Capito Touting Reforms To Help Small Businesses

Bluefield Daily Telegraph, August 13, 2005

BLUEFIELD - After failing to pass through the Senate on four previous occasions, proponents of Association Health Plans are hoping that this time will be different.

"Small businesses are West Virginia 's biggest private sector employers. However, my overreaching concern is that many small firms are unable to afford to provide their employees health insurance. The AHP reforms would give these small firms a new affordable option of providing health insurance to their employees," U.S. Rep. Shelley Moore Capito said.

There were an estimated 119,806 small businesses in West Virginia in 2004, according to the Small Business Administration. Of the 36,830 firms with employees, an estimated 96.7 percent, or 35,621, were small firms.

The Small Business Fairness Act, or H.R.525, was passed by a vote of 263-165. The act allows small businesses to pool their resources into a group health plan and purchase health insurance collectively, crossing state lines to bargain for lower rates from national insurers.

"The opposition to this reform has said that the national insurance program will take away autonomy of state insurance laws," Capito, a Republican, said. "For example, if insurers in West Virginia allow their clients to have mammograms while those in California do not, who would the national insurance make happy? However, I believe that this is a smokescreen of opposition. It is in the best interest of all insurance companies to provide preventative services to their customers."

Of the 45 million uninsured Americans, nearly 60 percent are employed by small businesses, according to the U.S. Chamber of Commerce. Congressional research indicated that 2 million previously uninsured people would receive health insurance, and that 7.5 million people total would receive inexpensive insurance under the act.

The research estimated that the average business would save 15 percent to 30 percent of current health care costs, due to small business owners having the bargaining power of collective negotiations.

With the Small Business Fairness Act passed in the House, it moves to the Senate for discussion and voting in September. Known as S.406, it is expected to receive changes and further regulations before approval by the Senate. Once approved, President Bush, who Capito said supports the plan, is expected to sign it into law.

"Health insurance costs have reached a fevered pitch and I expect the bill to pass this year because of the momentum it has gained," Capito said. "The backbone of West Virginia is our small business community. I've talked with a lot of small business owners who employ five to 50 people and they are very interested. Farmers are also very interested in the possibility of this program."