Healthcare Crisis Cuts Cross Party Lines for Small Businesses

By Jeremy Herb
and Gregory M. White

Slideshow by Jeremy Herb

With the presidential campaign in its final days, small business owners and workers hit by the financial crisis are worrying about the cost of health care.

For Lower East Side bartender Malati Malay, a lack of health care coverage meant $2,000 in bills after two emergency room visits this year. Malay’s friends have suggested she give a fake name when visiting the hospital to avoid charges, she said.

“I need to get it, but I don’t know the best one to get, or what I can afford,” said Malay, an Australian with American citizenship. “I don’t understand how this country is meant to be the leader — you can’t even see a doctor.”

For New Yorkers who work for or own small businesses, presidential candidates John McCain and Barack Obama offer different directions on health care reform. Sen. Obama says he will cut taxes for small businesses to encourage them to pursue health care coverage for their workers, while Sen. McCain says he will provide every American with a $5,000  health insurance tax credit so individuals can choose their plans, according to campaign Web sites.

The Tax Policy Institute, a division of the Brookings Institution, said Obama’s plan would reduce the uninsured by 18 million by 2009, costing taxpayers $1.6 trillion over 10 years. The same review shows McCain’s plan reducing the uninsured by 1 million by 2009 at a cost of $1.3 trillion over 10 years.  According to U.S. Census Department figures nearly 47 million people are uninsured.

David Trueman, a lecturer in law at Columbia University,  and who practices law in Manhattan, said Obama’s plan has been mischaracterized in the campaign.

“It is not a nationalized health care. It is not a government health care,” he said. “Obama wants to have a pay or play mechanism for companies.”  (Under such a system companies would  pay for employees’  health insurance or pay taxes to the  government to support their worker’s health care.)

The Obama plan will also create a National Health Insurance Exchange to help individuals pursue coverage at reduced costs.

Trueman, also a psychologist, said McCain’s plan is much more radical, because the reduced burden on business would not have a positive impact on workers.

“It would work to disincentive businesses from providing health care benefits,” he said. “If individuals are simply going to apply for coverage…and there is no pooling of risks, I don’t see how this is going to reduce costs.”

Chris Remy, the co-owner of Cobble Hill gourmet cheese shop Stinky Bklyn, provides health insurance for his four employees, even though it cuts into profits.

“I do like Obama’s credit for small businesses that do health insurances,” said Remy, an Obama supporter. “In the long run that could encourage other small businesses to get in on the whole thing.”

For many small business owners, the weight of health care costs plays a primary role in voting decisions. Eighty percent of small business owners feel the issue is important to them, and 31 percent say it is the most important, according to the National Federation of Independent Business.

Rena Anastasi, owner of the Lower East Side’s Arena Salon, said she bought insurance for herself six years ago after living in this country since 1987.

“Since I got the shop six years ago, I realized I had to look into it,” she said.

Anastasi, who has an Obama sign in her shop’s window, felt it was impossible under any plan for her business to be able to afford insurance for its workers.

“We just don’t make the money to be able to,” she said, adding that the salon industry typically doesn’t provide health insurance. “I don’t feel it’s my job.”

Trueman feels a key to the Obama plan is how the Congress defines a small business. If small businesses are defined as two workers or more, it may put too heavy a financial weight on the tiniest operations. Trueman, however, doubts this will be the case.

“I think the plan will be responsive to the needs of small business,” he said.

Peter Morgano, who works at Boerum Hill Food Company, is currently insured under the state’s child Medicaid plan with his 2-year-old daughter. But he’s worried that insurance will soon expire, and  Morgano and his wife then plan to pay for their child’s insurance but go uninsured themselves.

Morgano, originally a Hillary Clinton supporter, who now a supports  Obama, doesn’t receive insurance from the Boerum Hill café and can’t afford a family plan.

“John McCain talks about $5,000. When family group coverage is $1,100 to $1,200 a month, $5,000 doesn’t get you very far,” he said. “Having your employer provide insurance is much more favorable to us people that work a day job. I work 50 hours a week and have no insurance,” he said.

Trueman said the health insurance burden will be difficult on small businesses in the current economic climate. But McCain’s plan could lead to increased demand and increased prices for consumers, Trueman said.

“McCain’s plan would look to do away with the employee-based system,” he said.

Malay, who hasn’t figured out how to pay her $2,000 bill, said business should help their employees.

“I don’t think they should have to pay all of it,” said the Lower East Side bartender, “but a least a little bit.”