Senate Bill Would Make Insurance More Affordable for Small Businesses

Small businesses -- those with 100 or fewer employees -- would have the option of joining national or statewide insurance pools to obtain lower insurance premiums under a bill recently introduced by Sen. Richard Durbin, D-Ill.

The Small Business Health Options Program (SHOP) Act addresses one of the most pressing problems faced by small business owners and the self-employed -- the high cost of providing health care for themselves and their employees. If enacted, the legislation would take several steps to make insurance more accessible and affordable for the nation's 5.8 million small business owners and 14.1 million self-employed individuals.

Provisions included in the bill would

AAFP President Jim King, M.D., of Selmer, Tenn., said he is "pleased" with the Durbin bill, pointing out that it would make "health insurance affordable for people" unable to access it now. "We have 47 million uninsured in this country," King said. "We need to decrease that number."

Most of the 47 million who are uninsured work in small businesses or other venues where they cannot access health care, said King. One of the biggest barriers to the patient-centered medical home is "simply not having health insurance."

"This bill doesn't take care of all of the uninsured, but it is a step in the right direction," he added.

FP Stephen Eby, M.D., of Cincinnati, testified before the House Committee on Small Business in January. He said at that time that the cost of a single health insurance policy in the Cincinnati area increased 80 percent between 2003 and 2008, or an average of 16 percent a year, making the purchase of insurance premiums cost-prohibitive for many small businesses.

In some cases, medical practices in the Cincinnati region are unable to obtain health coverage at any price because their employees have diabetes, high blood pressure, heart disease or other common aliments, Eby testified.

"The SHOP bill would particularly address this issue, with its prohibition on insurance rating based on health status and claims experience," said Christina Mulka, press secretary for Durbin.

Durbin has introduced similar bills in the past, but unlike previous legislation, this bill allows each state to create its own insurance pool and to opt out of the national pool. In addition, it gives state insurance commissioners broader authority to regulate the plans.

This legislation also has bipartisan support -- it is co-sponsored by Sens. Olympia Snow, R-Maine; Norm Coleman, R-Minn.; and Blanche Lincoln, D-Ark. -- greatly increasing its chances of passage in the Senate. In addition, key trade groups, including the Service Employees International Union, the National Federation of Independent Business and the National Association of Realtors, have endorsed the legislation.

"The need for health insurance, particularly for small business owners and employees, has reached crisis proportions," Durbin said in a statement provided to AAFP News Now by his office. "The bipartisan coalition of senators, business and labor groups that has come together in support of our bill is unique. And it shows that the only way to address a problem of this magnitude is to work together."