Small business loses in health care status quo

Bart Atwell, Las Vegas

Friday, Aug. 7, 2009 | 2:05 a.m.

In her July 30 commentary, Rep. Dina Titus, D-Nev., expressed support of the laudable goal of protecting small businesses from some negative effects of health care reform, specifically in the area of taxes. But, on analysis, taxes may be the least of their worries.

After the uninsured, small businesses look to be the biggest losers under our current system. It starts with the discriminatory prices small businesses have to pay compared with larger competitors.

According to CNNMoney.com, businesses with fewer than 100 employees pay 18 percent more per worker than bigger businesses for comparable coverage.

This price discrimination by the insurance industry creates a competitive advantage for big business. Faced with this, small-business owners are forced into a “Sophie’s Choice” — provide coverage and lose business to competitors with lower health care costs or drop coverage and place their employees at risk.

But the discrimination doesn’t end there. Small-business owners may not have the option of continuing coverage. According to former health insurance executive Wendell Potter, because smaller businesses have fewer employees, when a single employee faces an expensive illness, the average payout per employee goes up more noticeably than in a company with a broader base of employees. This triggers the insurance company to abruptly raise rates when the policy is renegotiated, often forcing the small business to drop coverage.

So if small business is truly America’s engine of economic vitality, isn’t maintaining the current health care system the worst thing we can do to our economy? A public insurance option can free small businesses from the grossly unlevel playing field they face today. Some say a public option would be “unfair” competition to private insurance companies. Isn’t the health of our small-business community more important?