Health Committee Passes Merkley Amendment to Expand Health Care Access for Small Businesses

Monday, July 13, 2009

Washington, DC – An amendment sponsored by Oregon’s Senator Jeff Merkley that would expand health care access and choices for small businesses was approved by the Senate Health, Education, Labor and Pensions (HELP) Committee today.  The Small Business Choice Guarantee amendment was offered during committee consideration of major health care reform legislation.

The Small Business Choice Guarantee amendment has been endorsed by the National Association of Realtors, the Oregon Small Business Council, the U.S. Hispanic Chamber of Commerce, the Main Street Alliance, Small Business Majority, the South Carolina Small Business Chamber of Commerce, the Center for Rural Affairs, Oregon Small Business Healthcare Initiative (OSBHI), and Oregon Small Business for Responsible Leadership (OSBRL).

“Over the last several years, I’ve talked to many small business owners who’d like to offer health coverage to their employees but just can’t afford it.  They have no market clout and they are like a lamb to the slaughter when trying to negotiate with insurance companies,” said Merkley.  “The Small Business Choice Guarantee amendment removes this obstacle by allowing small businesses to enter into gateways where their combined numbers will bring down costs and provide them with more options.”

The amendment expands options by giving many more small businesses access to newly created health insurance gateways.  These gateways encourage greater competition by pooling the number of purchasers in a specific region.  In Oregon alone, Merkley’s amendment would allow nearly 25,000 more businesses – employing 485,000 workers – to enter the gateways.  Nationally, the number of additional eligible businesses is 1.59 million, employing more than 32 million Americans.

By allowing large numbers of small businesses, self-employed, and individuals to band together and requiring clear and consistent information, gateways will give Americans more choices, apples-to-apples comparisons, and stable costs.  Insurance companies will offer a variety of insurance products in the gateways, encouraging competition, pooling risk, improving quality, and keeping costs down.

The Merkley amendment will give small businesses that offer health insurance the option of buying insurance for their employees through the gateways or continuing to purchase insurance as they always have.  Prior to adoption of the Merkley amendment, the bill allowed, but did not guarantee, small businesses with fewer than 10 employees the opportunity to participate in the gateways.  Merkley’s amendment guarantees that businesses with up to 50 employees have access to the gateways if they choose.  States or the federal government could set the minimum threshold higher, but not lower.

When employers participate in the gateways, they will continue to pay a portion of the insurance costs as they do now, and their employees will be able to choose from among the private insurance plans in the gateway or the new, public community health insurance option to find a plan that suits them best.  They also will be able to keep that insurance if they lose or leave their jobs.  The Merkley amendment will not increase the cost of the bill.

“A small business with thirty employees just doesn’t have the numbers needed to negotiate with insurance companies.  And if that small employer has even one employee with a chronic health problem, premiums can quickly become too expensive,” said Merkley.  “By pooling their negotiating power, small businesses have the same clout as Fortune 500 companies and insurers will compete for their business.  When we combine that with a community health insurance option, we’re going to see greater competition, lower costs and better services.  I’m proud the committee agreed that we need to do more to help our small employers and look forward to working with my colleagues to pass legislation to finally fix our broken health care system.”