The State of Play on Health Care

In time for the Senate Finance Committee’s expected vote on a health care bill Tuesday, small business advocacy group Main Street Alliance is planning events in 11 states to support a public health insurance option and what the group calls “a fair employer contribution.”

[Update: I checked with the group, and by this they mean the requirement in the House bill, which exempts companies with less than $500,000 in payroll. Firms above that threshold would have to provide coverage or face sliding-scale penalties of 2% to 8% of payroll.]

Along with the Small Business Majority, the Main Street Alliance has been pushing for health reforms from the left, in line with what most progressive advocates favor. That means a strong public option to compete with private insurers and drive costs down. It also means expanding coverage by mandating individuals (to buy) and employers (to offer) coverage. Those provisions would be coupled with tax credits to help small businesses shoulder the cost.

The position is on the other side of more established small business groups, notably the right-leaning National Federation of Independent Business, which helped kill health reform in 1994. The NFIB has fought any employer mandates and the public option, saying it will eventually put private insurers out of business and reduce choice. (The NFIB’s take on the current proposals is here.)

The Senate Finance bill in its current form replaces a public option with nonprofit “health care cooperatives.” Instead of an employer mandate, as the other major proposals in Congress have, the Finance bill has a “free-rider” provision. That would make companies with over 50 employees who don’t offer insurance contribute to any public subsidies their workers qualify for. As with the others, the Senate Finance plan includes tax credits to help small businesses afford insurance.

The big question is whether any health reform can rein in the runaway costs that force small businesses to drop coverage or limit benefits. For a look inside what drives those cost increases, take a listen to the health care special that ran on This American Life this weekend. And for more coverage on the reform bills and the lobbying behind them, check out BW’s Money and Politics blog and ongoing health reform reporting.

[Update, Oct. 14: I should clarify that Small Business Majority has not made a public option the same priority as Main Street Alliance. Here is part of SBM’s statement: “Small Business Majority supports a public option, however it isn’t the be-all and end-all of reform. Having a robust national exchange, available tax credits and strengthened support for the self-employed are more important components to comprehensive reform as far as small businesses are concerned.”]

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