With its potential negative impact on small business, the sporting goods industry seems deeply troubled about the nation’s healthcare insurance overhaul. While more than a few hold out hope that the bill is a first step toward clamping down on the escalating rise in medical costs, many appear worried about the mandated insurance costs, taxes, hiring disincentives, and consumer spending pressures resulting from the bill.
That was the finding of a recent SGB Question e-mail blast to SportsOneSource subscribers asking, “How do you see the new healthcare bill passed by Congress affecting your business?” The wide range of answers underscored how divisive the issue is playing out across the country.
At one extreme, some said the bill constitutes the ongoing push by the Obama administration toward socialism and fretted about any further government growth. “In the end, it will break the economy down further,” said Jim Fox, owner and operator, Fox Grocery & Firearms, in Cloverdale, OR. “USPS is broke; Social Security is broke; Medicaid is broke; Medicare – broke. Everything the government touches is not run efficiently and goes broke.”
On the other end, some felt it did not go far enough. Said Lynn Mayhew, president, Chimera Concepts, “It is a start. However without a public option or tort reform, the real winner is the health insurance industry as they will have 30+ million new customers.”
Indeed, many were particularly concerned about the bill’s impact on the economy as businesses absorb the cost of supporting the many newly insured Americans.
“This will bankrupt our country and ruin the best healthcare system in the world,” said one anonymous respondent, who is a team dealer. “The economy will never recover from this. A lot of independents wont survive.”
Added Brian Dani, owner of CBS Boardshop Lake Forest, CA, “This is a job killer, and anti business that will affect all retail negatively.”
But others are hoping that the bill eventually leads to more affordable healthcare options.
Denise M. DAmour, president of Capitol Hill Bikes in Washington, D.C., said she had made the decision to discontinue her store’s health insurance policy for its small staff. But she is hopeful that the new bill will help her find insurance at reduced rates by purchasing through a broader pool.
“It’s a great help to my small business” said DAmour.
Said Ted Lohr, a sales rep for Centripetal Sports, “I look forward to being able to purchase a more competitive policy for myself and my family. As an independent I get hosed since Im not part of a bigger risk pool.”
Moreover, some believe the U.S. has to do something to cap medical expenses.
Alex Frank, president of the consulting firm Francorp, noted that the U.S. spends 17% of GDP on healthcare, well above other nations. “The healthcare bill may not be a panacea – it’s virtually modeled point-by-point on what Nixon advocated in 1974 – but it’s a step in a direction that we should have taken long ago,” said Frank.
“Why does the USA economy spend 50-100% more than our OECD competitor countries PER CAPITA and still rank 27th in health outcomes?,” asked Ron Sutton, president at Accusplit, the pedometer and stopwatch manufacturer. “There must be some real answers that are not made up fear-mongering.”
Said one store owner ruefully, “The health care situation in this country could not be worse. The new bill will either help us or not affect us. It certainly will not hurt us.”
Still, some dont see any impact on their business.
“I already feel that it is my responsibility to provide assistance with healthcare to my employees,” said Steven Bobenhouse, president at Fitness Sports, a running/triathlon store in Windsor Heights, IA. “That may be part of the reason that I have long-term employees.”
Keith Baker, co-owner of The Trailhead in Buena Vista, CO, likewise said his store already provides coverage.
“Well be happy to get a tax benefit for what’s simply the right thing to do,” says Baker. “Perhaps now some big boxes who pay their staff or schedule them so little that they qualify for public assistance programs (i.e., public assistance is their “benefits package”) will do the right thing, too.”
Some small businesses said they were already pondering layoffs.
An owner of a sports equipment start-up said, “I will most likely reduce my staff in order to prevent having to pay fines and penalties; either that or close the doors.”
Billy Hughes, CEO of Accelerated Sales & Marketing, said, “Demand of providing coverage, cost of coverage, tax implications, etc. I think this will add 15% to the cost of employment. Once determined, we will make adjustments to reflect the change.”
Jennifer Curley, president at Inverness Ski Shop in Waitsfield , VT, said the bill doesnt appear to cover part-time employees and she suspects many companies will move to shift their full-time employees to part time. Also, with mandates of businesses with 50 or more employees to provide coverage, she believes many companies around that size will reduce their employee count.
“Where does the money come from to pay for health insurance for ALL of these people?,” said Curley. “And, if it is mandated on the part time employee, are we going to become a nation of independent contractors? I would like the IRS to figure out that one.”
Another owner of a sporting goods store said the uncertainty about the bill’s ramifications is already hurting his revenues.
“My vendors have been conservative in their stock levels and any new products being produced. My customers are much more judicious in their spending and some have stopped repeat orders this year and last year,” said the owner. “In lieu of the “tax system” affects, I wont hire additional outside sales because I dont know what the impact will be in paperwork bureaucracy, much less the financial impact of the health insurance changes.”
Bill Sells, VP, Government Relations for the SGMA trade group, said the healthcare bill failed to address one of the biggest contributors to health care costs in America: sedentary lifestyles.
“Active people have fewer major health issues and a lower incidence of chronic illness, yet the bill does nothing to promote active lifestyles,” said Sells. “If we are serious about resolving our health care problem, we need to make prevention of illness a priority.”
William Nuttall, president of Diadora America, believes it’s too soon to understand the impact the bill will have on small businesses. “I believe it will take months to get a handle on the true impact to small businesses and I am cautiously optimistic that the new bill will not cripple the small business operator,” said Nuttall.
>>> Readers certainly werent shy when it came to this question. Responses came fast and furious once the SGB Question hit the wires. In the end, how people feel about this bill will be based on the type and size of their business or the company they work for, and to some extent, politics. If companies that spend more than 8% on healthcare opt for the fine and jettison employees into the pool then there will be concerns for staff retention. If a small company with fewer than 25 employees already provides health insurance and is eligible for a tax break, then this will add a nice benefit to the owner. However, the bottom line will be of even more importance when it comes to expansion…
Note: Look for more responses to the SGB Question or offer your own response at: www.SGBQuestion.com.