Washington, DC, March 15, 2007--The president of the National Federation of Independent Business, the nation's leading small-business advocacy group, testified before the U.S. House Committee on Small Business. Todd Stottlemyer addressed the challenges and solutions to health insurance coverage for small businesses -- the No. 1 issue facing small-business owners.
NFIB President and CEO Todd Stottlemyer (left) speaks with Ranking Member Steve Chabot (1st Dist.-Ohio) at a U.S. House Small-Business Committee hearing on solutions to health-insurance coverage for small businesses.
The ever-increasing cost and lack of available, affordable health-care options for small businesses is not a new problem for America's small businesses. Nearly 63 percent of all uninsured workers were either self-employed or working in private-sector firms with fewer than 100 employees. Additionally, the small-business community pays, on average, 18 percent more in health-insurance premiums for the same benefits as those in the largest firms. In testimony delivered today, Stottlemyer highlighted a four-fold problem contributing to small businesses' health-care woes -- minimal competition, lack of bargaining power, administrative inefficiency and expensive mandates.
"There is inadequate competition among insurance carriers in the small-group market. With few options, the smallest employers and employees are held captive to premium increases because there really is nowhere else for them to go," said Stottlemyer in testimony. "Additionally, due to their size, small businesses are unable to spread risk across a larger population and end up with far less bargaining clout. The result of few options and even less bargaining power is higher prices."
Stottlemyer expressed NFIB's support of a comprehensive approach to helping small businesses access affordable, quality health insurance. Top priorities would include developing health-insurance purchasing pools for small businesses, creating tax-based incentives and implementing cost-containment measures.
"Congress should take steps to develop health-insurance purchasing pools. By increasing the size of the pool, it increases the clout and bargaining power of small businesses, decreasing costs and increasing coverage," said Stottlemyer. "Controlling costs is essential to small businesses. No discussion is complete without focusing on cost containment, especially in terms of mandates. More mandates mean higher costs, so we must draw a line in the sand and understand there is a difference between what we want and what we need."
