News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman


For Immediate Release                                                       CONTACT:  Alex Haurek; Duncan Neasham
June 4, 2009                                                                                                                 (202) 226-3636

Addressing Small Business Needs Key to Health Care Reform

WASHINGTON, D.C. — On the heels of a White House report outlining the potential economic gains from health care reform, lawmakers on the House Small Business Committee heard today from small business owners who said relief is sorely needed from spiraling costs that are forcing them to drop coverage. Entrepreneurs said healthcare reform that addresses their unique needs and makes coverage more affordable would help their firms remain competitive, boost their bottom lines and allow them to create jobs.

“All our work to bring the economy back on track will be undermined if we do not rein in health care costs,” said Rep. Nydia M. Velázquez (D-NY), Chairwoman of the House Small Business Committee. “For small businesses already struggling with the current economic downturn, spiraling health care costs are only adding more pressure.”

In the last two years, health care costs have climbed at twice the rate of inflation. For small firms, premiums jumped 100 percent over the last decade. While nearly all large employers provide their workers with some form of coverage, only 36 percent of businesses with 10 employees or fewer 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.

“Small businesses and their employees are disproportionately represented among the uninsured,” Velázquez said. “The simple fact is that if health care reform is to succeed, it must take into account the needs of our nation’s entrepreneurs.”

Lawmakers stressed that action at the federal level would be necessary to guarantee access to quality affordable health insurance for small companies. 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 keeping costs down for small employers.

“Meaningful healthcare reform will need to include small group market reform,” Velázquez said. “While many states have adopted policies to address the price disparities facing small businesses, this has created an ineffective patchwork system.”

During the hearing, witnesses praised CHOICE Act, bipartisan legislation introduced by Velázquez 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.

“By making coverage affordable for our small businesses, the CHOICE Act recognizes that solving the health care crisis begins by addressing the insurance needs of small businesses,” Velázquez said. “If crafted correctly, healthcare reform will help millions of families get the affordable care they need and free our entrepreneurs to lead the way to economic recovery and long term prosperity.”

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Click here to view video from today’s hearing.