News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman

For Immediate Release
February 26, 2008     

CONTACT: Gail O’Connor / Jaime Zapata,  (202) 226-3636

State Health Care Reform Efforts Examined

WASHINGTON, D.C – If you are serious about addressing America’s healthcare crisis, expanding options for small businesses is a very good place to start.  That has been the consistent message of the House Committee on Small Business, which today held its fifth hearing on health care reform and examined initiatives at the state level.  The Congressional panel heard testimony from Minnesota Governor Tim Pawlenty and Pennsylvania Governor Edward Rendell, both of whom have taken steps to restructure their states’ health care systems while recognizing the importance of small firms to the success of their efforts.

“Small businesses are the majority of employers in our nation, but the current structure of the health care market undercuts their ability to purchase coverage,” said Chairwoman Nydia M. Velázquez.  “Providing affordable and accessible health care options for entrepreneurs must be part of any effort to increase the number of insured Americans.  It just makes sense.”

In Pennsylvania, the number of residents receiving health insurance from their employers has decreased by 500,000 over the past five years.  In Minnesota, health insurance costs are skyrocketing—with average premiums climbing nearly 70% between 2000 and 2006.  Figures for these states mirror national trends.  Small employers across the U.S. have seen their health premiums go up more than 8% a year since 2001, and firms with less than 24 workers have experienced even sharper increases. 

“The health care crisis affects millions of Americans—including more than 10 million children who live in households headed by self-employed workers or small business employees,” said Chairwoman Velázquez.  “Democrats in Congress have made meeting the underlying challenges a priority, and we will continue to work with the small business community to identify ways in which we can do that effectively.”

Health insurance premiums paid by small firms cost an average of 30% more than those paid by large companies, and those entrepreneurs who can afford coverage soon find themselves saddled with exorbitant administrative costs.  The result is a continued rise in the number of small firms forced to drop health coverage.  Members of the Committee have honed in on these facts during prior hearings, and several states are making them a central focus of their reform proposals.  

“Most entrepreneurs buy health insurance products that are regulated by state agencies, so much of the solution to this crisis rests on our ability to work together at the various levels of government,” said Chairwoman Velázquez.   “Viable health care reform depends on multiple stakeholders acting with a single purpose of mind.  Anything less allows the crisis to spiral further out of control and hurts America’s families.”

Click here to view video clips of today’s hearing.

Click here to read Governor Pawlenty's testimony.

Click here to read Governor Rendell's testimony.

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