Senator Sherrod Brown

WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) today attended a hearing of the Senate Health, Education, Labor and Pensions (HELP) Committee entitled, “Increasing Health Costs Facing Small Businesses.” In response, Brown issued the following statement:

“Small businesses are the engine of economic growth in this country. Unfortunately, exorbitant health care costs are today unnecessarily hampering that engine’s performance. To get it humming again, we must give small businesses new tools to control health care costs.

“Thankfully, both of the Senate health reform proposals – including the one this committee wrote back in July – help do just that. We do it by creating health insurance Exchanges, which will allow small businesses to pool their risk and leverage better deals from insurers.

“Today, small businesses pay up to 18 percent more than large companies for health insurance.  Many factors contribute to this discrepancy – including higher broker fees, higher administrative costs, and medical underwriting.  The result is an unfair competitive disadvantage for small businesses, making it harder for them to attract workers and invest in the future.

“It’s like small businesses – the engine of economic growth, remember – are being forced to drive up Terrace Drive, a very steep road in Athens, Ohio, while everyone else is coasting down the 3-C Highway. Take, for example, Cathy from Galion, Ohio.  Cathy contacted me in September. This is what she wrote:

‘I am the owner of a small contracting firm…and needless to say we have been hit hard by the recession.  …  But our main concern is the staggering cost of health care for our employees.  We started this company back in 1990, [when] we were able to pay for our employees 100%, [but] since then our insurance premiums have increased dramatically every year.  Since 2000 our premiums have increased over 250%.  In 2008 our increase was 37%; in 2009 the increase was 24%.  We have searched for other companies for health coverage but because of pre-existing conditions we cannot switch to anyone else.  We have extended the cost on to our employees.   This problem along with economic worries have [made it] quite a challenge to stay in business.’

“Thankfully, the pooling mechanisms and strict insurance regulations we wrote into this committee’s health reform bill would address these problems and level the playing field.

Health reform would also help small businesses by providing tax credits to those firms that need help offering insurance to their workers. In 2006, only 47 percent of small businesses in Ohio offered health benefits – down 5 percent since 2000.It is estimated that over 118,000 small businesses in my state of Ohio would be eligible for tax credits under current health reform proposals.

“Take, for example, Liz Coriell, a small business owner from Cleves, Ohio, a town outside of Cincinnati in the Southwestern part of my state.  Elizabeth, who is here in the audience today, owns a medical gas servicing company – but she can’t afford health insurance for her workers. As a result, it has become nearly impossible for her to attract employees.  And she herself has had to settle for a high-deductible plan with no prescription coverage, a waiting period, and a pre-existing condition exclusion. And health reform would also help small businesses by ensuring a healthy and productive workforce – even for those small businesses that choose not to offer health insurance to their workers.

“Under health reform, workers who are not offered insurance at work will have access to affordable insurance choices and government subsidies in the Exchange. This will free creative and talented Americans – including budding entrepreneurs – from being tied to a particular job because they need the health coverage that comes with it. New affordable private and public coverage options mean more aspiring small business owners will get to follow their dreams. And the health reform measures in Congress reflect the financial constraints facing many small businesses.  Small businesses are exempt from any coverage mandate or required contribution.

“The goal of health reform is to expand access to health coverage and get a grip on spiraling health care costs.  It’s about empathy and it’s about economics.  Nowhere is this more apparent than in the provisions designed around the needs of small businesses.

“These businesses care about the wellbeing of their employees, and this bill expands the
coverage options available to employer and employee alike. These businesses cannot shoulder exploding health care costs and still fulfill their potential as the engine of economic opportunity, economic innovation, and economic growth. This hearing is crucial because reforming health care coverage to the benefit of small businesses is crucial.”

Liz Coriell of Cleves OH, whom Brown highlighted in his statement, attended today’s hearing. She said: “As a small business owner whose business is in jeopardy, I’m attending today’s hearing to share what’s happening to small businesses under our current health care system. Every month because of health insurance, because of liability insurance, our business is becoming insurance poor. All the control and all the power is with insurance companies. America expects small businesses to operate without what knowing future insurance prices are and what the benefits will be. We need health reform to keep the insurance industry honest, and we need it now.”

Brown, a member of the Senate HELP Committee and co-author of the public option, is a leading voice in Congress to enact health reform that works for small businesses and middle class families.

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