Health Care Reform: A Lifeline for Small Businesses
“The high cost of health care is killing us.” So testified John Arensmeyer, the founder and CEO of the Small Business Majority, before a congressional committee regarding its health care reform draft proposal. The Small Business Majority (SBM) is a nonprofit, nonpartisan organization representing 27 million Americans who are self-employed or business owners of less than 100 employees. SBM is supporting comprehensive health care reform efforts that control the skyrocketing cost of health care to make coverage affordable and improve the competitiveness of small businesses. A significant portion of the SBM membership is uninsured: of the 45 million uninsured Americans in 2007, almost 23 million were small business owners, employees or their dependents.
At the hearing, Arensmeyer testified that the crushing cost of health care was reported to be the biggest overall problem by 78% of small businesses responding to a Robert Wood Johnson Foundation survey-outranking even fuel and energy costs and the weak economy. A telephone survey of small business owners in 16 states furtherrevealed that 72% are struggling to afford health insurance and 69% say reform is necessary to save the economy. The results are not partisan; 68% of respondents identified as Republican or independent.
“Health care reform is not an ideological issue—it’s an economic one,” said Arensmayer. Small businesses are the economic engine of our country; when they struggle, our entire economy struggles. Health insurance companies charge the self-employed and small businesses much higher rates than larger companies. Consequently, small businesses are forced to either drop coverage for their employees, charge employees a higher share of the premiums or dramatically scale back health care coverage.
“It’s common to hear about double-digit premium increases each year, eating into profits and sometimes forcing staff reductions,” Arensmeyer testified. He called for:
- guaranteed availability of coverage
- no exclusions for preexisting health conditions
- health insurance rating rules that prohibit adjustments for health status
- a cap on premiums and out-of-pocket spending
- marketplace transparency
- affordability credits to ensure that small business employees can actually participate without financial hardship
Health care costs are growing faster than the overall economy and without comprehensive health care reform, small businesses will pay nearly $2.4 trillion dollars over the next 10 years in healthcare costs for their workers, according to MIT economist Dr. Jonathan Gruber. Further, without reform, 178,000 small business jobs are estimated to be lost by 2018 as a result of healthcare costs.
Comprehensive health care reform is essential for the health of American small business, which is essential for the American economy and is a cornerstone of the American notion of opportunity and growth. We all need a health care system that controls costs, restores a sense of control and choice, and gets out of the way of individual enterprise.
