Harkin touts health reform advantages for small businesses
By: Health Insurance
Submitted: 2009-10-28 10:00:19 | Word Count: 761
U.S. Sen. Tom Harkin met with several small business owners this weekend to draw attention to the benefits of health care reform for those owners and the self-employed.“Right now small businesses are at the end of the tail that is wagged,” the Democratic lawmaker explained. “They don’t get the discounts and the rates and the coverage like the huge businesses do because they just don’t have the bargaining power, and they don’t have the choices available to them. So many small businesses in Iowa basically have one insurance company to deal with or maybe two at the most. So, therefore, there is no competition out there.
“I think one of the best-kept secrets of our health reform bill that we have in Congress right now is that the biggest winners are going to be small businesses and the self-employed.”
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A lack of competition within the health care market, according to Harkin, would be alleviated when a national health care exchange is opened a few years following the passage of reform legislation. At that point, small business owners and those who are self-employed would theoretically be able to go onto the exchange either as individual entities or in cooperation with other businesses and/or individuals, which ever way provided consumers the best insurance rates.
Prior to that time, however, the bill also includes a provision that would allow small business owners to take up to a 35-percent tax credit for the portion of health care premiums they pay. Once the exchange opens, the tax credit jumps to 50 percent.
Cedar Rapids small business owner Shawn Gallagher, who had just spent a few minutes speaking with Harkin about the difficulty he and his wife have had providing health insurance coverage for their four employees at AdCraft Printing, said such reforms are not only welcome, but necessary.
“One of the reports I’ve read shows that it will cost $27,000 per person or something like that if nothing is done,” Gallagher said. “We certainly couldn’t afford that. So I guess the question is how many years it will take to get to that level. Is it 2012? 2013? I don’t know, but we aren’t that far away from it. What I do know is that we just flat-out can’t afford it, whether it is a year or two years down the road.”
Through his commercial printing business, Gallagher provides health insurance for himself, his wife and four employees. The business has experienced an average yearly increase of 14 percent in the premiums it pays. Gallagher is also quick to point out that even as he has been paying steady increases, his family and his employees are receiving less coverage and paying much higher deductibles than they were only a few years ago.
“It is very difficult. This is something that we want to provide to our employees,” he said, noting that with such a small pool of employees, any moderate illness impacting one of his employees’ families can have dire consequences on the entire company’s health insurance premiums.
Harkin, who has spent the past several months in reform hearings and public forums, said Gallagher’s plight is not at all unique.
“What we just heard from Mr. Gallagher regarding his small business and employees is, sadly, something that we hear all over Iowa and all over the United States,” Harkin said.
Gallagher, who is also a long-term member of the Democratic Party and was one of thousands of Cedar Rapids business owners heavily impacted by the June 2008 floods, was only one of several small business owners that provided Harkin details of their struggles with health insurance costs. The meetings were scheduled with the assistance of Iowa Citizen Action Network, a grassroots public interest organization that has been actively supporting national reform efforts.
During the meeting in Cedar Rapids, Harkin once again vowed that Congress will pass health care reform with a public option and have the bill on President Obama’s desk before the winter holiday recess.
