Because Congress failed to act last week, America’s 25 million small businesses face a health care crisis that will get worse every day.
The current situation endangers our entire economy. Although they provide well over half of our nation’s total jobs, many small businesses struggle every day to provide health care for their workers.
In 2005 alone, health care costs rose three times faster than inflation and even faster than that for many small businesses. Many small firms had to cut benefits or eliminate health coverage entirely. Some even had to lay off workers. Right now, more than 35 million Americans — including about 60,000 people in the District — go without health insurance. A disproportionate share of them work for small businesses.
By themselves, small firms and self-employed individuals have almost no leverage with large insurance companies. For them, this represents an enormous disadvantage. If they want to join with others to buy insurance through national associations, they have to deal with an enormous array of state-level health insurance regulations and benefit mandates. Among Virginia, Maryland and the District impose more than 100 different coverage mandates. All of these regulations add to the cost and complexity of coverage. While legislatures pass them with the best of intentions, these requirements increase both the cost of insurance and the number of Americans who cannot afford it.
Big businesses, for the most part, don’t have to deal with these burdensome regulations. Federal law lets large companies like Wal-Mart, Time Warner, Boeing and Northrop Grumman bypass expensive benefit mandates and varying health insurance regulations to provide affordable, comprehensive coverage for their workers. Small businesses, I believe, should have the same right.
Last week, the Senate discussed a bipartisan proposal that would have created a new way for small enterprises to purchase health coverage: Small Business Health Plans. Under the legislation that we debated through most of the week, small employers would have gained more clout with insurance companies. By joining national and regional associations, they could have bypassed burdensome mandates and chosen less-expensive policies. Groups such as the National Association of Realtors and the National Black Chamberof Commerce would have found it much easier to offer their members a wide choice of high-quality health plans. States, not federal regulators in Washington, however, would have continued to oversee plan operations.
Although one principled Democrat, Nebraska’s Ben Nelson, worked hard for the plan, nearly all other Democrats simply decided to obstruct it. The law would have cut through red tape to make it easier for millions of Americans to gain health insurance, but Democrats in the Senate launched a massive campaign to stop the effort in its tracks.
Unfortunately for our nation, they succeeded.
When Congress eventually passes them — as I believe it will — small-business health plans will help repair America’s broken health care system. But they cannot do the task alone. Although Democrats also obstructed efforts to pass medical liability reform earlier this month, Congress will need to return to the issue again until we pass a bill that reigns in the small group of lawyers who have wreaked havoc in our medical system. We also should continue the work we’ve started to roll out privacy-protected electronic medical records for every American.
Fixing America’s health coverage system will take a lot of work. Its problems will not go away.
Sen. Bill Frist, R-Tenn., is the Senate Majority Leader.
