Health insurance reform will help small businesses

By Frank Knapp Jr. - Special to The Herald

The letters that ran in Sunday’s Rock Hill Herald clearly show how rancorous the debate over national health insurance reform has become. While some will try to use this debate for partisan purposes, small businesses have a different priority in this matter — to make health insurance more affordable.

The South Carolina Small Business Chamber of Commerce supported the U.S. House health insurance reform bill and takes exception to the letter to the editor from York County Republican Party Chairman Glenn McCall.

Mr. McCall makes the following highly misleading assertions about the House bill. He calls it a “government-run health care bill” that will “increase families’ health care costs, increase the deficit, increase taxes on small businesses and the middle class, and cut Medicare.” It is important that such negative characterizations are corrected.

The House bill is not a “govrnment-run health care bill.” It is a comprehensive bill, and thus many pages, to make health insurance more affordable for individuals and businesses.

There is only one small piece of the legislation that calls for the creation of a health insurance plan that would be backed by the federal government. This plan would be very similar to any private plan in that no one would be forced to buy it, it would not provide free insurance, it would negotiate rates with health care providers and it would have to stand on its own without government subsidy. But because it would not have a profit motive or give exorbitant benefits to executives, premiums might be more affordable and thus provide real competition to the private health insurance market.

The House bill will not increase health care costs for families or small businesses. Here is why:

Every family in the state with income below 150 percent of the federal poverty level ($33,100 for a family of four) would be eligible for Medicaid. About 20 percent of workers in South Carolina would receive their health insurance from the federal government and not from their employer or pay premiums themselves.

Families with incomes from 150 percent to 400 percent of the federal poverty level ($73,240 for a family of three) would receive premium assistance on a sliding scale to make health insurance more affordable.

The “hidden health tax” ($1,017 a year for family coverage) in every premium today to pay for uncompensated care for the uninsured would all but go away.

Tax credits would encourage most of our small businesses to offer health insurance and pay a large part of employee premiums.

Millions of individuals and small business employees would join an insurance pool to leverage large numbers to drive down premiums. Out-of-pocket medical expenses would be capped and lifetime medical caps lifted to prevent bankruptcies.

The House bill would not increase the national deficit. According to the Congressional Budget Office, the non-partisan and independent entity that evaluates the cost of legislation, the bill is revenue neutral, just as called for in the House Budget Resolution. In fact, the CBO says that the bill would reduce the need for future deficit spending by decreasing Medicare costs.

The House bill would not increase taxes on small businesses and the middle class. The bill calls for families reporting adjusted gross incomes of over $1 million to pay an income tax surcharge on income above that threshold. These are not middle-class families and they are not owner-operated small business people.

The House bill would not cut Medicare’s guaranteed medical services for seniors. However, it would cut subsidies to private insurance companies, stop giving incentives for duplicative tests and reduce fraud. Thus, Medicare’s overall budget can be reduced in the future without negatively impacting seniors.

The Small Business Chamber believes that the House bill would make health insurance more affordable for both small businesses and individuals.and thanks Congressman John Spratt for his vote to move the reform bill along in the process.

We are confident that the Senate bill will be even more small businesses-friendly. To find out more about how the House health insurance reform bill will help small businesses, go to www.scsbc.org and click on issues.