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Health Care Reform Must Address Small Business Needs

by Joan Trombetti, Writer | June 08, 2009
A proposed bill would allow small
businesses to obtain coverage at negotiated
bulk rates through purchasing pools
Following the White House report that outlined the potential economic gains from health care reform, lawmakers on the House Small Business Committee recently heard from small business owners who said that help to relieve rising costs must come quickly or they will be forced to drop health care coverage. They said that if health care reform addresses their unique needs and makes coverage more affordable they could remain competitive, boost their bottom lines and create more jobs.

Rep. Nydia M. Velazquez (D-NY), Chairwoman of the House Small Business Committee said that small businesses are already struggling with the current economic downturn; spiraling health care costs are only adding more pressure and all of the committee's work to bring the economy back on track will be undermined if they do not rein in health care costs.

Health care costs have climbed at twice the rate of inflation over the last two years, and for small firms, premiums have jumped 100% over the last 10 years. Although most large employers provide their workers with some form of coverage, only 36% of businesses with 10 or fewer employees sponsor health insurance.

Both witnesses and Members of the Committee argued that measures to restructure the health insurance market would need to address small businesses needs. Velazquez said that if health care reform is to succeed, it must take into account the needs of our nation's entrepreneurs, and small businesses and their employees are disproportionately represented among the uninsured.

Although many states have in recent years regulated the rates that insurance companies can charge in the small group market, Members of the Committee said that those regulations, on their own, have not proven sufficient to keep costs down for small employers, and lawmakers stressed that action at the federal level would be necessary to guarantee access to quality affordable health insurance for small companies.

During the hearing, witnesses praised CHOICE Act, bipartisan legislation introduced by Velazquez and Rep. Sam Graves (R-MO), the Ranking Member of the Committee.

The bill would allow small businesses to obtain coverage at negotiated bulk rates through purchasing pools. Witnesses said spreading risk through pooling mechanisms such as the CHOICE Act or a Health Insurance Exchange would help level the playing field for small businesses providing health coverage.