likely to want to get rid of the new health care law. The Discover Card survey reveals that 64 percent of owners making $100,000 plus annually want to get rid of the new health care law versus 54 percent of those making under $20,000.

The source of the greater interest in the law’s repeal among higher income business owners is not entirely clear. The more successful owners have more experience dealing with employee health insurance. The Discover Card survey shows that 19 percent of owners in the top income category offer insurance to their employees versus 7 percent of those in the bottom earnings rung. However, the less successful owners had more troubling maintaining employee health insurance, with the survey showing that 83 percent of those making under $20,000 annually discontinuing employee health insurance versus only 24 percent of the owners making in excess of $100,000 per year.

Nevertheless, the higher income owners had more negative views of the new law. The Discover Card survey revealed that 80 percent of the higher income owners viewed the new health care plan as harmful to their business versus 70 percent of lower income owners.

Older micro business owners were less likely than younger ones to favor repeal of Obamacare. The Discover Card survey shows that 55 percent of the 65-plus owners favored rescinding the new law as compared with 65 percent of those aged 19-to-29.

The younger business owners had worse experience finding and maintaining adequate employee health care coverage, which might explain their greater desire for repeal of the new health care law. The Discover Card survey shows that 69 percent of business owners aged 19-29 had to terminate employee health insurance because of cost, as compared to 35 percent of those over 65. And 68 percent of micro business owners between 18 and 29 said it is difficult to find affordable health insurance versus 45 percent of the older group.

Despite the worse experience of younger business owners with employee health insurance, older business owners had a more negative view of Obamacare. Roughly 75 percent of those over 65 reported that the new health care plan would hurt their business as compared to 65 percent of those aged 19 to 29.

In short, the Discover survey shows that the majority of small business owners want to get rid of Obamacare, with 55 percent in favor of repeal and 36 percent opposed. However, not all small business owners share the sentiment equally. More successful, younger, male, micro business owners with more employees are the ones who most want to undo it.

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Scott Shane


Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.

8 Reactions

  1. It would be interesting to look at those numbers in light of expressed political preferences as well: if those people voted, say, 90% republican, and only 55% want to repeal, that would say one thing. If they’re all Democrats and yet half want to repeal, another. Reality is likely somewhere in the middle, but it’d be an interesting number to look at.

    My guess is that part of the problem is the massive amount of paperwork and headache that the US health care system involves, which probably hits small businesses hardest: if you’re a big company, you’ve got “people” to handle that stuff. If you’re on your own, you take care of your own, which is a PITA, but don’t have to deal with the additional hassle of extra people.

    The quality of care I get over here in Italy is pretty good compared to the US, but the thing I like the most is just not having to worry about having health care for me or my family, ever. No time wasted on the phone with bozos, no reams of forms to fill out, just go to the doctor if you’re sick.

  2. I hope that ad-hoc organizations like Americans for Free Choice in Medicine (AFCM.org) and Freedom and Individual Rights in Medicine (WeStandFIRM.org) will be able to spread better ideas and to show small business owners that you could have an antidote to Obamacare and other political programs.

  3. Not touching this one with a bargepole. All I know is that I’m happy the UK has a national health service.

    It means most people in our office are fighting fit, and they don’t need to worry about buying insurance.

  4. At what point did Americans decide that the government should be in charge of their health care? And we’re somehow cool with them delegating that responsibility to employers? What happened to personal responsibility?

  5. Way to fire things up on a Monday! :-)

    I don’t see it standing, we are a nation with a heritage of entrepreneurial individualism…coupled with the concerns many have about the stability of our economy, my bets on it being repealed, as I think it should be.

    -Travis

  6. You are going to pay for it, it just show how stupid everyone is that lets someone else’s pipe dream come to life, and just think nothing of it. Wake up you idiots this is the US government trying to be health care provider, give me a break!

  7. @Travis – if you look at statistics, the US actually lags a lot in terms of small business and entrepreneurship:

    http://economistsview.typepad.com/economistsview/2009/08/an-international-comparison-of-small-business-employment.html

    Well behind many European countries (both “healthy” ones and strong ones).

    In terms of health care and entrepreneurship, I think it’s pretty clear why Europe is an easier place to be: in the US, there are strong incentives to work for large corporations, which get discounts on their insurance, and have people dedicated to sorting out all the hassles. Also, of course, those companies can discount health care from their taxes, and are pretty efficient at doing so.

    Small businesses do not have those advantages.

    Of course, to paint a fair picture, there are many other disadvantages in Europe too, but the health care situation is not one of them.

    I think if people in the US wanted a more truly ‘free market’ system, they would push for the government to stop subsidizing it via corporate tax breaks: let everyone buy their own and let companies compete for individuals, not corporate accounts.

    Of course, one of the tricky things about that, is that one of the best ways to make money with health insurance is to deny people coverage for things like cancer: they cost an awful lot of money compared to nice healthy people who dutifully pay into the system and don’t cost much.

  8. Well, as we come get closer to “exchange day”, I will be curious to see where this bill goes. Even as a broker, I felt major changes were needed. Now it is to be seen as to where this bill goes, with regards to individual and group as this article is written about.

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