Wednesday, February 6, 2008
Entrepreneurship and Health Care Costs
Filed As: Economic principles, Health Care
Here's yet another sign that our health care financing system needs updating: it's harsh on small businesses and in turn, entrepreneurialism.Very large businesses can self-insure, and under ERISA, they can avoid a lot of government regulation. Small businesses, on the other hand, are subject to all sorts of state regulation in the kind of insurance they can offer employees. It's enough to make some small businesses sell out.
Last month, Sen. Norm Coleman (R-Minn.) held a hearing about health insurance and small businesses. The Saint Paul Legal-Ledger ($ subscription) described the plight of one business manager:
"Mark Carlson, president of Minneapolis-based Minnesota Mailing Solutions, decided he had had enough as a small business trying to handle the health insurance issue. He sold his company to the large mailing company Pitney-Bowes on Dec. 1 in part of because of the costs of providing health insurance to his 17 employees."
"'Part of my reason for selling stems from the health care issue and an inability to keep up. The large corporation brings some relief and longer-term security for the employees,' Carlson told Coleman."
Carlson evidently thought that selling out was in his own interest. But it may not have been in the best interests of other businesses, who now have one less company to choose from. To a small extent, the marketplace for mailing services became less competitive in the Twin Cities.
Is it a coincidence that the countries with single-payer health care also rely much more than the U.S. on large companies for jobs? Or that the U.S., which doesn't have a single-payer system, makes more use of small businesses than other major countries--and has a more dynamic and better economy?
- posted by John LaPlante
- 4:03 am
- 0 comment
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