Several Owensboro business leaders said Thursday they believe the U.S. Supreme Court's decision to uphold the federal health care reform law is likely to create a cautious environment leading to fewer expansions and more cost to businesses and consumers alike.
The Greater Owensboro Chamber of Commerce is hoping to give its members more information at the July Rooster Booster Breakfast with health care reform and the high court's ruling as the main topic.
"It's certainly landmark and far-reaching legislation," said Darrell Higginbotham, president of Independence Bank. "And while I can appreciate the issue of addressing the needs of the uninsured, I am very concerned about the cost to the business community which could lead to negative job creation."
Higginbotham, a past president of the Greater Owensboro Economic Development Corporation, said small businesses employ the largest percentage of the work force, and when they are uncertain of the impact of legislation on their businesses, they will be conservative and cautious on expansion and new hires.
"There are still a lot of unknowns," he said. "My greatest concern with the law is the lack of significant incentives for wellness and preventive care and the lack of tort reform."
Josh Emmick, vice president of operations for Valor Oil, believes all small businesses are worried about what he terms the "Obamacare plan."
It's one more hurdle for them, he said.
"Valor has been lucky and not had to layoff a single employee through the economic downturn," Emmick said. "We are already battling, in our sector, with rising product cost, regionally decreased demand, and slimmer margins. Add all that together with the fact that banks are making it harder to borrow money, and it is very hard for small to medium businesses to stay ahead of the curve. I do believe this will push some companies to look towards outsourcing jobs to save on health care cost. We have spent three generations battling decisions made by our government, and I doubt this will be the last."
Valor is a full-line petroleum distributor in Owensboro that also blends and supplies racing fuel nationwide. The company recently partnered with Blue Sky East LLC in a new company called Blue Sky Heartlands to produce a new product called diesel exhaust fluid in Owensboro.
Ray Middleton, owner of On Time Fab Inc. said the Supreme Court decision surprised him. He said he was waiting until the ruling to take a harder look at how it may impact his growing business, but he doesn't see it stopping his growth plans.
Middleton, who this month was named the chamber's 2012 Small Business of the Year in the 1-10 category, has 10 employees including him and his wife. He pays 100 percent of the health care coverage for employees, and they pay for additional family members. He also is in the process of buying the building he has been leasing and expanding his business.
"My gut feeling is that I'm not going to not expand my business when I have the opportunity," he said."We're in the business to make money. If I have an opportunity, I need to do it and figure out how to absorb any costs. And that means passing it on."
The sentiment of driving up costs also is a concern for Wayne Foster, a past chamber president and current chairman of the Daviess County Economic Development Advisory Board.
"I can't speak for all small businesses, but I do think that all of us will take a long, hard look before we expand," Foster said. "Our insurance went up 30 percent year to year, and I can't explain it. Personally, I don't like the government mandating anything. I think, though, if it's not repealed, we will all adjust like we do, but it will take a long time."
Foster owns several businesses including American Patriot Getaway. Altogether, his companies employ about 75 people and provides insurance coverage for them.
He also does business with more than 100 contractors, and many of those do not carry insurance. Forced to buy it, they are likely to charge more.
"I'll pass it along," Foster said. "I think everybody will pay more."
The chamber has invited Harry Hayes, director of sales at Anthem's Wellpoint Companies, Inc., to speak about health care reform at the July 12 Rooster Booster Breakfast, and his comments will include the effect of the U.S. Supreme Court's ruling on the Patient Protection and Affordable Care Act of 2010, said Amy Jackson, new president and CEO of the Greater Owensboro Chamber of Commerce.
"For the chamber as a whole, we know it to be a big issue for our members," she said. "That's why, no matter what the ruling was, we chose health care reform as our topic. It is a timely topic and one that has a direct impact on our members."
The breakfast also will include a session after the meeting at which "anyone with an interest may try to get their questions answered," Jackson said.
"Even though the Supreme Court has ruled, there are still a lot of unknowns," said Gavin Roberts of Kentucky Farm Bureau Insurance and the chamber's board chairman-elect. "It may take another two years to learn how the law will affect businesses and how it will affect premiums and the marketplace. It's our job to inform our members as much as possible."
Joy Campbell, 691-7299, ?firstname.lastname@example.org