Letter concerning Sen. Baucus markup
September 22, 2009
The Honorable Max Baucus
Chairman, Senate Finance Committee
511 Hart Senate Office Building
Washington, DC 20510
Dear Chairman Baucus,
On behalf of National Federation of Independent Business, the nation’s leading small business organization, we commend you for proposing legislation recognizing that small business needs access to affordable health insurance. We urge the Committee to maintain the current voluntary employer-based system and ensure the bill implements reforms that reduce overall costs.
There are three main reasons why NFIB members have cited health insurance costs as their No. 1 problem for more than 20 years. First, their insurance costs have increased 123 percent since 1999 – a rate that is unsustainable. Second, there is a lack of competition in the marketplace. This year the Government Accountability Office concluded (for the third time) that there is continued consolidation of private insurance companies in the small group market, with the five largest insurers controlling a majority of the marketplace. Third, there is a lack of choice for employers and their employees. More than 85 percent of all employers are able to offer only one insurance plan to their employees.For these reasons, it is imperative that Congress act on providing real solutions to these very real problems.
Key components included in the Senate Finance proposal provide a path for Congress to reduce cost, invite competition and level the playing field for small business. Below are important areas that must be maintained and are critical to increasing access to quality, affordable healthcare for small business:
- Individual and Small Group Market Reforms – Federal rating reforms in the individual and small market are essential to any reform effort, and we believe the framework provides a strong first step. Allowing for variation on age, geography, family composition and personal behavior are important to ensure affordability and reward healthy behavior across populations.
- Health Insurance Exchange – An exchange modeled on provisions under the SHOP legislation (S. 979) will improve competition, allow for individual choice of plans and help provide a human resources function, something that small employers currently lack. Standardizing enrollment and easing the administrative burden will reduce cost and promote ease of purchase.
- Interstate Sale of Insurance – Allowing the purchase of insurance across state lines can and will produce competition. Currently, small businesses are prohibited from buying insurance outside of their state of residence, often prohibiting them from seeking out more affordable options for coverage.
- National Plans – Enabling national benefit plans to be sold across state lines in the fully insured market will level the playing field with large employers. Presently, small employers are at the mercy of their state regarding what is included in their benefit design.
Certain amendments proposed to the Chairman’s mark could pose a threat to our nation’s job creators. Amendments that include any version of the following will destroy jobs, drive up healthcare costs, erode the availability of private insurance and decrease choice and competition. NFIB will oppose any employer mandate on small business and any type of government-run public option.
Employer mandates - Mandates fail to increase affordability and, instead, hurt the most vulnerable employers. The financial impact of the employer mandate will have both short-term and long-term negative effects on small firms. In the short-term, it will harm the business itself, while in the long-term, it will harm their employees. Mandates that increase the cost of doing business are bad policy any time; they are especially destructive in tough economic times.
- Public Plan Option - The public option will further compromise the viability of private insurance, eventually restricting choice to a single plan - the government plan. Claims that a public plan could finance itself are unrealistic, resulting in a need for additional tax dollars that would further burden small businesses.
NFIB thanks the Chairman for his commitment to small business. Creating reforms that provide more affordable and accessible healthcare options for small employers and their workers is essential to the livelihood of America’s entrepreneurs. We look forward to working with the Chairman and members of the Finance Committee to make common-sense healthcare reform a reality.
Sincerely,
Susan Eckerly
Senior Vice President
Public Policy
cc: Members of the Senate Finance Committee