Healthcare Reform To Help Small Businesses: Obama
In his weekly Internet and radio address on Saturday, President Barack Obama cited a new White House study that suggested small businesses pay more per worker for health insurance than larger companies, and called the disparity "unsustainable and unacceptable."
"And it’s going to change when I sign health insurance reform into law," he said.
The study, conducted by the White House Council of Economic Advisers, was released Saturday as part of the administration’s campaign to generate public and congressional support for Obama’s health care reform efforts.
The study found that compared with large companies, small businesses pay up to 18 percent more to provide health insurance for their employees, leading fewer small companies to provide coverage for workers.
Obama had been urging Congress to pass health care reform legislation by the upcoming August recess. However, when it became clear this week the deadline would be missed, he said he expects a bill instead by the end of the year.
Separately, the Congressional Budget Office (CBO) said that one highly publicized plan for reducing Medicare costs to finance the health care reform initiative would produce only small savings. The news was yet another setback to the Obama administration’s healthcare reform initiative. The CBO’s assessment found that creating a powerful commission to recommend Medicare cuts would produce just $2 billion in savings over the coming decade. Cuts agreed upon by the commission would go into effect unless Congress overrode them.
The White House study relating to small businesses said just 49 percent of businesses with three to nine employees and 78 percent of companies with 10 to 24 workers offered any type of health insurance to their employees in 2008.  Meanwhile, 99 percent of companies with more than 200 workers did so.
The study found that small companies pay proportionately more than larger firms because they lack the bargaining power. Furthermore, they face higher administrative costs that effectively amounted to a "heavy tax" on small businesses.
"Right now, they are getting crushed by skyrocketing health care costs," Obama said, referring to small businesses.
Republicans rejected the new report as more political misinformation by the Obama administration as it struggles to gain approval of its top domestic priority.
"There’s a reason why almost every employer and small business group is opposed to the Democrats’ government takeover of health care, and that’s because it would impose new job-killing taxes during a recession," said House Minority Leader John Boehner (R-OH).
"No report can change that."
"America’s small businesses will pay a high price,” said Rep. Cathy McMorris Rodgers (R-WA), vice chair of the House Republican Conference, in the weekly Republican address.
Rodgers pointed to a study by the National Federation of Independent Business, and said Democratic bills would eliminate a million jobs.
The Democratic plan is "a prescription for disaster – one that will put Washington bureaucrats in charge of your family’s personal medical decision,” she said.
The Democratic-led House proposal requires employers with a total payroll above $250,000 to provide health insurance to their workers or face a surtax of up to 8 percent. A Senate committee bill would require all businesses with 25 or more employees to provide health coverage to workers or face a $750 fine per year for each employee.
Congress is considering plans to bring small businesses into the program that would exempt them from such hefty fines. Â
Among the provisions in draft legislation are an "insurance exchange" allowing certain small businesses to purchase health insurance from a variety of plans; and tax credits to assist small businesses in paying for the health coverage.
Such provisions would allow small businesses to be better “able to compete with the big boys”¦ and to compete fairly on a level playing field with big businesses to attract the best workers,” said Christina Romer, who leads Obama’s Council of Economic Advisers.
"The vast majority of small businesses, they’ll see their burdens absolutely lessened by the expansion of coverage.”
"So they are absolutely going to be more competitive,” said Romer in a conference call with reporters.
Obama criticized tactics by opponents to prevent his health care reforms as a way to "to inflict political damage on my administration. I’ll leave it to them to explain that to the American people."
"Today, after a lot of hard work in Congress, we are closer than ever before to finally passing reform that will reduce costs, expand coverage and provide more choices for our families and businesses," the president said.
Rep. Eric Cantor (R-VA), the House Republican whip, invited small business owners throughout the country to a round-table discussion with senior Republican officials on Tuesday to discuss the challenges facing small businesses.
Small business owners within the congressional districts of conservative "Blue Dog" Democrats, who have raised questions about the cost of the health care efforts, are among those invited, said Cantor spokesman Brad Dayspring.
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