Dear Senators Durbin, Snowe, Lincoln and Coleman:
On behalf of the nation’s leading small business association, we commend you for introducing the Small Business Health Options Program (SHOP). This legislation recognizes that the number one problem facing small business and the self-employed is the cost of health insurance, and seeks through insurance market reform and tax incentives to give them improved access to affordable healthcare.
Of the estimated 47 million Americans without health insurance, more than 27 million are small business owners, their employees and dependents. They shoulder the disproportionate burden of a broken healthcare system and have seen their healthcare premiums increase 129 percent over the last 8 years. Any healthcare reform, however big or small, must recognize the unique problems facing small business. Under current law, small businesses don't enjoy the same tax breaks, coverage or pooling options as large businesses and corporations; on average they pay 18 percent more for the same healthcare benefits.
We support your efforts to break the decades-long logjam that has blocked small business reform legislation from being enacted into law. As you know, the last effort to enact a small business reform bill stalled in the Senate in 2006 due to criticisms that its pooling structure and rating rules would create adverse selection, leave many with inadequate insurance policies, and ultimately lead to more uninsured. While we strongly disagreed with those criticisms, we realize that providing relief for small businesses means being flexible enough to try new approaches to resolve old disputes.
SHOP represents a different approach but one that seeks to achieve the same goals to lower costs for small business and a simpler way to shop for, and expand the choice of, health insurance policies. It allows small employers to expand their purchasing power by joining a state purchasing pool if states decide to offer them, allows for a nationwide pool by 2011, and incentivizes small businesses to join them with a targeted tax credit. The bill also seeks to stabilize yearly premium hikes through insurance rating reform. It reaches these goals through a framework that continues strong consumer protections and allows an appropriate transition period to a national pooling structure.
This legislation represents a strong bipartisan effort to make health insurance affordable for small business. We support SHOP's introduction in the hope that it can be a starting point for serious discussions on significant small business reform legislation that can be enacted this year.
Thank you for your support for small business.
Sincerely,
Todd Stottlemyer
President and CEO
National Federation of Independent Business
Get more information on the Small Business Health Options Program (512 KB, PDF)
