STATEMENT
of the
Honorable Nydia M. Velázquez, Chair
House Committee on Small Business
Full Committee Hearing: “Common Ground: Finding Consensus on Health Reform, the Small Business Perspective”
Wednesday, June 3, 2009

Whether it’s in political discourse, the nightly news, or conversations around the dinner table, Americans consistently use the same word to describe healthcare-- “broken.” And that’s exactly what it is. With 47 million people uninsured, there is no question that the status quo is unsustainable. But where do we go from here? How do we chart a new path moving forward? Today, it seems, everyone has different thoughts for doing so. But regardless of those varying ideas, one thing is very clear-- if we’re going to fix healthcare, we have to start with small businesses.

There’s a reason we call small firms the backbone of our economy. They employ half of the private sector workforce. When these businesses do well, the whole country does well. On the flip side, however, obstacles for entrepreneurs mean challenges for American workers. In the case of small business healthcare, the challenges are significant. Already, the overwhelming majority of America’s uninsured are small business employees and their families.

In the last year, this committee has held several healthcare hearings. But today’s will be different. That is because both Congress and the Administration are committed to change, and the ball is officially rolling towards reform. Today, we will discuss ways to make sure it is rolling in the right direction.  

The call for healthcare reform is nothing new. For decades, Americans have waited for a solution that is both comprehensive and sustainable. It wasn’t until recently, however, that reform took on new urgency. For entrepreneurs, the clock is truly ticking. Already, their coverage costs are 74% higher than they were in 2001. And those rates aren’t leveling off. As a general rule, small business premiums shoot up between 8% and 16% annually. That means they will be even more expensive next year. For small businesses already battered by the recession, these costs have become impossible to absorb.

As rates continue to climb, entrepreneurs are facing tough choices-- cut healthcare or cut jobs. According to the National Small Business Association, 10% of small firms may drop coverage in the next year. That’s not a decision any entrepreneur should have to make. After all, a small business workforce is a close-knit community. Already, coverage within microfirms-- those with 10 employees or fewer--has dipped to 35%.

In the last few months, Congress has taken steps to help small firms survive the recession. We’ve made credit less expensive and capital more accessible. But until we’ve made healthcare affordable, these provisions can only go so far. That’s why Ranking Member Graves and I have introduced the Small Business CHOICE Act of 2009. That bill has the potential to reign in healthcare expenses. By cushioning costs and giving entrepreneurs better bargaining power, it promises small firms the best range of possible options.

While there is no silver bullet solution to America’s healthcare woes, there is opportunity for improving the system. At the end of the day, small businesses need options, and there are several out there. Whether it is pooling mechanisms, insurance exchanges or refundable tax credits, the one thing we know won’t work is the status quo. That has become abundantly clear.

In the coming weeks, Congress will begin laying the groundwork for real and lasting reform. It’s about time. Entrepreneurs can’t afford to wait any longer, and neither can our economy. It is critical that we come to a consensus on small business healthcare. Because until we do, small firms will continue to struggle, and so will our recovery efforts. At a time when we are counting on entrepreneurs to lead us out of recession, we can’t afford to hold them back.