Pet Retailers Are Torn on Health Care Reform
Mandates requiring employers to “pay or play” are among the most controversial provisions in health-care proposals working their way through Congress—and pet retailers seem almost evenly divided on the issue, based on the results of a PET AGE poll taken in mid September.
More than half (52.6 percent) gave a qualified thumbs up, while 47.4 percent turned thumbs down.
Health-care bills pending in the House and Senate would require businesses of a certain size to offer coverage or pay a penalty. The exemptions and penalties differ from bill to bill, and at press time were a moving target. The proposals also would provide tax credits to help small businesses obtain coverage.
Employer mandates have drawn stiff opposition from associations like the National Federation of Independent Business (Nashville, Tenn.) and the National Retail Federation (Washington), which this summer lambasted Wal-Mart (Bentonville, Ark.) for supporting such mandates.
According to those groups, the directives will increase the cost of doing business, destroy jobs and drive up health-care costs.
But at least some pet retailers seem prepared to go along. Randy Knapp, who has owned Colonial Pet Shoppe in Manitowoc, Wis., for more than 30 years, provided insurance—and paid half the premiums—for four of his employees up until last year, when all of them got married and obtained insurance through their spouses. But he bumped up their salary when they gave up their insurance, he added.
Knapp concedes that the “cost was getting so far out of hand that I was glad they did get it elsewhere.” Yet, he says, “I believe that everyone should have health insurance. It was one of my major expenses, but I wouldn’t mind if I had to pay it if I had to.”
Natalie Bradshaw, who has owned Vineyard Dog in Napa, Calif., since July 2008, said she might be in favor of employer mandates, depending on who they cover. Bradshaw, who pays more than $800 a month for her own single- coverage insurance, doesn’t yet have employees, but she’s resigned to providing insurance in the future if necessary.
“If I had to do it, then I would have to do it. I’m not one to try to get around the system,” Bradshaw said. “It would have to come out of the pay structure that I offer, or I would have to raise prices. It’s got to come from somewhere. I would have to figure out a way to build it in.”
A manager of a southern California PetSmart, who asked not to be identified, said every employer should supply insurance. PetSmart offers insurance, he said, but he can’t afford it so he is on his wife’s plan instead. He’s in favor of reform, including mandates for individuals to purchase insurance, as long as it doesn’t raise rates. “They should not force it upon you unless it’s affordable.”
Ellis London, president of Tropic Aisle Aquarium in Framington, Mass., paid the full cost of health insurance for his employees when he went into business 46 years ago. Over time, with rising premiums, he cut back to paying half the cost. Today, he pays only a third of the premiums. “If I had to pay the entire cost now, it would simply put me out of business,” he said.
He offers insurance to everybody (13 to 14 full- and part-time employees). However, because he can only pay a third of the cost, most of them cannot afford it. Instead, he said, “They pick up lousy insurance from the state, then when they have a medical problem, they’re never covered. It hasn’t worked at all.”
(Massachusetts’ health-care reform law, enacted in 2006, requires nearly every resident to obtain coverage and imposes tax penalties for failing to obtain an insurance plan. It provides subsidized or partially subsidized care for residents who earn up to 300 percent of the federal poverty level, depending on income, through private insurers.)
Setting up a system that gives the general population the same choices members of the House and Senate have is logical, said London. “If we don’t have a single-payer system, that’s the next best alternative. Without giving the public a similar plan as what Congress members enjoy, the result could very well be as useless as what we have in Massachusetts now.”
Like Bradshaw, London blames “greedy” doctors as well as insurance companies for the high cost of medical care. “The cost of health insurance has gotten atrocious because insurance companies think they have to make 25 percent profit,” he said. “I’d be thrilled to make that kind of profit.”
—Cathy Foster [November 2009 PET AGE]
Pay or Play
More than half of pet retailers support employer mandates under certain conditions, according to the 38 PET AGE subscribers who participated in a poll posted on PetAge.com Sept. 16-23, 2009.
Do you favor health-care reform proposals requiring all except the smallest businesses to provide insurance coverage or pay a penalty?
Yes, depending on the specific exemption/penalty - 10.5%
Yes, if tax credits are given to help small businesses obtain coverage - 42.1%
No, “pay or play” is punitive and burdensome to small businesses - 47.4%
[November 2009 PET AGE]
Mandates Don’t Cost Jobs
A play-or-pay mandate requiring employers in San Francisco to provide health coverage hasn’t led to significant job losses, according to a recent National Public Radio story.
That makes sense, according to the nonpartisan Congressional Budget Office. Although employer mandates ostensibly make the business pay health-care costs directly, it is the workers who actually bear those costs: Employers who offer to pay for health insurance pay less in wages and other forms of compensation than they otherwise would, keeping total compensation about the same.
“Because employees largely bear the cost of health insurance or play-or-pay fees in the form of lower wages,” concludes the CBO, “the effects of those provisions on employment and hours worked is likely to be relatively minor.”
A mandate would likely have the biggest employment effect on small businesses, because they tend to pay lower wages. Wages that are close to the minimum wage “could not fall by the full cost of health insurance or a substantial play-or-pay fee,” according to the CBO.
But the agency likens pay-or-play to raising the minimum wage, and studies have repeatedly shown that raising the minimum wage only slightly reduces low-wage hiring.
—Cathy Foster [November 2009 PET AGE]
Health-Care Reform Resources
Business groups:
- National Federation of Independent Business (www.nfib.com).
- National Retail Federation (www.nrf.com).
- National Small Business Association (www.nsba.biz).
- Small Business Majority (www.smallbusinessmajority.org).
Nonprofit private foundations focusing on health policy:
- Heritage Foundation (www.heritage.org).
- Kaiser Family Foundation (www.kff.org).
- Robert Wood Johnson Foundation (www.rwjf.org).
[November 2009 PET AGE]
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