1. Key Findings From A Survey Among Small Business Owners in Kansas

2. Slide 2 On behalf of the Robert Wood Johnson Foundation and The Sunflower Foundation, Public Opinion Strategies and Lake Research Partners conducted a statewide telephone survey in Kansas among 200 owners, CEOs, and presidents of businesses with 2-50 employees. This survey was conducted August 22 – September 5, 2008. On behalf of the Robert Wood Johnson Foundation, in May/July 2008, the research team conducted: 10 triad qualitative discussion groups among small business owners with 2-50 employees and a national telephone survey among 400 small business owners, CEOs, and presidents of businesses with 2-50 employees that pay for at least some portion of their employees’ health insurance benefits. This presentation will highlight the key findings from the Kansas survey as well as highlighting some comparisons to the triads and the national survey data.

3. Slide 3 The table below shows the breakdown of businesses with 2-50 employees in Kansas compared to nationally: Small Businesses # Of Businesses National % Of Total National # Of Businesses Kansas % Of Total Kansas 2-50 Employees5,121,02757,381 2-9 Employees3,994,40178%46,76782% 10-24 Employees819,36416%7,51213% 25-50 Employees307,2626%3,1025% The surveys were designed to reflect the proportion of small businesses in Kansas and nationally by company size. We conducted 38 additional interviews in Kansas among companies with 25-50 employees and 295 interviews nationally among companies with 10-50 employees in order to have a statistically significant number of cases to make observations about these audiences.

4. Slide 4 Comparing Kansas to the National Average NationalKansas Gender: Men/Women76%/24%73%/27% Age 18-4418%14% Age 45-5435%31% Age 55-6436%41% Age 65 and over10%14% Member of the Chamber of Commerce and/or the National Federation of Independent Businesses 49%56%

5. Slide 5 Comparing Kansas to the National Average NationalKansas Provides and pays at least some portion of health insurance benefits for coverage of full-time employees 100%*60% Percent of businesses who do not currently offer coverage who did previously N/A31% Percent of health insurance premiums paid for by employees 17%20% Percent of company’s health care costs increase from last year to this year 14%13% Feelings about own business’ financial future: Confident/Not Confident 84%/14%82%/16% *The National Survey was conducted only among small business owners who pay at least some portion of health insurance benefits for coverage of full-time employees.

6. Slide 6 There is a significant difference in whether or not Kansas small business owners offer coverage by company size. Kansas Small Business Owners

8. Slide 8 Small business owners are facing health care costs rising at an unpredictable rate; They are worried about the issue in terms of their families and businesses; They connect offering health care benefits to retaining quality employees particularly among those companies who offer coverage now; and, They see a role for government in addressing the issue but do not like mandates.

9. Slide 9 On an open-ended survey question nationally, the issues facing businesses were very similar across each small business segment surveyed. Health care and energy costs dominate as a primary concern for business owners. Health care costs 78 Fuel/Energy costs 70 Weak economy 55 Cash flow/Sales 28 Higher prices across the board 24 Finding/Retaining good employees 20 Taxes 19 Housing downturn 18 Government regulation 18 Insurance problems/costs 16 Increased cost of raw materials 15 Finding new customers/business 12 Low consumer confidence 11 Higher food prices 7 Competition, particularly foreign competition 6 Government inaction/incompetency 5 Inflation 5 Layoffs 3 Difficulty getting loans 2 What would you say are the one or two most important issues facing your business today? Categories Of Topics MentionedNumber Of Mentions

11. Slide 11 Kansas small business owners who currently offer coverage are less likely than their national counterparts to say they would consider no longer providing or paying at least some portion of health insurance benefits for their employees.

12. Slide 12 28% 35% 12% 66% 65% 63% 88% Core 2-9 Employees 10-24 Employees 25-50 Employees LikelyNot Likely -38%-37%-28%-76% 36% 27% 62% 60% 62% 73% Core2-9 Employees 10-24 Employees 25-50 Employees -26%-24%-26%-46% Likelihood Companies Will No Longer Assist With Health Care Coverage – Among Companies Who Currently Offer Coverage National Kansas

13. Slide 13 Perceived Impact Of Health Care Legislation To Help Small Businesses-Kansas Help Hurt No Impact 34% 42% 38% 33% 13% 14% Among Business Who Currently Offer Coverage Among Businesses Who Currently Do Not Offer Coverage -4%+9% Small business owners in Kansas who do not currently offer coverage are more likely to say it would help their business if health care legislation was passed.

14. Slide 14 1.Creating a small business tax credit 2.Making health care coverage portable 3.Passing medical liability reform 4.Promoting a government sponsored pool for small businesses In Kansas the top supported policy options we tested are:

15. Slide 15 Total Help Total Hurt Net Difference Most Helpful Ideas - Kansas Create a new small business tax credit to make it easier for small businesses to create and offer jobs with health coverage. The government would provide a refundable income tax credit to employers who currently pay at least fifty percent of the cost of group health insurance for their employees. Pass medical liability reform to eliminate lawsuits against doctors who have followed the correct clinical guidelines and have followed the right safety standards in patient care. Make health insurance portable so that individuals and families keep their coverage even when they change jobs or employers. Promote a government-sponsored pool for small businesses that would allow them to purchase insurance at negotiated rates that take advantage of bulk purchasing power.

16. Slide 16 Require by law that all insurers can not deny coverage, including for pre-existing conditions, refuse renewal of coverage, unfairly charge for coverage, or force those they cover to pay excessive premiums for age, illness, or other discriminating factors. Total Help Total Hurt Net Difference Second Tier - Most Helpful Ideas - Kansas Expand and encourage the use of health savings accounts - that is a tax-free medical savings account coupled with a high-deductible health insurance plan. The money consumers put into these Health Savings Accounts would roll over year to year to help build a source of funds that can only be used to cover out- of-pocket health care expenses.

17. Slide 17 Total Help Total Hurt Net Difference Less Helpful Ideas - Kansas Repeal the tax cuts that have been enacted over the past few years for Americans who make over two hundred and fifty thousand dollars a year in order to help employers be able to offer health coverage to their employees. Eliminate the current tax credit employers receive for providing health coverage to their employees and instead provide all Americans with a tax credit to select and buy their own health insurance. This individual tax credit would reduce Americans’ taxes by two thousand five hundred dollars for singles and five thousand dollars for families. Guarantee all Americans a choice of health plans, either from a private insurer, or from a new public government plan offered at a sliding scale cost based on income. Employers would be required to offer a choice of the public plan and at least one private plan to all employees and small businesses would receive discounts based on a sliding scale. Allow trade or professional organizations, churches, and unions to offer health insurance plans to their members around the country.

18. Slide 18 Net Difference Require employers who have ten or more employees who today do not provide health coverage to their employees to NOW pay four percent of their payroll to help cover the uninsured. HelpHurt The One Statement Where A Majority Of Respondents Say This Will Hurt A majority of respondents in Kansas say an employer mandate would hurt their small business. Net Difference Require employers who have ten or more employees who today do not provide health coverage to their employees to NOW pay four percent of their payroll to help cover the uninsured. HelpHurt National Kansas

19. Slide 19 Promote a government- sponsored pool for small businesses 2-9 Employees 10-24 Employees 25-50 Employees Kansas Core Ideas Most Important To Focus On First - Kansas Create a new small business tax credit Provide all Americans with a tax credit to select and buy their own health insurance Make health insurance portable On an open-ended survey question, only five of the proposals received a double- digit mention as the one or two proposals that would help their businesses the most in Kansas. Expand & encourage health savings accounts

20. Slide 20 After testing each idea individually, we created policy bundles to combine different policy ideas into three different policy approaches. Support is higher for a more market based reform approach or a government sponsored pool/tax credit reform approach.

21. Slide 21 Would provide all Americans with a tax credit to select and buy their own private health insurance that they could keep and take with them between jobs. This would eliminate the current tax credit employers receive for providing health insurance to their employees. It would expand and encourage the use of tax-free health savings accounts to cover out-of-pocket health care expenses, while allowing organizations, churches, and unions to offer health insurance plans to their members around the country. Medical liability reform would be passed to eliminate lawsuits against doctors who have followed correct guidelines and safety standards in patient care. OPTION 1: Market Based Reform Approach 68% 28% 30% NationalKansas FavorOppose +40%+38% Strongly Favor 26% Strongly Favor 23% Strongly Oppose 13% Strongly Oppose 15%

22. Slide 22 53% 61% 45% 39% NationalKansas FavorOppose +8%+22% 78% 66% 20% 34% NationalKansas FavorOppose +58%+32% Would promote a government-sponsored pool for small businesses to purchase insurance at bulk purchasing rates. Small businesses would get a new tax credit to make it easier to offer health coverage if they pay at least fifty percent of the cost of employee health insurance. This proposal would require employers with ten or more employees who today do not provide health coverage to pay four percent of their payroll to help cover the uninsured. Would promote a government-sponsored pool for small businesses to purchase insurance at bulk purchasing rates. Small businesses would get a new tax credit to make it easier to offer health coverage if they pay at least fifty percent of the cost of employee health insurance. With the four percent employer mandate proposal… Without the four percent employer mandate proposal… Strongly Favor 23% Strongly Oppose 25% Strongly Favor 15% Strongly Oppose 23% Strongly Favor 37% Strongly Oppose 12% Strongly Favor 32% Strongly Oppose 21% OPTION 2: Government Sponsored Pools And Tax Credits Approach

23. Slide 23 53% 50% 44% 48% NationalKansas FavorOppose +9%+2% Would guarantee all Americans a choice of public or private health plans that they could keep and take with them between jobs. Employers would be required to offer a choice of the public plan and at least one private plan. Insurance companies would not be allowed to deny people coverage due to age or pre-existing conditions. This proposal would be paid for by repealing the tax cuts enacted over the past few years for Americans making more than two-hundred and fifty- thousand dollars. OPTION 3: Guaranteed Government Approach. Strongly Favor 26% Strongly Oppose 33% Strongly Favor 22% Strongly Oppose 35%

24. Turning Questions into Answers www.pos.org ● 703-836-7655 www.lakeresearch.com ● 202-776-9066