Chattanooga-area businesses divided on health care ruling

Chattanooga-area businesses divided on health care ruling

June 29th, 2012 by Mike Pare and Ellis Smith in Business Around the Region

Aerial photo of BlueCross BlueShield of Tennessee headquarters in Chattanooga.

Photo by Dan Henry /Times Free Press.

Document: Supreme Court Ruling

Text of Supreme Court decision

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Chattanooga-area business leaders Thursday said that not much will change in the short term following the U.S. Supreme Court ruling to uphold most of the Affordable Care Act -- known commonly as "Obamacare."

Few have read the 2,700-page law, but most companies say they'll support any reform that brings down insurance costs, which in recent years have consumed a larger share of their profits.

Debate continues over whether President Barack Obama's signature domestic reform is the right solution to push down those costs.

"I don't know anybody that's read it, and I don't know anybody who's going read it, but it's fundamentally a bad idea," said Henry Luken, the Chattanooga businessman who employs more than 2,000 workers at various enterprises.

Luken said he already provides health insurance for the majority of his employees, but he's afraid the law will increase his regulatory burden and drive other companies out of business.

"I've made a lot of money, I've been very fortunate and I've paid a lot of taxes," Luken said. "Ninety-eight percent of my money is at work employing people -- but when they start beating up on us too hard, what are we doing it for?"

Mary Danielson, corporate communications director for BlueCross BlueShield of Tennessee, said the Chattanooga-based insurer has long advocated for health care reform.

"We recognize people want and need affordable health insurance, and the law helps expand coverage to thousands of our fellow Tennesseans," she wrote in an email.

However, BlueCross will continue to work to change parts of the law, such as the health insurance tax, that will raise premiums for its members and disrupt the market, she said.

"Working with policymakers and other Tennessee health care leaders, we'll also continue to push toward delivery system reforms and solutions that reduce costs and improve quality," she said.

Positive impact?

Elliott Davenport, who co-owns Burger King franchiser Hometown Folks with his cousin, Gordon Davenport, said he has yet to see a positive impact on health insurance costs, which have continued to rise after the passage of Obamacare in 2009.

"We've not seen the price of health care moderate or drop, it just keeps going up," Davenport said.

The higher costs of covering an additional 30 million uninsured Americans will be absorbed by workers and employers who already are paying into the system, which could hurt small businesses, he said.

"I think the more barriers to entry for business really hurts the small-business guys, and I think it will eliminate a lot of them from coming into the market," he said.

Though companies with fewer than 50 employees are technically exempt from many of the law's provisions, Davenport said hiring that 50th employee is going to be a tough decision for smaller companies.

"You don't hire them if you have 49 employees," he said.

Business groups were split between opposing the law, like the National Federation of Independent Business in Tennessee, and those with no opinion on the ruling such as the Chattanooga Area Chamber of Commerce.

Jim Brown, state director of NFIB/Tennessee, said he's disappointed by the court decision.

"Clearly, this mandate has now become a tax on all Americans and a broken campaign promise from President Obama not to raise taxes," he said in a statement.

Brown said small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed companies.

"Only with a full repeal of the law will Congress have the ability to go back to the drawing board to craft real reform that makes reducing costs a number one priority," he said.


J.Ed. Marston, the Chattanooga Chamber's vice president of marketing, said while it now looks like health care reform will go forward, it's urging members to stay tuned.

"We're at the point where it's possible to begin the planning process to understand the ruling," he said, adding the Chamber will offer workshops and other ways to help businesses deal with the changes.

Paul Richard, vice president of human resources for floorcovering company Shaw Industries in Dalton, Ga., said it may be months or years before the impact on any organization can be fully determined. "We would not expect any job loss in the short term, nor any shift from full- to part-time employment," he said. "We are positioning our benefit plans to continue to be as competitive, cost effective and affordable as possible for the company and our associates."

A handful of companies believe the law simply won't affect them.

Tim Kelly, owner of Kelly Auto Group, said his dealerships are "big enough that it's not going to be a big deal at all."

"Life's not really going to change," said Kelly, who supports health reform in theory if it will lower his insurance rates. "I don't know if Obamacare's the answer, but doing nothing is not the answer either."

Joe Johnson, head of ad agency The Johnson Group, said he has always offered generous insurance benefits to employees as a way to attract talent.

"Is it expensive? Yes. Has it become more difficult to offer it every year? Yes. But it would be difficult for me to believe there's something in those 2,700 pages that tells me I have to do more than I'm already doing," Johnson said.