This report originally appeared in the January 2010 issue of DOTmed Business News.

The Senate Committee on Health, Education, Labor, and Pensions held a recent hearing to examine the increasing health costs facing small businesses. Senator Tom Harkin (D-IA) said in light of the congressional debate on health reform bills, meaningful reform "cannot come soon enough" for the millions of small businesses desperately struggling to provide health care to employees as costs continue to spiral.

Art Cullen, editor of the Storm Lake Times, Storm Lake, IA, discussed how the small newspaper pays nearly $50,000 per year for health insurance coverage. Cullen stated that if the insurance costs were not so high, the paper could hire more employees. Walter Rowen, President, Susquehanna Glass Company, Columbia, Pa., recounted how his company struggled in finding new insurance after the rise in policy costs. The company was forced to settle on a policy increasing premiums by about 43%, but carrying an even higher deductible that the employees will be forced to pay.

Jonathan Gruber, professor of economics, Massachusetts Institute of Technology of Cambridge, Mass., testified that small businesses and their employees face four major impediments in the employment-based system of health insurance in the U.S.: individuals afraid to start small businesses because of a fear of losing health insurance; higher loading factors that small business must pay on insurance leading to higher costs and less coverage; unpredictable nature of premium costs; and limited choice of health plans offered to employees. Gruber stated that health care reform would help through reformed insurance markets, the ability of small businesses to use exchanges for purchasing insurance and small business tax credits.

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