Small Businesses Wary Of Health Care Legislation

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"Rising costs and a weak economy" are leaving small business employees "with higher out-of-pocket health costs," USA Today reports. Those small companies are "exactly what the non-partisan Congressional Budget Office (CBO) had in mind this month when it estimated as many as 15 million people could lose the benefits they currently receive through their jobs under a Democratic proposal to overhaul health care. The estimates were based on an incomplete draft of a bill in the Senate Health, Education, Labor and Pensions Committee, but they touched off a broader debate about who might lose health benefits received through their company. Workers at small firms could be more vulnerable, especially if they pay high premiums." The CBO estimated that "as many as 10 million lower-wage workers would choose to drop their employer-provided insurance because, with proposed government subsidies, it could be cheaper to buy insurance on the open market, especially if they are paying high premiums now." In addition, "Partly because of that exodus, some companies could find it no longer cost effective to offer insurance to the remaining employees, dragging another 10 million people into the open market."

A survey by the National Small Business Association found that "nearly 10 percent of small business owners say they are considering dropping health coverage next year, regardless of what happens in Congress." But "Experts say it's difficult to predict how people will react to changes in the health care system. Employees make decisions based on more than cost. Douglas Elmendorf, CBO's director, said his office assumes in its estimates that not everyone will take the cheapest option" (Fritze, 6/29).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.