Legislation targets small-business health insurance costs
03 04 08 - 14:36
Thursday, Apr 3, 2008
By Aaron Sadler
Stephens Washington Bureau
WASHINGTON - Architects of previous attempts to make health insurance more affordable for small businesses announced a new approach Wednesday endorsed by interest groups that rarely see eye-to-eye.
The bipartisan bill, lauded as a compromise and improved version of a measure introduced in 2006, allows small businesses to join into insurance purchasing pools. It offers tax breaks to offset insurance premium expenses for employers.
Sponsors of the legislation touted it as a "breakthrough" bill and said they would lean on support of three powerful lobbies - the National Federation of Independent Businesses, the Service Employees International Union and the National Association of Realtors - to push the measure through Congress.
Sen. Blanche Lincoln, D-Ark., is a lead sponsor of the Small Business Health Options Program legislation. Her name was also on the unsuccessful 2006 bill. She advocated a bill to let small businesses pool their purchasing power in 2004.
"The small business health-care crisis is undoubtedly the issue that I hear most about when I'm home in Arkansas," Lincoln said. "It affects absolutely every community in our state, as well as our entire nation, as well as millions of working families."
About 500,000 people in Arkansas are uninsured. There are an estimated 47.1 million uninsured Americans.
Small-business employees and the self-employed are often among the uninsured because medical coverage is frequently too expensive. The small companies do not receive the benefit of a large risk pool and resulting lower premiums. Administrative costs are also a burden.
The legislation would apply to businesses with fewer than 100 employees and the self-employed.
Employers could join state- or nationwide pools to spread their risk. They would be eligible for tax credits of up to $2,000 per family insured if they pay 60 percent or more of employee premiums.
Health status rating would be prohibited, so that small businesses would not be hit with massive premium increases if only one or two employees become ill.
State regulation will also be maintained. Nationwide pools would not be available until 2011, giving states time to create their own programs for small businesses.
The state regulatory issue is one of several key components to this legislation compared to similar bills previously.
Arkansas Insurance Commissioner Julia Benafield Bowman was open-minded about the bill.
"At first glance, the bill appears to address my concerns for keeping state regulation for consumer protection purposes," Bowman said. "It is obvious that much thought and preparation has been put into this bill to offer cost savings and greater choices for employers and consumers."
Senate Majority Whip Richard Durbin, D-Ill., said he and Lincoln have worked on the legislation for more than a year. They brought in the Republican-leaning National Federation for Independent Businesses for support on an approach different than the 2006 effort. That bill was criticized because its rules may have caused both buyers and insurance companies to opt out of the program, said the head of the nation's top small-business association.
Durbin said Democrats found "common ground" with the federation and with the Realtors group. One in four Realtors are uninsured, officials said.
Sens. Olympia Snowe, R-Maine, and Norm Coleman, R-Minn., are co-sponsors of the bill.
Also Wednesday, Lincoln joined three other women senators to introduce a bill that would improve veterans health-care services for women.
Women currently represent 7 percent of the veterans population and comprise 14 percent of active duty, National Guard and reserve troops. The Veterans Administration estimates the number of women who use VA health services will double in the next five years.
The bill would authorize several new programs that address health-care issues unique to female veterans. It would improve programs tied to military sexual trauma.