In a Real Clear Health Op-Ed, SBE Council President & CEO Karen Kerrigan writes that many hospitals are destabilizing small businesses across America by exploiting a little-known federal charity program that drives healthcare costs up:

“The 340B Drug Pricing Program was supposed to help safety-net hospitals serve vulnerable patients by letting them buy prescription medicines at a discount. But because hospitals are not actually obligated to pass those savings on, many use the program to bill patients – and their employer-provided insurance plans – at enormous markups to generate profit.”

“These tactics are already driving small employers’ costs to untenable levels. Small business health premiums have risen nearly 20% in the last year alone. In recent years, rising costs have forced nearly a third of small businesses to cut health insurance benefits.”

In the piece, Kerrigan reports that the good news is that there’s bipartisan consensus to tackle the abuse, which includes more transparency on the part of hospitals that participate in the program.

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In a Washington Examiner Op-Ed, SBE Council president & CEO Karen Kerrigan writes that lawmakers need to understand the various reasons for rising health insurance costs and begin to address them or small businesses will continue to drop health coverage:

“One of these reasons is the hospitals’ exploitation of a little-known federal charity program. Without reforms, that program will only continue to drive up costs for small businesses and the self-employed.”

Kerrigan explains the 340B program, which started relatively small that now has over 2400 hospitals enrolled. She notes that if Congress stipulated that the savings of the program go to patients (not hospitals) from the beginning, perhaps the negative outcomes and distortions of the program could have been avoided. She observes:

“When patients with employer-sponsored insurance receive a drug that a hospital purchased through 340B, the employer-sponsored health plan doesn’t receive the manufacturer rebates it normally would. As a result, employers of all sizes end up paying higher net drug prices, which inevitably leads to higher premiums.”

Kerrigan urges Congress to act. Read the full Op-Ed here.

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By Karen Kerrigan –

For small businesses, rising healthcare costs remain one of the most persistent and difficult challenges to manage. Premiums continue to climb, coverage becomes harder to sustain, and employers are left asking a simple question: What is actually driving these increases, and why can’t I control them?

One area receiving increasing attention among employers and healthcare purchases is the federal 340B Drug Pricing Program. While the program was established with the important goal of supporting access to care for vulnerable populations, some stakeholders have raised concerns that its current structure may be contributing to higher costs for employer-sponsored health plans, including those serving small businesses. A new tool from the National Alliance of Healthcare Purchaser Coalitions is helping to shed light on this issue. Their newly released 340B Employer Cost Impact Calculator provides something that has long been missing in healthcare: transparency.

A Program with Good Intentions, But Growing Consequences and Costs

The 340B Program allows certain hospitals and providers to purchase outpatient drugs at discounted prices. Over time, the program has grown significantly in both scale and scope.

As the program has evolved, employers and other purchases have pointed to several dynamics that warrant closer examination:

● Lost manufacturer rebates that would otherwise lower employer costs

● Market consolidation, as hospitals acquire physician practices to expand 340B eligibility

● Site-of-care shifts, moving treatments to higher-cost hospital settings

● Incentives to prescribe more expensive drugs and fewer lower-cost biosimilars

● Higher reimbursement rates at hospital-owned facilities

The result? Higher overall healthcare spending for employers without clear savings for patients or plan sponsors.

Disproportionate Impact on Small Businesses

These dynamics can be particularly challenging for small employers. Unlike large corporations, smaller businesses often have:

● Limited negotiating power, making it harder to offset inefficiencies in the system

● Less visibility into cost drivers, which constrains informed decision-making

As a result:

● Rising healthcare costs directly impact wages, hiring, and investment decisions, as well as the ability of small businesses to continue offering health insurance as a benefit

A Tool to Quantify the Impact

The new 340B Employer Cost Impact Calculator is designed to change that. The tool allows employers and healthcare purchasers to estimate the financial impact of 340B program dynamics using company-specific, real-time inputs. Importantly, it translates a complex policy issue into clear, actionable numbers.

Employers can quickly see:

● Estimated additional cost per covered life

● Estimated total annual employer burden tied to 340B dynamics

All estimates are grounded in publicly available research, government data, and national benchmarks, making the results both credible and accessible.

As National Alliance President and CEO Shawn Gremminger explains:

“Employers deserve transparency about how the hidden costs of the program affect their health plans and their people. This calculator gives purchasers the clarity they need to understand the impact and drive more informed, value-based decisions.”

Turning Transparency into Action

Tools like this calculator are critical because they empower employers – and especially small businesses – to move from frustration to understanding.

With better data, small business owners can be better advocates and policymakers can:

● Identify hidden cost drivers within health plans

● Advocate for greater accountability and transparency in federal programs

● Push for reforms that ensure savings are actually passed through to patients and employers

● Make more informed decisions about plan design and purchasing strategies

The 340B program plays an important role in supporting healthcare access. But as is the case with many large federal programs, its evolution has introduced unintended consequences that ripple through the system.

For small businesses already navigating tight margins and rising costs, those consequences matter. Transparency is the first step toward reform and the 340B Employer Cost Impact Calculator is an important step in that direction.

Call to Action

If you are a small business owner, it’s always important to understand cost drivers and hidden costs. The survival and competitive position of your business depend on this knowledge. The same is true with healthcare costs. Explore the calculator, run your numbers, and share the results with SBE Council and your members of Congress. The insights will help SBE Council more effectively advocate for reforms, and create momentum for policy solutions in the Congress that reduce costs.

Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council

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President Trump is joined by Agriculture Secretary Brooke Rollins (left), HHS Secretary Robert F. Kennedy, Jr. and CMS Administrator Dr. Mehmet Oz (“Dr. Oz”) at the White House for “The Great, Historic Investment in Rural Health” event on January 16.

By Karen Kerrigan –

On January 16, President Trump gathered members of his administration, healthcare policy leaders, and healthcare providers at the White House to celebrate the launch of the Rural Health Transformation Program. I was honored to be a guest at “The Great, Historic Investment in Rural Health” event and to network with many doctors, nurses, and healthcare leaders – a good number of whom are passionate entrepreneurs – dedicated to providing innovative care and helping to create opportunities that will lead to economic growth for their local rural communities. The swift implementation of this program, made possible by the “One Big Beautiful Bill,” will indeed provide a boost to rural America and the efforts of many who are focused on economic development models that encourage investment, business expansion, and small business creation in rural America.

The Rural Health Transformation Program is designed to expand access to quality healthcare in rural America by bringing dependable and quality services closer to home. It will do this by investing $50 billion into strengthening rural America’s healthcare workforce, modernizing facilities and technology, and supporting innovative delivery models. Modern healthcare can be delivered in person and via innovative technologies, and the Rural Health Transformation Program addresses the potential and opportunity by combining technology solutions with recruiting and training the human capital that is needed to deliver quality care.

The U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services awarded grants to all 50 states and local leaders are hopeful that its impact will not only improve the health and lives of people in rural America, but fill a critical gap in local ecosystems and so vital to building local economies for the long term – that is, access to quality healthcare services.

Healthcare Access as an Economic Development Engine

The Rural Health Transformation Program directly supports rural economic development by helping to reverse the long-standing drivers of population and investment declines. For years, limited access to healthcare in rural communities combined with economic opportunities in more urban and suburban areas have been significant contributors to outmigration. Families, retirees, and working-age adults are far less likely to remain in, or relocate to, areas where medical services are unreliable, distant, or unavailable. Moreover, population losses shrink the local consumer base, the demand for goods and services, and the availability of workers, which put these communities and their small businesses at a disadvantage. The opportunities to start new businesses are limited, and the added disadvantage for many when it comes to access to quality broadband and healthcare compound the barriers and challenges faced by rural communities.

SBE Council President & CEO Karen Kerrigan joined President Trump, Members of Congress, healthcare leaders and providers at the White House to commemorate the Rural Health Care Transformation Program’s implementation.

Research has consistently demonstrated that access to healthcare is not only a necessity for health and well-being, but also serves as a powerful economic anchor. Rural hospitals and clinics are often among the largest employers in their regions, generating jobs, wages, and downstream economic activity. When health facilities disappear – and that is the threat many local communities continue to face – the loss extends beyond healthcare. It impacts the broader business environment. The Rural Health Transformation Program addresses the core healthcare challenges while creating a lifeline and new opportunities to make these communities viable places to live, work, and invest again. For small businesses, that means renewed opportunity.

Accessible Care: Necessary for Attracting and Retaining Human Capital

The Rural Health Transformation Program helps small businesses by improving access to healthcare for their employees. This is essential for recruiting and retaining talent. Small businesses in rural areas already face challenges competing with larger firms and urban markets for skilled workers. When healthcare access is limited, such is the case in many rural communities, those challenges intensify. Employees may leave for areas with better care options, while prospective hires may never consider rural opportunities in the first place.

Accessible, reliable healthcare is a cornerstone of workforce stability and human capital development. It supports productivity and enhances quality of life for workers and their families. The Rural Health Transformation Program complements the efforts of rural business leaders and owners who are working to attract and retain talent. By ensuring employees can receive care without long travel times or lost work hours, the program strengthens the ability of small businesses to grow, invest, and remain competitive. This provides hope to entrepreneurs and their workers who wish to continue calling their small towns “home.”

A Healthy Path Forward for Rural Economies

Access to healthcare is foundational to strong, resilient local economies, and the combined efforts of Congress and the Trump administration to advance the Rural Health Transformation Program represents meaningful action for rural America. Entrepreneurs and small businesses stand ready to work with state, local leaders, and the business community to ensure this historic investment delivers lasting opportunity in rural communities.

Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council

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NEWS

FOR IMMEDIATE RELEASE

Washington, D.C. – On December 17, the U.S. House passed H.R. 6703, the “Lower Health Care Premiums for All Americans Act.” The following statement regarding passage of the legislation may be attributed to Small Business & Entrepreneurship Council (SBE Council) President & CEO Karen Kerrigan:

“SBE Council applauds Speaker Johnson, Ways and Means Chairman Jason Smith, and House members who sponsored various measures in H.R. 6703 for their work in advancing a meaningful package that will begin to address the persistent increases in health coverage premiums that strain small businesses. Rather than continuing to layer costly subsidies onto the Affordable Care Act’s (ACA) flawed framework, this legislation moves policy in a direction that promotes affordability, flexibility, competition, and innovation in the health insurance market.”

“Since enactment of the ACA, premiums have increased nearly 80%. This is unacceptable, especially when ACA supporters promised premium costs would be reduced and choices would proliferate. H.R. 6703 will actually expand access to affordable coverage in several ways. First it will strengthen CHOICE arrangements, which allow employers to contribute tax-free funds for workers to purchase coverage that best fits their needs. Small businesses are also eligible for a tax credit to help offset costs. CHOICE arrangements have already proven effective, with 83% of employers using them to offer health coverage for the first time.”

“The bill also brings much-needed transparency to pharmacy benefit managers by requiring clearer disclosure of pricing practices, rebates, spread pricing, and formulary decisions, helping employers and workers better understand where health care dollars are going. Among other important measures, the legislation expands access to Association Health Plans, encouraging greater pooling and by extension more affordable options for small businesses.”

“Obamacare’s high costs, its flawed approach that is driving premium costs higher and restricting access to care, along with waste and abuse within the subsidy program as documented by the Government Accountability Office, should compel all members of Congress to support responsible changes that will actually bring about the promises made by ACA supporters. The ‘Lower Health Care Premiums for All Americans Act’ shifts policy in a direction that will bring more affordable choices to the marketplace. SBE Council urges the U.S. Senate to act quickly on the legislation.”

Related Content: SBE Council Letter in Support of the “Lower Health Care Premiums for All Americans Act” (H.R. 6703), December 16, 2025.

CONTACT: Karen Kerrigan, kkerrigan@sbecouncil.org

SBE Council is a nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For more than 30 years, SBE Council has advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth.

Visit www.sbecouncil.org for additional information. X: @SBECouncil

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by Raymond J. Keating –

The issue of health care costs has heated up. Of course, patients, caregivers, small businesses, policymakers and taxpayers should all be paying attention. In terms of costs and spending data, and possible policy changes, it’s essential to keep sound economics in mind. Unfortunately, looking at major health care policies implemented for some six decades now, far more often than not, politics have overwhelmed economics. Unfortunately, that means small businesses have suffered under skyrocketing premiums and a lack of affordable choices, which has kept many locked out of providing coverage as a benefit option.

Increases in Insurance Coverage Costs and Health Care Spending

In terms of some the latest data on health care costs and spending, the Kaiser Family Foundation (KFF) reported in late October, based on its annual benchmark health benefits survey of large and smaller employers, that “family premiums for employer-sponsored health insurance reached an average of $26,993 this year,” with workers on average contributing $6,850 and employers covering the rest, that is, $20,143 on average.

After a 7% increase in both 2023 and 2024, family premiums increased by 6% in 2025.

Make no mistake, these costs hit smaller businesses and entities harder than large firms, including putting those entrepreneurial enterprises at a disadvantage in terms of being able to attract and keep top talent.

According to an analysis by the AMA, “Health spending in the U.S. increased by 7.5% in 2023 to $4.9 trillion or $14,570 per capita. This growth rate is significantly higher than the 4.6% rise in 2022, and apart from the 10.4% rise in 2020 due to the COVID-19 pandemic, it is the highest growth rate observed since 2003 (8.5%).”

In light of such numbers, other longtime issues and challenges, and possible policy responses, a straightforward rule of health care economics must be applied: first, do no harm.

Good Costs vs. Bad Costs

Therefore, it’s important to understand key points underlying increased health care spending. After all, more spending on health care is not in and of itself a bad thing. Indeed, it often means improved care and greater access to such care. All of us should want to see – and benefit from – innovations and improved treatments that enhance, extend and save lives, such as in areas like medicines and prescription drugs; medical devices; delivery of care via hospitals, clinics, doctor offices, online, and so on; and medical training. These are the “good” costs involved with health care.

At the same time, there are “bad” costs.

These costs are tied to government regulations and mandates, often ineffective or wasteful programs, and perverse incentives resulting in increased costs – not only in terms of dollars, but also in terms of poor service, extended waiting times, limited choices, reduced competition and innovation, etc.

Third-Party Payments. That brings us to the issue of third-party payments, which tend to get little attention in political circles these days but long have been central to the issue of rising costs (i.e., the bad costs).  Health insurance, of course, is meant to protect individuals and families against large, unforeseen medical expenses. But third-party payments long have gone far beyond traditional insurance to cover regular, foreseeable, smaller costs. That drives up utilization and costs.

Matters get far worse, though, when government is the third-party payer. Elected officials, their appointees and government employees in general possess few, if any, incentives to control costs. In fact, the incentives work in the exact opposite direction, that is, for example, in support of more spending and larger staffs.

In fact, government accounts for a majority of health care spending. As SBE Council has noted before, “based on 2023 data from the Center for Medicare and Medicaid Services, only 11 percent of national health consumption expenditures were paid for out of pocket. That means third-party payments covered the other 89% of these expenditures. That included 32% from private health insurance, and another 5.5% from other private sources. That leaves approximately 52% covered by government, such as via Medicare, Medicaid, CHIP, and other programs.”

The market relationship between buyer and seller, or consumer and supplier, breaks down with third-party payments, and most egregiously with government as the third-party payer. Costs, again, mount as a result.

Given this framework that largely began in the 1960s, and has been expanded in assorted ways ever since, no one should be surprised that health care costs and spending mount well beyond the “good” costs tied to sound care, private investment, innovation and so on.

Build on the Positive Aspects of U.S. System

Along the way, however, two positive policy measures have stood out – one having to do with the lack of government price controls prescription drugs (until the door recently was opened), and the other being the establishment and expansion of health savings accounts (HSAs), which work to counter the ills of third-party payments.

First, a key reason that the U.S. largely has led the world in the development of new drugs has been a refusal to impose price controls, while so many other nations have travelled down this destructive path. Keeping in mind the “first, do no harm” rule of health care economics, the U.S. should close the door that was opened to price controls via the Inflation Reduction Act (IRA) of 2022.

Earlier this year in an SBE Council analysis, I explained the ills of price controls on prescription drugs; and why policymakers should be rolling back what was done in the IRA and refrain from importing price controls from other nations. Consider a few points:

“When the government steps into the marketplace to impose price controls, actual and potential returns are limited, incentives to invest in the price-controlled industry are reduced, and entrepreneurship, investment, innovation, supply and quality suffer accordingly. When price controls are applied to the pharmaceuticals, biotechnology and/or medical device industries the results rank as particularly grave, with fewer new and improved medical treatments. Therefore, the costs aren’t limited to lost businesses, investment and jobs, which certainly are bad enough, but such controls also mean lost and shortened lives, and diminished health overall. Price controls on prescription drugs and medicines are a surefire path to increased human suffering.”

“Criticisms of price controls imposed by other nations are warranted. Citizens of those nations suffer, as do patients in the U.S. and across the world, due to the resulting diminished investment and innovation regarding life-saving and life-enhancing drugs. For good measure, insurance companies, government programs and patients in those nations, by not paying market prices that, in part, reflect the risks, uncertainties and costs of developing new treatments, get to partially free ride on the investments made in the United States. However, it makes no sense to take the grim problems with price controls in other nations, and importing and inflicting them on U.S. pharmaceutical firms.”

“Rather than seeking to import price controls from other nations, policymakers should put a stop to the price controls being inflicted via Biden’s Inflation Reduction Act (IRA). The law allows the federal government to set the price of certain prescription drugs for Medicare. The first set of price controls is due to be imposed in 2026, with annual additions subsequently. If firms fail to comply, excise taxes will be imposed on their drug sales. Congress and the Trump White House shouldn’t be looking for ways to expand the imposition of price controls, but if they want to see U.S. leadership and entrepreneurship continue in providing life-saving, life-extending treatments, then they need to repeal the price controls imposed via the Biden IRA.”

The Positive Influence of HSAs. It’s critical to understand that HSAs are vital for consumer sovereignty in health care – for helping to re-establish the consumer-provider or buyer-seller market relationship. HSAs are tax-free savings accounts tied to enrollment in high-deductible health plans (HDHP). HSAs offer a triple tax advantage. HSA contributions are fully tax deductible, returns (e.g., interest earned) on HSA deposits are not taxed, and withdrawals made for qualified medical expenses are tax free.

HSAs have become an essential, positive development in the health care marketplace. According to the KFF annual benchmark health benefits survey of large and smaller employers, the percent of businesses with 10 or more employees offering HSA-qualified high deductible health plans (HDHP) increased from 7% in 2007 to 31% in 2025.

In addition, it was reported in the 2024 Devenir & HSA Council Demographic Survey “that as of December 31, 2024, there were 39.3 million HSAs, collectively providing coverage for approximately 59.3 million people.”

Expanding HSAs makes both economic and policy sense. A coalition letter that SBE Council signed earlier this year, for example, cited proposed legislation that would be beneficial:

Personalized Care Act (Sen. Cruz (R-Texas) and Rep. Roy (R-Texas)) – would decouple HSAs from high deductible health plans and expand HSAs for individuals with Medicare, Medicaid, CHIP, direct medical care, health care sharing ministries, short-term limited-duration plans, and medical indemnity plans. Would increase annual contributions, expand eligible usage, eliminate regulatory confusion around definitions, and decreases the tax penalty for nonqualified distributions.

Bipartisan HSA Improvement Act (Rep. Smucker (R-Penn.)) – permits tax-free spending from an HSA on monthly fees charged by physicians, allows employees to use their HSA at their employer’s on-site health clinic, allows for transitions of deposits from a terminating FSA or HRA, and facilitates HSA contributions even when a spouse has an FSA.

Affordable Care and Comprehensive Economic Support through Savings (ACCESS) Act (Reps. Cammack (R-Fla.) and Steube (R-Fla.)) – allows individuals to elect to receive contributions to a health savings account in lieu of reduced cost-sharing under health insurance obtained through a health insurance exchange. Would save taxpayers nearly $30 billion.

Signed into law this past summer, H.R.1, or the One Big Beautiful Bill Act (OBBBA), expanded HSAs, including individual Bronze or Catastrophic plans under the Affordable Care Act being automatically considered HSA qualified; and making permanent the use of telehealth services for HSAs.

As for consumers and patients, all benefit from the absence of price controls on prescription drugs, and the savings, choice and consumer control enhanced by HSAs. That, of course, includes small business owners themselves. And obviously small businesses benefit as providers of health insurance to their employees.

Role of Small Business. But we also should not forget the notable role that small businesses play as providers on the health care front. For example, based on the latest (2022) Census Bureau data, 59.1% of pharmaceutical and medicine manufacturing employer firms have fewer than 20 employees and 78.4% fewer than 100 workers. Also, in the broad health care and social assistance sector of our economy, 72.4% of employer firms have fewer than 20 employees, and 85.6% fewer than 100 employees.

Health care very much is about small business, and our nation needs more entrepreneurs and innovators working to make this sector more vibrant, competitive, and responsive – excessive regulation and mandates have raised barriers that work against these positive goals.

There’s a great deal that needs to be done on the health care policy front – including regulatory relief, reining in misguided and excessive government spending, and reforms of major programs. These endeavors require serious thought, discussion and debate, and if done properly, actually will improve one of the world’s best health care systems.

What has been done on the HSA front offers optimism, and policymakers should be working to expand access to and the benefits of HSAs. However, the IRA’s introduction of price controls serves as a warning about policymaking moving in a destructive direction. Remember the rule of economics for health care policymaking: First, do no harm.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of “The Weekly Economist” book series, and 10 Points from Walt Disney on Entrepreneurship.

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The Honorable Mike Johnson

Speaker

U.S. House of Representatives

Washington, DC 20515

Dear Speaker Johnson:

On behalf of the Small Business and Entrepreneurship Council (SBE Council), I write in strong support of the “Lower Health Care Premiums for All Americans Act.” Escalating healthcare costs undermine small business competitiveness and growth. This longstanding challenge has worsened under the “Affordable Care Act” (ACA). Rather than delivering affordability and choice as promised by supporters, the ACA’s rigid and intrusive rules, weak incentives for small businesses, and expensive government bureaucracy has fueled the upsurge in premium prices and undermined choice and access. Pouring expensive subsidies on top of the pricey ACA mess is not responsible policy.

SBE Council has long supported policies that promote market competition and innovation to ensure that the self-employed, entrepreneurs, small business owners and their employees can access health coverage options in a cost effective and sustainable way. The “Lower Health Care Premiums for All Americans Act” is an important step in that direction.

The legislation codifies policy established in 2019 for “Custom Health Option and Individual Care Expense” (CHOICE) arrangements, which allow employers to contribute tax-free funds for workers to buy ACA-compliant individual market plans. Employees are empowered to select plans that best meet their needs and pay premiums on a pretax basis. Moreover, small businesses will be eligible for a tax credit when they offer a CHOICE arrangement, which will help to alleviate cost pressures.

The legislation also addresses high costs by improving transparency. Currently, there is limited visibility into how prescription drug prices are set and how costs are passed through the system. Requiring pharmacy benefit managers (PBMs) to provide clear information on pricing practices, rebates, spread pricing, and formulary decisions will give employers, workers, and the market greater insight into where dollars are going, and will help small businesses better manage health care spending.

The legislation expands access to Association Health Plans (AHPs) by codifying rules established in 2018, which will encourage greater pool activity and, by extension, more affordable choices for small businesses. In addition, the bill exempts stop-loss plans from “health insurance coverage” (under ERISA) and will help small and mid-sized employers protect themselves against catastrophic claims while continuing to offer tailored benefits.

The “Lower Health Care Premiums for All Americans Act” reflects a sound approach that will improve affordability and choice for small businesses. SBE Council appreciates your leadership in advancing reforms that begin the process of moving away from the financially unsustainable government-centered ACA to an approach that improves health coverage affordability, choices, and access for all Americans.

Sincerely,

Karen Kerrigan, President & CEO

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A Make America Healthy Again (MAHA) roundtable was hosted at the White House on March 11, where Health and Human Services (HHS) Secretary Bobby Kennedy gathered experts – specifically “MAHA Moms” – as part of his MAHA Commission work initiated by President Trump’s Executive Order that established the commission with reportable findings and recommendations on the chronic disease crisis. Other cabinet members participating included Agriculture Secretary Brooke Rollins and Education Secretary Linda McMahon, along with White House Press Secretary Karoline Leavitt. SBE Council president & CEO Karen Kerrigan attended the event.

Secretary Kennedy provided an overview of his initial work to address chronic disease and roundtable participants discussed the scope of America’s health and mental health challenges, including:

● Six in ten Americans have at least one chronic disease, and four in ten have two or more chronic diseases.

● An estimated one in five United States adults lives with a mental illness.

● Across 204 countries and territories, the United States had the highest age-standardized incidence rate of cancer in 2021, nearly double the next-highest rate. From 1990-2021, the United States experienced an 88 percent increase in cancer, the largest percentage increase of any country evaluated.

● In 2021, asthma was more than twice as common in the United States than most of Europe, Asia, or Africa.

● 40 percent of school age children have one chronic disease.

In terms of how the U.S. is currently dealing with the crisis, Secretary Kennedy said, “We have sick care, not health care.”

Much of the conversation focused on the food Americans are eating, along with their lack of movement. During the roundtable, Secretary Kennedy announced that he was directing the Food and Drug Administration (FDA) commissioner to start the process of changing the rules to eliminate the self-affirmed “Generally Regarded as Safe” (GRAS) pathway for new food ingredients. He is also directing an improvement to post-market assessments of GRAS chemicals currently in food to “rapidly identify the compounds that are making Americans so sick, and so that American consumers and regulators can make informed decisions.” Secretary Kennedy noted that there are 10,000+ ingredients in USA food, while Europe has 400. He added that former President Biden’s new dietary guidelines are 452 pages. Secretary Kennedy is aiming for 3 pages.

Kerrigan catches up with Secretary Kennedy on the MAHA agenda and the important role of entrepreneurs in the health, wellness and fitness sectors.

Secretary Rollins said that much of the change – getting American healthy and moving again – can and should happen at the local level with leadership from Washington. Smart policy reforms, education and promotion at the national level, and reinforcement through activities and outreach at the community level are vital to making this happen.

Small businesses in the health, wellness, fitness and mental health space can play a big role in this transformative change, as many SBE Council members have been working to do just that for some time. SBE Council will continue to engage with Secretary Kennedy and the MAHA Commission on this important initiative, as entrepreneurs and small businesses are key conduits to influence the lifestyle and policy changes that are needed to Make America Healthy Again.

SBE Council Policy Priority Spotlight: Expanding Health Savings Accounts (HSAs): An important part of SBE Council’s MAHA agenda is strengthening HSAs to bring more choice, price sensitivity, competition and common sense to the health care market. HSA expansion and improvement will help to boost preventative care, and by expanding eligible uses can help to move the needle on the crisis-care model that is driving up costs and keeping people unhealthy.

In a new Small Business Insider blog post, SBE Council chief economist Ray Keating looks at the data and economics of HSAs, and legislative efforts to expand access to – and the power of – HSAs.

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by Raymond J. Keating –

If you’re concerned about health care spending, innovation in medical treatments, and overall quality of care, then you shouldn’t be arguing for more government involvement in health care, such as via expanded government spending or government-imposed price controls on medicines. Instead, constructive and imperative policy reforms need to be focused on expanding consumer control and choice, and competition. That means, for example, expanding access to tax-free health savings accounts (HSAs).

Price Sensitivity Missing in Healthcare

Consider that, based on 2023 data from the Center for Medicare and Medicaid Services, only 11 percent of national health consumption expenditures were paid for out of pocket. That means third-party payments covered the other 89 percent of these expenditures. That included 32 percent from private health insurance, and another 5.5 percent from other private sources. That leaves approximately 52 percent covered by government, such as via Medicare, Medicaid, CHIP, and other programs.

Third-party payments mean that someone else other than the consumer is picking up the tab. And of course, medical insurance is supposed to do that, in particular, protecting individuals and families against large, unforeseen medical expenses. But third-party payments go far beyond that today in terms of covering regular, foreseeable, smaller costs.

For good measure, when government is the third-party payer, the ills of government spending come into the equation. So, while costs and utilization rise with third-party payments in general, they expand more rapidly with government funding, as those in government have few incentives to control costs as they are spending other people’s – i.e., taxpayers’ – money.

In effect, with third-party payments, again, especially with government as the third-party payer, the market relationship between buyer and seller, or consumer and supplier, breaks down. Costs mount as a result.

So, we are left to disentangle the “good” and the “bad” in increased health care spending. That is, how much is from improved care and investments in life-saving and life-enhancing treatments, and how much is from poor or absent incentives regarding costs?

While government is bound to play some part in the funding of health care – such as for low-income earners – the policy emphasis should be on limiting governmental incentives and opportunities for waste, while expanding consumer sovereignty and bolstering the market transaction between consumer and supplier.

The Role of Health Savings Accounts and Strengthening their Impact

HSAs are vital for consumer sovereignty in health care. An HSA is a tax-free savings accounts tied to enrollment in a high-deductible health plan (HDHP). HSAs offer a triple tax advantage in that HSA contributions are fully tax deductible, returns (e.g., interest earned) on HSA deposits aren’t taxed, and withdrawals made for qualified medical expenses are tax free.

Over the past two decades, HSAs have become a vital part of the health care marketplace. This is made clear in the following two charts from the latest KFF Annual Employer Health Benefits Survey, with HSA-qualified HDHPs rising from seven percent of businesses offering health coverage in 2007, for example, to 22 percent in 2024, and the percentage of covered workers with HSA-qualified HDHPs going from 3 percent to 21 percent.

Also, in its third annual Devenir & HSA Council Demographic Survey, Devenir and the American Bankers Association’s Health Savings Account Council found that the 35.5 million health savings accounts existed at the end of 2022, and they helped cover almost 72 million Americans.

In laying out SBE Council’s policy agenda for the new Congress and Trump administration, President and CEO Karen Kerrigan included the following point:

“Expensive health coverage costs and limited options continue to frustrate small business owners and weigh down the competitiveness and growth of their firms. SBE Council will push forward with efforts to strengthen and improve health savings accounts (HSAs), encourage and expand telehealth, reform and improve the small business health tax credit, and revive progress during the first Trump administration that reduced barriers to small business pooling and transition coverage options for new entrepreneurs and the self-employed.”

Legislative Solutions and Proposals

Regarding HSAs, Kerrigan highlighted the HSA Modernization Act. The legislation was introduced by Congresswoman Beth Van Duyne (TX) and Congressmen Dan Meuser (PA) and Dan Crenshaw (TX) in 2025.  Rep. Van Duyne noted that the act “will cut unnecessary regulations, modernize health savings accounts, and expand HSA eligibility for disabled veterans, working seniors, and Native Americans while offering Americans more control over their care.” The act would allow spouses to provide “catch up” payments in the same HSA, and increase contribution limits.

Among other proposed legislation to improve HSAs, the Personalized Care Act, introduced by Senator Ted Cruz (TX) and Rep. Chip Roy (TX) would, among other measures, decouple HSAs from high-deductible health plans, expand access to HSAs, and increase annual contributions.  A broad coalition exists for expanding HSAs via decoupling – from business associations, to taxpayer groups, health care organizations and more. A February 26 Open Letter to Congress, for example (signed by SBE Council), focuses on the importance of this approach and using the reconciliation package to advance the reform.

For good measure, price transparency in health care is vital so that consumers can make informed choices. As Kerrigan noted in a recent statement supporting President Trump’s “Making America Healthy Again by Empowering Patients With Clear, Accurate, and Actionable Healthcare Pricing Information” Executive Order:

“Small businesses and their employees stand to benefit from universal transparency through lower costs and more choices. Entrepreneurs and innovative startups will have clearer information and data that can help them launch new enterprises to positively disrupt this sector.”

On the legislative front, for example, the Health Care Prices Revealed and Information to Consumers Explained Transparency Act, or the Health Care PRICE Transparency Act, introduced in the previous Congress by Rep. Warren Davidson (OH), would provide “statutory authority for requirements for hospitals and health insurance plans to disclose certain information about the costs for items and services,” including publishing “in their list of standard charges certain rates negotiated with insurers, discounts for cash payments, and billing codes,” as well as publishing “the standard charges for the services provided by the hospital that may be scheduled in advance.” As for insurance plans, they would need to “publish the in-network and out-of-network charges for covered items and services and the negotiated prices for covered prescription drugs.”

In the end, price controls on medicines undermine the incentives for developing new and improved medicines.

Price controls, for example, attack the “good” part of increased health care spending, if you will. More government funding of health care expands the “bad” part of spending, as incentives are lacking to control costs and waste. Meanwhile, HSAs address the problem of third-party payments, by re-establishing the market buyer-seller relationship and boosting consumer sovereignty.

Turning away from more government controls and programs, and instead, boosting access to HSAs – including for entrepreneurs, small businesses and their employees – would be good news in terms of health care policymaking.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of “The Weekly Economist” book series, and 10 Points from Walt Disney on Entrepreneurship.

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Centers for Medicare and Medicaid Services

U.S. Department of Health and Human Services

Attention: CMS-4208-P

To Whom it May Concern:

The Small Business & Entrepreneurship Council (SBE Council) appreciates the opportunity to submit comments on the proposed rule to expand Medicare and Medicaid patients’ access to anti-obesity drugs such as GLP-1s. For more than 30 years, SBE Council has worked on a range of policy and private-sector initiatives to improve the climate for business creation and competitiveness, including solutions that result in affordable health care access and coverage. Entrepreneurs want to provide their employees with quality and results-oriented solutions that promote their health and wellbeing. The rule (CMS-4208-P) being proposed by the Centers for Medicare and Medicaid Services (CMS) is an important solution to that end.

A report published by GlobalData ( Assessing the Economic Impact of Obesity and Overweight on Employers, February 2024) found that that annual costs associated with obesity total $347.5 billion for employers, including:

● $146.5 billion in higher medical costs for employees and their dependents

● $82.3 billion in higher absenteeism (missed workdays)

● $160.3 billion in higher presenteeism (reduced productivity due to illness)

● $31.1 billion in higher disability costs $5.2 billion in higher Workers’ Compensation Program costs

The report found that the annual per-worker cost is $6,472, including:

● $1,514 higher medical costs

● $664 higher disability costs

● $122 higher injury worker compensation

● $1,755 higher absenteeism costs

● $2,427 higher presenteeism costs

High health care and health coverage costs have been an enduring challenge for small business owners and the self-employed. And the significant costs and conditions associated with obesity have a downstream negative effect on small businesses, both in terms of health coverage costs and lost productivity in the workplace.

As expressed time and again by small business owners and the self-employed, affordability is the top barrier to purchasing or providing coverage. In one survey among many conducted by SBE Council over the years on health care issues, it was found that small business owners are highly dedicated to their employees’ health. When asked to identify the biggest benefits of offering health insurance benefits, the wellbeing of employees tops the list, followed by competitiveness:

Four in five small business owners agree that giving workers access to health coverage is business critical (79%).

Bringing costs down is central to the universal coverage and access goal that many Administrations, lawmakers, and policy leaders have sought over the past 30 years or more. Covering anti-obesity medicines is an important step to help bring costs down.

New research published in December 2024 found that modest weight loss can help cut health care spending costs for both employers and the government. The research, published in JAMA, revealed that modest to moderate weight loss would produce cost-saving results for individuals with employer-sponsored coverage.

● A 5% weight loss reduced health care spending by $670 or 8% per person annually.

● A 25% weight loss reduced spending by $2,849 annually or 34%.

● For weight loss of 5-20%, individuals with the following comorbidities would realize the greatest reductions in annual health care spending:

-Obesity and diabetes: $1,840-$5,821

-Obesity and arthritis: $1,917-$6,143

-Obesity and chronic back problems: $1,422-$4,729

Medicare stands to save even more:

● A 5% weight loss reduced spending by $1,262 (7%) per person annually.

● A 25% weight loss reduced spending by $5,442 (31%) per person annually.

Covering anti-obesity medicines to help improve the health and lives of people, reduce spending costs, and make the U.S. a healthier and more productive nation is a smart and sensible action.  SBE Council strongly supports coverage of these anti-obesity drugs.

Thank you again for the opportunity to express our views, and please do not hesitate to contact SBE Council for further questions.

Sincerely,

Karen Kerrigan. President & CEO

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