Published: August 14, 2009 10:32 pm      

Small businesses would benefit from health care reform

As Americans debate how best to reform our nation’s health care system, two things have become increasingly clear.

First, small businesses are crucial to our local economy. In fact, small businesses are an important source of job growth all across the United States.

Firms with fewer than 20 employees accounted for about 18 percent of private sector jobs in 2006, but made up nearly 25 percent of net employment growth from 1992 to 2005.

Second, the current health care system is not working well for small business owners and their employees. The fact is that the current U.S. health care system imposes a heavy “tax” on small businesses. The result is that small businesses pay up to 18 percent more per worker than large firms for the same health insurance policy.

That’s why small businesses are often unable to provide health insurance for their workers.

We’ve taken some steps at the Iowa Capitol to make it easier for small businesses to provide affordable health care to their employees. But much more needs to be done, and there’s no better time than now.

The ongoing health reform discussions in Congress include proposals to reduce the current burden on small firms and their workers, such as:

n Allowing small businesses that meet certain criteria to purchase health insurance through an “insurance exchange,” where they can choose from a multitude of plans that would provide better coverage at lower costs than is currently available.

n Providing tax credits to small businesses that offer health insurance for their employees. This would help alleviate the disproportionately higher costs that small businesses pay, while encouraging them to offer coverage. The tax credit would be targeted to businesses with employees whose average wage falls below a certain threshold.

For more information on how proposed health reforms would help small businesses and their employees, check out these resources:

n The Economic Effects of Health Care Reform on Small Businesses and Their Employees: www.whitehouse.gov/assets/documents/CEA-smallbusiness-july24.pdf

n The Economic Case for Health Reform: www.newamerica.net/programs/health_policy/economic_case.



Roger Stewart, a Democrat from Preston, is a member of the Iowa Senate representing District 13.