A New Hope for Small Business Health Care

In the push/pull for more affordable health care, the forces of the status quo (read insurers) are fighting to keep their money flowing. Meanwhile, health care premium costs have soared for small businesses. A recent study by the Kauffmann-Rand Institute found that health-care costs had nearly doubled between 2000 and 2005 for businesses with fewer than 25 employees. For these companies health care costs now exceed 10% of total payroll costs. Now a bi-partisan group led by Senators Durbin and Snow are trying to break the log jam.

The Small Business Health Options Program (or SHOP Act) would enable small businesses to set up health-care insurance pools and seeks to establish a nationwide pool by 2011. It also offers tax credits of more than $2,000 per family covered for employers that provide health-care to workers under this program. The national pooling feature has been fought by insurers as well as health advocacy groups (like the American Cancer Society) which do not want to see state regulations overturned. This bill addresses those concerns and as a result may have a better chance of passing. It is supported by the National Federation of Independent Businesses, the country's largest small business advocacy group.

No easy remedies have been proposed to address the overall ballooning of costs and inefficiency of our health care system. Short of a full overhaul, this bi-partisan program is a good start for small companies. Let's see if it gets through the Congressional battles, it is there where we'll see which entrenched money maker of the current system opposes it.