Senate Committee Explores If Health Reform Proposals Meet Needs of Small Firms

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Senate Committee Explores If Health Reform Proposals Meet Needs of Small Firms

The Senate Committee on Small Business and Entrepreneurship recently held a hearing on health care reform and small business entitled, “Reform Done Right: Sensible Health Care Solutions for America’s Small Businesses.”

In her opening statement, Committee Chair Senator Mary Landrieu (D-La.) expressed concerns about the impact of high health care costs on small firms. “Today, small businesses are seeing their health care costs increase faster than the prices of the products and services they sell – four times faster than the rate of inflation since 2001,” said Sen. Landrieu. “If Congress fails to act now, health care costs are only expected to continue to rise.”

Witnesses from the Small Business Administration (SBA), Treasury Department and small business groups, as well as small business owners testified before the committee that current health care costs were unsustainable for small business owners, and offered a variety of suggestions to deal with rising costs.

“Less than half of small employers with three to nine workers offer health coverage. Fully 13 million of America’s uninsured workers are employed by businesses with fewer than 100 employees,” stated SBA Administrator Karen Mills. “It’s clear that we can’t help our nation’s uninsured without addressing the need for access to affordable health insurance for small businesses.”

Witnesses before the committee testified in support of an insurance exchange with as large a pool as possible, tax credits to help small businesses pay for health care coverage for employees, allowing small businesses and their employees to purchase insurance across state lines and a measure that prohibits insurance companies from denying coverage due to pre-existing conditions.

Also noted in the testimony of multiple witnesses was the current inequity in the tax code faced by the self-employed because they are not allowed to fully deduct the cost of health insurance as larger businesses are. These witnesses called for this inequity to be remedied and the self-employed to be able to fully deduct the cost of their health insurance premiums for the purposes of both income and self-employment taxes.

Multiple witnesses expressed concern at how small businesses pay significantly more than larger businesses for the same coverage, and also were opposed to an employer mandate to provide health insurance coverage.

To read testimony if full and view footage of the hearing, please click here.

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