Guest Opinion

Health care reform helping small businesses
By Andrew Cannon, Research Associate

As published in the Jan. 16, 2011, Cedar Rapids Gazette

Health care reform is working. Though the bulk of the 2010 Affordable Care Actís provisions wonít go into effect for another three years, the provisions that have are making a difference.

Opponents of reform may choose to ignore the evidence, but they mislead the public when they fail to acknowledge the positive difference health reform is already making in peopleís lives. Contrary to Kristin Kunertís claims (Jan. 9 Gazette guest column), reform is already helping thousands of small businesses across the country.

UnitedHealth Group, the countryís largest insurer, gained 75,000 new customers who were employees of businesses with 50 or fewer employees in the six months following the passage of reform. A Maine insurer saw its small employer business increase 8 percent in 2010. A California broker has seen business grow by more than 10 percent.

A bit closer to home, Blue Cross Blue Shield of Kansas City has reported a 58 percent increase in small businesses buying health insurance since the billís passage.

Congressional leaders saw and responded to stark facts about small businesses and health insurance coverage. Nationally, firms with fewer than 10 employees face premiums 18 percent higher on average than the largest firms. In Iowa, just 28 percent of Iowa small businesses with fewer than 10 employees offered health insurance to its workers, compared to over 90 percent for larger firms.

Lawmakers created a highly targeted tax credit to help the smallest businesses provide health insurance to employees. Small businesses with 25 or fewer full-time equivalent employees that pay at least half of the premium are eligible for a tax credit of up to 35 percent of the cost of the premium.

Those credits, though dismissed by Kunertís group, have made a difference for thousands of small business owners and their employees. Blue Cross Blue Shield of Kansas City has even used the credits as a marketing tool to new customers.

The Lewin Group, a nationally respected health consulting firm, estimated that as many as 51,100 Iowa small businesses could be eligible for the small business insurance premium credit. That would mean tens of thousands of Iowans newly covered by private health insurance, because of the Affordable Care Act.

Repeal would have devastating costs. It would mean a return to the days of pre-existing condition exclusions, denials of coverage and rescission of coverage. Adult children in college or beginning their careers would lose coverage. We would return to annual and lifetime benefit limits.

And, opponents of health reform fail to admit, repeal would leave small businesses, already struggling to survive in a tough economy, with no help in obtaining quality, affordable health insurance.


is a research associate
for for the nonpartisan
Iowa Policy Project
in Iowa City.