CBS Sees 'Bitter Medicine' in Employer Mandates to Buy Health Insurance

On Thursday’s CBS Evening News, correspondent John Blackstone gave attention to the danger for small businesses if the final version of health care reform requires employers to provide health insurance for their employees as he highlighted two business owners – one who fears health care reform could close down his night club business while the other is more optimistic about how her business would be affected. Substitute anchor Jeff Glor set up the report: "As we mentioned earlier, the health care bill passed by the Senate today would extend coverage to 30 million Americans. A key element is a mandate forcing many companies to pay for their workers' insurance or pay a fine – a very difficult choice for struggling small business owners."

Blackstone related that "the prescription for change includes some bitter medicine, mandates requiring companies to pay for health insurance or pay a fine." While Blackstone at one point argued that small business owners are likely to benefit "from insurance exchanges in the reform plans which should hold down premiums in many cases by helping small businesses join together for greater buying power," the CBS correspondent also gave substantial attention to nightclub owner Jay Siegan’s fears that " the music will go silent if he's required to provide insurance."

And even while kennel owner Virginia Donohue voiced support for health care reform, as she claimed health insurance is a "basic human right," Blackstone also informed viewers that Donohue, who already pays for health insurance for her employees, "admits she can barely afford it." On the down side, a clip of Donohue was shown complaining about large increases in her health insurance premiums, but Blackstone did not take the opportunity to pass on the argument that government regulations contribute to high health insurance.

Below is a complete transcript of the story from the Thursday, December 24, CBS Evening News:

JEFF GLOR: As we mentioned earlier, the health care bill passed by the Senate today would extend coverage to 30 million Americans. A key element is a mandate forcing many companies to pay for their workers' insurance or pay a fine – a very difficult choice for struggling small business owners. More now from John Blackstone in tonight’s "Eye on Health Care."

JAY SIEGAN, BUSINESS OWNER: I'm Jay Siegan. I own the Red Devil Lounge in San Francisco.

VIRGINIA DONOHUE, BUSINESS OWNER: I'm Virginia Donohue. I own Pet Camp in San Francisco.

JOHN BLACKSTONE: Two owners of small businesses whose concerns about health care reform are as different as their companies. Virginia Donohue owns a boarding kennel for dogs and cats. Her 20 employees all get health insurance.

DONOHUE: We think health insurance is a basic human right, and in this country, you get it through your employer.

BLACKSTONE: At Jay Siegan's nightclub with 15 employees, nobody gets health insurance.

SIEGAN: We want to take care of our employees, of course.

BLACKSTONE: But right now you can't afford to pay.

SIEGAN: Right now I cannot afford to put all our employees on health care. I cannot afford it.

BLACKSTONE: Donohue admits she can barely afford it. Since 2000 the cost of covering her workers has tripled from $30,000 to $90,000 a year while benefits have been cut back. This year alone, premiums rose 30 percent.

DONOHUE: Everybody's revenues are down. You don't see anybody getting raises. There is no cost of living increase. What justifies 30 percent?

BLACKSTONE: The prescription for change includes some bitter medicine, mandates requiring companies to pay for health insurance or pay a fine. After an outcry, the House bill exempted companies with payrolls under $500,000. The Senate bill exempts those with fewer than 50 employees. Jay Siegan is grateful he's unlikely to fall under the mandate

SIEGAN: We’ 're just hanging on. We need breaks.

BLACKSTONE: But given her payroll size, Donohue's business could come under the mandate. Since she's already providing health coverage, she's looking at the upside.

DONOHUE: There's a tax credit for companies, and I’d love that.

BLACKSTONE: For Donohue, the credit could save $7,000 to $10,000 in the first year under the House bill, but less under the Senate version. Both Donohue and Siegan could benefit from insurance exchanges in the reform plans which should hold down premiums in many cases by helping small businesses join together for greater buying power. Now, small firms pay an average 18 percent more for health insurance than big ones without a significant cost break. Jay Siegan says the music will go silent if he's required to provide insurance.

SIEGAN: I’d want to see it happen one way or the other. I just need to see it happen in a way that doesn't shut down a bunch of businesses in the meantime.

BLACKSTONE: Virginia Donohue says almost anything is better than what we have.

SIEGAN: It's not working. The system is completely broken.

BLACKSTONE: Two owners looking for reforms that help their workers stay healthy while helping their businesses survive. John Blackstone, CBS News, San Francisco.