Small-Biz Owners Keep Tabs on Health Reform Fight

(WOMENSENEWS)–As Congress resumes session today after the summer recess, female business owners will be keeping an anxious eye on the battle over health care reform, hoping for relief from skyrocketing costs and gender discrimination in insurance coverage.

“The status quo is crippling small businesses, which pay up to 18 percent more than larger businesses do,” said Deborah L. Frett, CEO of the Washington-based Business and Professional Women’s Foundation, which promotes equity for working women. “Women start small businesses at twice the rate as men and usually have less capital, so these health insurance costs have a more severe impact on female entrepreneurs.”

Congress can’t ignore the 10.1 million female entrepreneurs, says Kelly Scanlon, chair-elect of the National Association of Women Business Owners, a Washington-based organization of 8,000 entrepreneurial women. “Small businesses generate 70 percent of new jobs in the U.S., so Congress must take action if it hopes to jump-start the economy.”

Although female entrepreneurs agree that everyone should have health insurance, they are concerned about whether mandates would require them to provide coverage they cannot afford. And like the rest of the country, the ranks of small business owners are divided over the best approach to health reform.

An estimated one-third of uninsured Americans–13 million people–work for businesses with fewer than 100 employees. Among companies with fewer than 10 workers, less than half offer employee health insurance, according to a July report by President Obama’s Council on Economic Advisors.

ReShonda Young, operations manager of Alpha Express Inc. in Waterloo, Iowa, supports the “public option” backed by Democrats in the House, which would set up a government-backed insurance plan that would compete with private plans.

‘I Can’t Go It Alone’

“I’m willing to contribute, but I can’t go it alone,” said Young. “One of my father’s goals when he founded our transport business 20 years ago was to provide health insurance for the four employees because he considered them to be part of our family. Even though our company has grown and now has 34 employees, I still can’t provide insurance because the private insurance carriers keep finding ingenious ways to boost premiums and exclude benefits we need.”

In 2008, Alpha Express Inc. would have spent $414 a month on coverage for a single employee and $1000 for an employee with three dependents. By severely limiting other business expenditures, the firm might have been able to afford the premium for single employees but not families. In the end, the company decided it couldn’t afford to pay its employees medical benefits.

Young also thought the policies cost more than they were worth. “The worst part was that the policies turned out to be nothing but a steady stream of money for private insurance carriers,” she said. “The policies didn’t include maternal health coverage and other benefits our employees need but cannot afford on their salaries, which average $29,000 a year.”

Young is a member of the Main Street Alliance, a national network of small business coalitions in 15 states, which supports a strong public health insurance option, insurance market reforms and tax credits for small business–all elements of HR 3200, which passed three committees with jurisdiction over health care reforms in the House July 31 and will come up in a floor vote in the House this month.

“The terrible toll health insurance costs poses for small business has prompted many female business owners who were never politically active to speak out at town halls and lobby Congress,” said Joshua Welter, a community organizer with the Washington Small Business for Secure Health Care Coalition, a state business coalition in Seattle that is part of the Main Street Alliance. “The overwhelming majority of members in our state coalition are women who own florist shops, retail stores, beauty shops and other small businesses and are fed up with their lack of bargaining power against giant insurance companies.”

Largest Group Opposes HR 3200

By contrast with the Main Street Alliance, the National Federation of Independent Business, the largest lobbying group for small business owners based in Washington, D.C., has opposed the major elements of HR 3200. In July, the organization, which has 350,000 members, sent a letter to the House saying it could not back a bill that included an employer mandate or a public option because it claimed these provisions would slowly destroy the private market and limit insurance choice for small business.

The group, which also attacked the Clinton reform plan in 1994, maintains that the House reform bills would not be effective in decreasing costs. While the organization acknowledges the need for a government safety net for those who can’t afford health care insurance, it believes that these interventions should be minimal. Instead, they want small businesses to pool their resources and purchase plans across state lines and would like to see a decrease in the cost of health insurance coverage.

Since 1999, the cost of employer-provided health insurance has risen 120 percent–four times faster than prices generally–according to the 2008 Kaiser Family Foundation Employee Health Benefits Survey. The number of small businesses offering health coverage decreased from 61 percent in 1993 to 38 percent in 2008.

The National Association of Women’s Business Owners, or NAWBO, which has 80 chapters across the nation, hopes that the rancor over health care reform that dominated town halls during the Congressional recess in August will subside, enabling Congress to design a bill that will control costs adequately while ensuring quality care for all.

“Our members came up with very good suggestions when we asked them in February to address the principles that should guide NAWBO’s advocacy on health care reform,” said Scanlon. “They focused first on insurance coverage of preventive care and maintaining choice of providers. They also called for improving access to consumer information on providers and quality of care, comprehensive care for all and implementation of pay for performance to improve quality of care.”

The Business and Professional Women’s Foundation is working hard to ensure that legislation will prohibit insurance companies from discriminating against small business on the basis of gender and health of employees.

“The practice of treating a woman’s pregnancy as a pre-existing condition that bars insurance must be ended,” said Frett. “Small business shouldn’t be required to pay exorbitant rates because one employee develops breast cancer or another had a heart attack five years ago but is in fine health today. But most important of all, we stress that Congress must act; the best way to support the growth and success of small businesses nationwide is by sitting down at the table and fixing the problems now.”

Sharon Johnson is a New York freelance writer.

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