PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Kerrigan Testifies Before Congress on the Broken Promise of Affordable Health Coverage

By at 30 March, 2023, 1:02 pm

In testimony before the U.S. House Ways and Means Committee, Subcommittee on Health on March 24, SBE Council president & CEO Karen Kerrigan reviewed the state of small business health coverage in the U.S., specifically how high costs continue to burden small firms and put coverage out of reach for many.

(See House Ways and Means Committee recap of the hearing here.)

In her testimony, Kerrigan noted:

“These cost pressures come on top of the challenges small business owners are facing when it comes to finding and retaining workers, and upward pressure on labor costs in general. Indeed, next to inflation being ranked as a top challenge for small businesses, filling job openings ranks as a close second or on par with inflation for most small businesses. That is why small business owners view benefit offerings, such as health coverage, as a competitive necessity in their efforts to attract and retain employees.”

Despite the fact that small businesses were promised lower costs and more choices with enactment of the Affordable Care Act (ACA), the opposite has occurred said Kerrigan. That sentiment was echoed by small business owners on the panel, who described how crushing costs forced them to make heart-wrenching decisions impacting their livelihood and employees. Matt Niswander, nurse practitioner and owner of a small medical practice, shared his experience:

“For me personally, [rising costs] created a lot of sacrifice. I’m a first-generation cattleman. Since I was sixteen years old working on a dairy farm, I dreamed about having a farm. I bought that farm in 2014 and last year I had to sell it in order to keep my medical practice alive – our patients, taking care of them, our employees and families fed. I don’t have another farm to sell.”

He added:

“People in my community don’t make a lot of money. $36,000 is the average income. We’re asking them to pay a $14,000 deductible, drive 2 hours to get to a specialist, take a day off work they can’t afford, that is going to take food out of their kids’ mouths. The Affordable Care Act is anything but.”

Kelly Moore, owner of several auto parts stores, recounted her experience of having to choose between providing health insurance or keeping people employed:

“Back then, our employees had a $500 deductible. Like I said, we not only covered employees and dependents, we offered spousal coverage at that time. With the ACA, came the challenges of meeting payroll and also health insurance. It was a time in business…recovery time wasn’t coming fast enough for businesses like mine. We dropped that coverage for spouses, and then we had to decrease the premium contribution from 80% to 70% to 60%. We ended vision, life, and dental insurance coverage for our employees.”

But Moore had positive follow-up news to report due to tax savings from the Tax Cuts and Jobs Act – specifically, that the 20% small business tax deduction provided her business with capital to re-boost health coverage. She said, “we were able not only to reinstitute not only health insurance, but also pay 100% of the life insurance policy for our employees and all of their dental and vision.”

Kerrigan reviewed various options for reform, including enhancing the small business health care tax credit, making targeted fixes to QSEHRAs, enhancing Health Saving Accounts, and tax changes that would produce equity for the self-employed regarding their ability to exclude health insurance premiums from the self-employment tax, among other reforms supported by SBE Council. Moreover, Kerrigan underscored the role of technology in advancing solutions to address both access and costs:

“SBE Council looks forward to exploring all of these solutions and more – including how telehealth, immersive technologies and Web3 – can play a growing role in delivering quality care in cost-effective and innovative ways.”

In responding to questions from both Republican and Democrat members of the committee about the importance of telehealth, Kerrigan said that technology can play a larger role in providing affordable access to care, especially in rural areas and for patients with mobility and transportation challenges. She said the temporary changes to telehealth made during the pandemic – which have been extended – must be made permanent. Expiration “would be a major step backwards,” Kerrigan observed.

A few days following the hearing, a bipartisan bill was introduced to do just that. On March 28, U.S. Representatives Michelle Steel (R-CA), Susie Lee (D-NV), Adrian Smith (R-NE), Brad Schneider (D-IL), and Senators Steve Daines (R-MT) and Catherine Cortez-Masto (D-NV) introduced the bipartisan, bicameral Telehealth Expansion Act of 2023, which makes permanent the provision that allows employers the flexibility to offer telehealth services below the deductible to employees with a Health Savings Account (HSA) paired with a high-deductible health plan (HDHP).

SBE Council will continue to support and advocate for reforms that bring greater quality, choice, affordability and access to health care and health coverage.

Read Ways and Means Chairmen Jason Smith’s (R-MO) opening statement here.

Read Ways and Means Subcommittee on Health Chairman Vern Buchanan’s (R-FL) opening statement here.

RELATED NEWS:  Small Business Coalition Urges Congress to Fix Tax Credit to Bolster Health Coverage

 

 

 

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