10/04/2005
CONTACT: Michael Diegel, (202) 314-2004
LANSING, Mich. -- The health-care crisis in America begins with Main Street small businesses, a fact never made clearer than with the September release of the Kaiser Family Foundation and Health Research & Educational Trust's 2005 Annual Survey of Employer Health Benefits.
The Foundation reported that:
- Since 2000, 266,000 fewer firms are offering health insurance, and 90 percent of those are small businesses with between three and 24 employees;
- 60 percent of all firms offer health insurance, down from 69 percent five years ago;
- Only 47 percent of firms with three to nine employees offer health care; and
- 72 percent of firms with 10 to 25 employees offer health care and 98 percent of all large firms offer it.
Sixty-five percent of small-business owners who don't offer health care for their employees cite high costs as the reason. This problem is contributing to the roughly 820,000 Michigan residents who are currently uninsured.
Lack of access to affordable health insurance is a tremendous drain on small-business owners (who employ nearly 51 percent of all working people in Michigan) and their employees. Not surprisingly, more small businesses are either forced to shift costs to the employee, drop their family coverage or forgo offering insurance altogether.
Lack of affordable health care also affects the ability of a small business to attract and retain a quality workforce. Prospective employees who would like to work at a Main Street business often select a larger business that can offer more affordable health insurance.
Although Fortune 500 companies, unions and government employees are able to increase savings by pooling together in large groups when purchasing their health insurance, small businesses do not have this privilege. Federal law bars small businesses from banding together across state lines in order to gain the same savings as their counterparts in labor and big business.
Instead, an electrician or shop owner in Michigan is forced to buy health insurance that is regulated by the state. He falls under well-intended state mandates that force him to buy a Cadillac-style health insurance plan. Often, all he wants is a Ford or Chevy-type plan that covers the basics.
However, since small businesses are held to the numerous and expensive mandate requirements of the state (unlike big business and labor unions), they either pay for the Cadillac plan or run the risk of having no health insurance at all.
Clearly, the playing field is not level for small business.
Many of our members tell us they are at wits' end, but some of them are demanding action. And there is a solution: the "Small Business Health Fairness Act of 2005" (S. 406), introduced by Senators Snowe, Talent and Bond, would allow small-business owners to band together across state lines through their membership in a bona fide trade or professional association to purchase health coverage for their families and employees.
The National Federation of Independent Business/Michigan strongly believes that Small-Business Health Plans (AHPs) will help reduce the number of uninsured in Michigan and across the nation. Small businesses, which create the overwhelming majority of jobs, deserve to be treated fairly when they attempt to provide this most important benefit for their employees.
The U.S. House passed Small-Business Health Plan legislation in July by a vote of 263-165. However, the real fight is in the U.S. Senate.
NFIB/Michigan strongly encourages Sen. Levin and Sen. Stabenow to commit to improving the quality and cost of health insurance for small business and support Small-Business Health Plan. This would make health insurance more accessible and affordable for small-business employees and their families.
It is time for Sen. Levin and Sen. Stabenow to come together on this issue, realize the benefit of passing Small-Business Health Plans and support them when the issue comes to a vote.
