Health reform: Good for small business, according to President's economic advisors

Download PDF Copy

Aug 4 2009

A report from President Obama's Council of Economic Advisers finds that "health care reform would be good for small businesses because it would enable them to obtain better insurance coverage for less money," The Denver Business Journal writes.

"Small businesses pay up to 18 percent more than large businesses do for the same coverage because of high broker fees, administrative costs and adverse selection, according to the CEA's report." Christina Romer, chair of the CEA, "said the health care reform bills moving through Congress are specifically designed to address the burden the current health care system places on small businesses. The legislation would create insurance exchanges, where individuals and small businesses could 'choose among a multitude of plans that would provide better coverage at lower costs than they could find in the current small group market,' the report said."

But, The Journal notes: "Many small business groups also doubt that health insurance would be cheaper under the House bills or the Senate HELP Committee bill. Including a government-run plan in the insurance exchange would undermine private insurers, ultimately driving premiums higher, they contend. Not all small businesses would be able to access the exchange. Plus, the bills call for the federal government to establish minimum coverage levels for insurance plans, which could be pricier than what small businesses now provide. (Hoover, 8/3).

In other news, "after a couple of largely fruitless months talking up how retooling health care will squeeze hundreds of billions of dollars of savings from a broken system, the White House is recalibrating its message and emphasizing consumer-friendly aspects," CQ Politics reports. "Beginning Wednesday with a return trip to economically devastated Elkhart, Ind., the president and his proxies will launch a monthlong blitz of town hall meetings, grass-roots lobbying and television advertising designed to rally public support for quick votes on health plans in the House and Senate following the August congressional recess." A September address to Congress may also be in the works" (Bettelheim, 8/4).

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.