1. Small Business and Healthcare Reform: Where Now? Dr. Bob Graboyes NABE Small Business / Entrepreneurial Roundtable Wednesday, February 24, 2010 Robert F. Graboyes Senior Healthcare Advisor National Federation of Independent Business (NFIB) NFIB 1201 F Street NW, Suite 200 Washington, DC 20004 202.314.2063 bob.graboyes@nfib.org

2. Status Quo Small business needs reform ESI problematic for small business High costs Pools are too small Firms have little market power No HR departments Little insurance competition

3. HOUSE BILL Employer mandate for FT/PT employees 8% payroll tax for firms w/o insurance plan Paperwork mandate Big benefit package + more mandates Cuts contributions to/use of HSAs, FSAs Public option Surtax Poorly-structured tax credit SENATE BILL Employer mandate Small business health insurance tax Cadillac tax: for some Paperwork mandate: $600 1099 Medicare payroll tax: diversion No free choice vouchers Inadequate small business tax credits Construction massacre

4. Weaknesses of bills No cost controls Dubious coverage expansion Deficit effects Quality of care Nothing on malpractice Complexity: Anyones guess Inequitable deals National rancor/squandered opportunity

5. Impact on Small Business Costs keep rising – probably faster Job killing employer mandates Heavy administrative burden Limited choices Perverse incentives in hiring Unpredictability Construction worst of all

6. NFIB @ the Table Three years negotiating Bipartisan discussions Payoff, so far –Due diligence (alerting Congress to small business needs) –Triage (minimizing the damage) –Preparedness (if something passes, or if not)

7. Post-Massachusetts Reconciliation Incremental in lieu of comprehensive Bipartisan Start over again Do nothing Summit: Need answers, not talk When its fixed for small business, its fixed for America. Small business still missing. W-C-B as model