Kerry against S 1955 and pushing the other bill.

Kerry: Republican Health Care Bill Will Hurt More Small Businesses Than It Will Help

5/8/2006 4:37:00 PM

To: National and Business desks

Contact: Kathryn Seck of the Senate Committee on Small Business and Entrepreneurship Staff, 202-224-9431

WASHINGTON, May 8 /U.S. Newswire/ -- Senator John Kerry (D- Mass.), top Democrat on the Committee on Small Business and Entrepreneurship, vowed today to oppose Republican legislation that will preempt state benefit and rating mandates. The Small Business Marketplace Modernization and Affordability Act (S. 1955), approved by the Senate Health Education Labor and Pensions Committee last month on a party line vote, is expected to be brought up by the full Senate as early as tomorrow.

"Affordable health care should be a right for all Americans, not a privilege for the elected and the connected. But in our eagerness to fix the problem, we cannot let America's hard working entrepreneurs, our small business owners, be used as a political pawn to move legislation that will put health care beyond the reach of the very people who need it most," said Kerry, who put forward ideas in 2004 that are now included in the Small Employers Health Benefits Program Act (S. 2510). Kerry is a leading cosponsor of the legislation and does not support S. 1955 sponsored by Sen. Mike Enzi (R-Wyo.).

S. 1955 proposes sweeping changes to the insurance market that go beyond helping small groups, including placing a ceiling on which benefits have to be covered by any insurance plan. This would likely result in lower premiums for healthy workers and soaring premiums for those most in need of health care coverage.

"No one should be fooled by this wolf in sheep's clothing; striking down decades of consumer advocacy protections at the state level will prove to be a boon for the insurance industry, not small businesses and not the American people. Congress can and must act to make affordable health care accessible to small businesses and all Americans, and we have a real opportunity to cross partisan lines and get the job done," said Kerry.

In addition, the bill would establish new association health plans, which could be sold by business and trade associations to their member businesses. These health plans could erode important consumer protections by circumventing state benefits and rating mandates. The unintended consequence would be insurers that cherry pick healthy workers effectively pricing those most in need of health insurance out of the market.

"Under S. 1955, insurers would be free to discriminate, with virtually no restrictions, according to health, age, gender and more. That means that rates for many small business plans would increase, not decrease. If every small business is charged differently depending upon the age and health of their employees, every employer bargains alone, risk isn't shared, and there is no benefit to being part of a purchasing pool," said John Arensmeyer, Founder and CEO of Small Business Majority, a national small business advocacy group. "Moreover, in many states, valuable state benefit and service requirements such as preventive care, maternity and independent review procedures, would be eviscerated by the proposed legislation, weakening the ability of small businesses to offer meaningful health care to their employees."

According to the Kaiser Family Foundation, since 2000, the number of small firms with less than 200 employees offering health coverage has declined from 68 percent to 59 percent while 98 percent of large employers provide health care.

Hundreds of small business and health advocacy organizations along with 39 state attorneys general have made their sentiments on the Republican health care plan clear.

"This bill will push consumers into barebones health insurance plans that contravene existing state laws guaranteeing coverage for such crucial services as cervical, prostate, and colorectal cancer screenings, as well as mammograms, mental health, and well-child care," said Ron Pollack, Executive Director for Families USA. "Anyone wishing to retain decent health coverage consistent with existing state laws, instead of barebones policies, will wind up with much higher premiums than they pay today."

In contrast, Kerry supports creating a national purchasing pool for small businesses that helps them get lower costs by establishing the Office of Personnel Management as the agency responsible for negotiating rates with insurers, which is included in the Small Employers Health Benefits Program Act. This bill would provide real relief for businesses with fewer than 100 employees, protect important state benefit mandates, stabilize premiums for small business owners, and establish subsidies to encourage participation.

Kerry is also advocating to help small businesses with the cost of health care premiums by giving those with less than 50 employees a refundable tax credit.

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