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Washington Watch - June 10, 2009

Letter From The Editor: Washington Watch News & Updates

Hello friends,

You may have noticed some big changes in Washington Watch lately.

In fact, if you look throughout, you’ll notice even more new features - all part of the NASE’s effort to add to your online experience. For the past week, we have been doing some maintenance and clean up to make sure everything comes together correctly. We are doing our best to resolve these growing pains quickly so as to minimize their impact on you.

We are also starting a new weekly feature in Washington Watch – the Small Biz Health Care Roundup. The Obama Administration and Congress continue to work hard pulling together health care policy in order to meet the President’s goal of passing a meaningful reform measure this year. To help keep you up-to-date on the debate as it relates to micro-businesses and the self-employed, the NASE’s Washington Watch team will start compiling a list of top health care articles of the week for your perusal. If you see something you think I should include, drop a line via

Kristin Oberlander, Editor
Washington Watch

Small Biz Health Care Roundup

Senate Panel to Work on Health Overhaul Next Week, Dodd Says (Bloomberg)
Senate health committee will begin work June 16 on a plan to revamp the U.S. health-care system. The plan would require everyone to have health insurance, penalize those who don’t buy it, provide coverage subsidies for lower-income Americans and bar insurers from limiting coverage. It would also include an employer mandate, which would require employers to supply health insurance for workers or contribute to the cost of other coverage.

U.S. House Health Bill To Include Government Plan (Reuters)

US House Democrats' health proposal has new public plan. Republicans and insurers oppose the plan which they say would compete with insurance companies.

Congress: Health-Care Politics (MSNBC)
A rundown (complete with videos and other links) of who is saying what on health care reform in Washington, D.C.

More news results on health care and the self-employed.


June 15th: New Small Business Loans From The SBA Set To Launch
Beginning June 15th, America's Recovery Capital (ARC) loans are expected to be widely available to businesses. The new financing method allows deferred-payment of up to $35,000, to be used for principal and interest payments on existing, qualifying debt/loans and are 100% guaranteed by the federal government. The program is a new, temporary initiative set into motion by the Recovery Act.
Obtaining small business financing has traditionally been a challenge for the self-employed and particularly complicated to navigate in the current economic climate. The NASE works with the Small Business Administration (SBA) to help increase access to capital and lends our support to federal initiatives that have proven helpful to micro-business growth, such as the 7(a) and 507 loan programs.

Here are a few important facts to know about the program:

  • An ARC loan is a deferred-payment loan of up to $35,000, to be used for principal and interest payments on existing, qualifying debt/loans.
  • There is a disbursement period of up to six months, which is followed by 12 months with no repayment.
  • ARC loans are not designed for new small businesses.
  • ARC loans can be used to pay home equity lines of credit and credit card obligations if the debt is for business purposes that meets 7(a) standards.

For more information on ARC loans, visit the SBA online.


Small -Business Owners Tell Congress They Need Health Reform Now
A reflection of the varied small businesses across America, small-business owners with businesses ranging from a café to a commercial printing company gathered in Washington recently to advise the House Committee on Small Business on the health care reform proposals that would most help small businesses.

“As a general rule, small business premiums shoot up between 8 percent and 16 percent annually…. For small businesses already battered by the recession, these costs have become impossible to absorb,” said Committee Chairwoman Nydia Velazquez (D-N.Y.) in her opening statement. “As rates continue to climb, entrepreneurs are facing tough choices - cut healthcare, or cut jobs.”

All of the witnesses before the committee stated that they wanted to provide their employees with health care coverage, but even those currently providing insurance noted that the often double-digit increases in premiums were making it impossible for them to continue providing these benefits. 

Many witnesses testified in support of options such as a national health insurance exchange and pooling arrangements, but were opposed to mandates. Witnesses also supported equalizing tax treatment for the self-employed, targeted tax credits, price transparency from insurers, and the adoption of health information technologies.


SBA Advocacy Office Releases Rankings of Small Business Lenders
The SBA's Office of Advocacy recently released the latest edition of their annual study on lending to small firms. The study found that for the year ending in June 2008, the rates of small business and micro-business lending were down from the previous one-year period, but were still in positive territory. The largest increase was in the number of microloans (loans under $100,000), which increased by 15.7 percent. The report states that this may be an indication that more loans are being made through business credit cards.

In the introduction to the study, authors noted that access to credit is vital to small business survival, “and nearly 60.4 percent of all small firms borrow from a traditional source such as loans/capital leases and credit lines; slightly more than two-thirds obtain credit from the banking sector.”  

This edition of the annual study includes data on banks, as well as other depository institutions like federal and state savings banks and savings and loan associations, and also offers expanded geographic coverage of U.S. territories.

For the one-year period ending in June 2008, the total value of small business loans (under $1 million) increased 4 percent, and the value of microloans (under $100,000) increased 6.8 percent. The study includes helpful information for small businesses, notably state-by-state rankings of the small business lending of banks and other depository institutions.
The full study, including data on the top institutions lending to small businesses in each state, can be accessed online at


Hidden Cycle of Fees Plague Health Care Industry
The “hidden health tax” is responsible for rising premium costs for businesses and individuals, according to a report released by Families USA, a health policy think tank. The “tax” occurs when doctors, hospitals and other care facilities must pass the cost of caring for uninsured on to those who have coverage.

According to the study, the uninsured received $116 billion worth of care from hospitals, doctors, and other providers in 2008. Costs shifted from the providers to insurers by way of higher charges for health services. Then, those charges shift to families and businesses in the form of higher premiums.

Other key findings include:

  • The uninsured paid for, on average, more than one-third (37 percent) of the total costs of the care they received out of their own pockets.
  • Third-party sources, such as government programs and charities, paid for another 26 percent of that care.
  • The remaining amount, approximately $42.7 billion in 2008, was unpaid and constituted uncompensated care.
  • For family health care coverage, the hidden health tax was $1,017.
  • For health coverage provided to single individuals, the hidden health tax was $368.


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