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Healthcare Reform the Top Small Business Concern

By Caleb Groos | Last updated on

What do we repeatedly hear is the number one driver of new jobs and innovation in the US? Small business. And the number one hurdle faced by small businesses? Health care costs. This week the National Small Business Association (NSBA) launched its Health Reform Today website, while today, the Government Accountability Office (GAO) released a report finding that the health insurance market for small business has become dominated by few insurance companies.

In an NSBA press release, NSBA President Todd McCracken states that "[t]he number of small-business owners who are able to provide health insurance to their employees has dropped from 67% in 1995 to 38% in 2008." As noted in another NSBA release, almost half of small business owners surveyed in the NSBA's 2008 year end economic report cited heath care costs as the single largest threat to the wellbeing and survival of their business.

The NSBA's Health Reform Today site contains policy recommendations, profiles of small business owners struggling to provide heath care to their employees, and results of NSBA member surveys. According to the NSBA's press release, NSBA's policy recommendations include a requirement that individuals obtain health insurance, a federally-defined benefit package, low-income subsidies, tax incentives based on the cost of the federal package, and enhanced quality, transparency and health information technology.

Meanwhile, as noted in the Wall Street Journal's Independent Street, the GAO released a report today raising further alarm over the weight of health insurance costs on small businesses. The GAO found that in 34 out of 39 markets measured, the top 5 health insurance firms dominated 75% of the business from businesses with 50 employees or less.

Less competition typically means higher prices. And higher process are exactly what small businesses have seen for health care costs recently -- double digit percentage increases annually since 2003, according to the NSBA. According to the NSBA, these costs are why only 38% of small businesses could provide health insurance in 2008.

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