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Health Care Reform Works for Small Biz

I testified before the Health Subcommittee of the House Energy & Commerce Committee on March 30 about the benefits of the Affordable Care Act (health care reform) for small businesses. Below is the summary of that testimony.  You can read the full version at the Main Street Alliance’s blog, or you can watch the hearing on Youtube.  Tune in at 1:44:30 if you just want to watch my statement.

I’ve been a small business owner for 17 years, and now employ 29 people.  I’ve been offering a group health plan since 2000 or so.  Since we started offering coverage, our rates have gone up every year.  Two years ago, I switched to a new insurer that does rating differently, spreading risk and costs more evenly.  This is saving me money.  I see it as a preview of the new health insurance exchanges coming in 2014.

Small businesses have found their ability to create new jobs undermined by health insurance costs that have more than doubled in the last 10 years.  The argument that the ACA will cost our economy jobs ignores our experience of the last 10 years, where skyrocketing insurance costs and the lack of any concerted response undermined our ability to create jobs.  The real threat to job creation would be to repeal the health care law and return to a system that stacks the deck against small businesses.

While some may raise concerns about the health law’s employer responsibility requirement, we have to remember two facts.  First, over 95% of our nation’s businesses have less than 50 workers, and so will not be touched by this requirement.  Second, 96% of businesses with more than 50 workers already offer health coverage.  If some businesses over the 50 employee threshold complain that paying for health care will harm their ability to create jobs, we’ve got to remember that when they don’t pay, the rest of us pay their way for them, and that hurts our ability to create jobs.  This is anti-competitive.

Small businesses are eager to put the health care nightmares of the past behind us and move forward.  Already, news reports are suggesting that more small businesses are signing up for health coverage since the passage of the new law – both in Nebraska and across the country.

The Affordable Care Act includes a number of provisions that will give states and small businesses new tools to get a handle on health insurance costs and allow us to invest in job creation.  These measures include stronger rate review, the value for premiums (MLR) requirement, and the state insurance exchanges.  Together, these provisions that control costs and expand coverage will reduce cost-shifting.

Insurers find an excuse to raise rates every year.  If they’re raising rates again this year, it’s in spite of the health care law, not because of it.  Even executives from the insurance industry have admitted the new law is not to blame for their rate increases.

Small businesses are benefiting already from the new law and looking forward to more improvements around the corner.  Our country and our economy can’t afford to send us back to a health system that stacks the deck against us.  We’ve got to keep moving forward.

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