Business Wary Of Ambiguous Obama Health Care Plan

Small business owners have expressed concern over a health care plan proposed by US Presidential candidate Barack Obama which has intentionally been left with few details by the campaign.

“We made a decision even before the plan was rolled out not to decide,” said David M. Cutler, a Harvard economist who speaks for the campaign on health care told The New York Times. “It’s not that there’s a decision out there that we’re not telling. It’s literally that we’ve decided not to decide.”

According to the Obama campaign website, the plan would prohibit insurers from rejecting applicants because of medical conditions, require health insurance for children and create a new federal health plan to provide comprehensive coverage to the uninsured. Those beneath certain income levels would be granted tax credits to make premiums affordable, and small businesses would be offered tax credits to provide benefits.

The tax credits are projected to cost at least $110 billion. Obama has said he would pay for it primarily by raising income taxes on those making more than $250,000 and by reducing health spending. But when he announced the plan in May 2007, he emphasized that employers would share in the cost.

“We will ask all but the smallest businesses who don’t make a meaningful contribution today to the health coverage of their employees to do so by supporting this new plan,” Obmama said.

Left undefined has been what size firms would be exempted, what constitutes a “meaningful contribution,” and how much noncompliant businesses would be required to pay.

Economic experts believe the “meaningful contribution” will echo the disastrous 2006 Massachusetts state law requiring employers to contribute to health care benefits for their workers or pay a $295-per-employee penalty. Based on failed attempts at state health care plans in California and Pennsylvania, experts say that Obama will require employees to pay out 6 to 7 percent of their payroll to cover uninsured Americans. Many small businesses, who already have very thin profit margins, have already said they would have to raise prices and put a freeze on new hires. When that failed to keep costs out of control, layoffs would occur.

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