Business for Shared Prosperity

Reuters, 6/11/09

WASHINGTON (Reuters) - Small businesses would benefit significantly from an overhaul of the U.S. healthcare system even if they were required to help pay for the medical coverage of their employees, a study release on Thursday said.

The study commissioned by Small Business Majority, a nonprofit healthcare advocacy group, said small businesses could save as much as $855 billion over the next decade with a broad overhaul that aims to reduce costs and provide medical coverage to millions of uninsured.

Many small businesses are opposed to the idea of requiring employers to help pay for their workers' medical coverage.

Legislation emerging in the Democratic-controlled Congress is likely to include mandatory insurance for both individuals and businesses and federal subsidies to help small businesses and people with modest incomes purchase polices.

The study by Massachusetts Institute of Technology professor Jonathan Gruber assumes lawmakers will include some tax benefits for small businesses that offer health insurance and penalty payments for employers who do not.

Small Business Majority chief executive John Arensmeyer said the study shows that small businesses are willing to pitch in to help pay for health coverage for their employees if it helps them improve their bottom line.

"I don't sense a desire by small business to get a special deal," Arensmeyer said in an interview.

If Congress fails to enact the sweeping overhaul that President Barack Obama wants enacted into law by October, small businesses will pay nearly $2.4 trillion dollars in healthcare costs for their workers over the next 10 years, he said.

Obama argues that a revamp that reins in soaring healthcare costs is central to his effort to bolster the U.S. economy.

Most Americans with insurance obtain it through their employers. But soaring costs are pushing a number of smaller firms to drop insurance benefits.

Small business support will be crucial to passing a massive healthcare overhaul. But proposed measures that would require businesses to obtain insurance or pay a penalty have little support among business interest groups.

The influential National Federation of Independent Business issued a statement on Wednesday spelling out its opposition to an employer mandate, arguing that it would result in job losses.

(Reporting by Donna Smith; Editing by Anthony Boadle)

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