SEMA Urges President to Seek Affordable Health Care Solutions for Small Businesses

In a letter to President Obama, SEMA pledged its continued support in helping small businesses gain access to affordable health care. SEMA warns that the current legislation before Congress will not accomplish the mission since it ignores the structural reforms needed to reduce costs, increase competition and provide access to more choices.

President Obama identified the plight of small businesses in a recent radio address to the nation. He noted that small businesses lack the bargaining power of large companies and, when combined with higher per-person administrative costs, pay up to 18 percent more for the same health insurance plans.

“SEMA remains committed to enacting comprehensive health care reforms that will provide access to an estimated 27 million small business owners, employees and dependents who are now uninsured,” wrote Chris Kersting, SEMA’s President and CEO. “SEMA agrees with the President that the status quo is unacceptable. However, enacting legislation that does not sufficiently address the present system’s fundamental flaws could be even worse.”

SEMA contends that a prime necessity of any reform effort is to allow small businesses to pool their resources when shopping for insurance. For a number of years, SEMA members have urged lawmakers to allow formation of exchanges or similar mechanisms to provide access to a variety of competitively priced plans. Further, the association opposes a mandate that employers provide health insurance, believing it impossible to devise a “pay or play” system that will not risk catastrophic results for a number of companies.

Employer mandates could translate into business failures, a transfer of employees from private plans to a public option, or a downgrading of existing coverage to the required minimum.

The letter notes that the consumer must be engaged on decisions about health care costs and care. Mechanisms to accomplish the mission will include a mandate that individuals obtain insurance and have access to a variety of insurance options and tax incentives like health savings accounts. SEMA notes that the nation also needs to address the way care is provided, such as moving away from a “fee for service” medicine in favor of reimbursing doctors and hospitals based on results and the most cost-effective treatment.

Tort reform is also identified as a vital tool to eliminate billions of dollars of spending on unnecessary MRIs, CAT scans and other defensive medicine practices to protect doctors and hospitals from malpractice lawsuits. SEMA recommends that lawmakers set reasonable and predictable caps on non-economic losses, punitive damages and attorney contingency fees.

SEMA stresses that there must be widespread public understanding and consensus on what is contained in the health care legislation. The letter notes that the reforms must also be incremental in nature since any successful effort will encompass a huge shift in the way health care is paid for and delivered.

“Our SEMA member companies join thousands of other small businesses across America that are desperately seeking to provide their workers with access to affordable health insurance,” said Kersting. “Our industry provides the consumer with the option of purchasing high-quality products produced in a competitive marketplace. Our companies and their employees want the same option when it comes to health care coverage.”