Would Universal Healthcare Promote Business Growth?

How should the government help businesses struggling to pay for health insurance?


We know that many small-business owners struggle with rising healthcare costs. One way to relieve this burden is to shift the responsibility of health insurance away from employers to another party—such as the government. Jeff Cornwall makes the point, however, that such a move would create new costs for businesses:

...there is no such thing as free healthcare. Socialized healthcare is going to cost money. We will need to raise this money as a country through either increasing taxes or borrowing more money. If we increase taxes that will decrease your income as an entrepreneur. If we run up the federal deficit even further to pay for healthcare, we will at some point very soon stoke the flames of inflation. That will squeeze your operating profits as a small business owner. Entrepreneurs get hit hardest during inflation due to their lack of market power -- their costs go up faster than they can increase prices.

But I should say, this is not necessarily a defense of employer-based health insurance. Costs of healthcare and the pressure for employers to pay for them has a serious negative impact on the creation of new businesses in the US (see evidence here.) But we should find a way to relieve this burden without creating new ones like more inflation (see above) or higher taxes.