November 3, 2009

Senator Chris Dodd (D-CT) today released his statement from the Senate Health, Education, Labor, and Pensions (HELP) Committee’s hearing on the increasing health costs facing small businesses.

“Health care reform is one of the most important things we can do for small businesses. There are more than 37,000 small businesses in my home state of Connecticut,” said Dodd, a senior member of the HELP Committee. “I am counting on them to lead the charge to create more jobs and grow our economy. And they are counting on us to pass health care reform this year so that they can do so without being strangled by the skyrocketing cost of health care.”

The full text of Dodd’s remarks, as prepared for delivery, is below.

I’d like to thank our distinguished Chairman for convening this hearing, and our witnesses for joining us.

Some have argued that, with our economy still hurting, it’s the wrong time to tackle health care reform. I hope today’s discussion can serve as proof positive that there has never been a more urgent time to reform our broken health care system.

Small businesses are the best job creators we have. When our economy finally begins to pick up momentum again and gets back on the track towards prosperity, it will be small businesses driving the locomotive. If you’re concerned about unemployment, and in my state of Connecticut we are extremely concerned about unemployment, then freeing small businesses to grow and expand is a critical priority. In fact, from 2004 to 2005, small businesses created 100% of Connecticut’s net new jobs.

We will hear it in living color from our witnesses today – but the black and white facts make it clear that rising health care costs are disproportionately burdening small businesses.

On average, small businesses pay as much as 18 percent more than larger businesses for the exact same health insurance policy. Administrative costs are three to four times as high. In Connecticut, the variance in premiums among businesses with ten or fewer employees is so great that one might pay up to four times as much as another, similar firm of the same size. As a result, fewer and fewer businesses are able to offer health insurance to their employees, with nearly three in four small businesses that forgo benefits doing so because it just costs too much.

Someone who works at a small business is 50 percent more likely to lose job-based coverage than an employee at a larger business. And young adults, who are more likely to be employees of small businesses, are being hit extra hard. One in four young adults at a small business lost their employer-based coverage in the last two years.

Small businesses have special relationships with their employees. They’re like family. Sometimes they ARE family. And good-guy employers are being forced to choose between laying off workers and cutting benefits.

One constituent of mine is self-employed and has a small group policy. He was told that his premiums will be going up 21 percent for the exact same policy – but with higher deductibles. He’ll be paying more for less. That’s life as a small business owner.

Health care reform is one of the most important things we can do for small businesses.

By creating health insurance exchanges, small businesses will be able to pool together, increasing competition and cutting premiums – according to the Congressional Budget Office, by as much as 25 to 30 percent. It will also cut administrative costs by making it easier for employers and employees to shop for the plan that works best for them.

On top of those savings, health care reform will include a generous tax credit for 3.6 million small businesses to make it easier to cover their employees. In Connecticut, up to 37,611 small businesses would be potentially eligible for the small business tax credits in health reform.

We’ll also outlaw insurance discrimination based on health status, so that small businesses won’t see their premiums jacked up if just one employee gets sick.

And by expanding insurance coverage to every American, we’ll eliminate the “hidden tax” of more than $1,000 that everyone pays to cover the cost of caring for the uninsured.

All of these steps will allow small businesses to put their money where it belongs – creating jobs and growing our economy – rather than wasting it on an inefficient and unfair health care system.

If you’re an employee of a small business, reform will help you, too.

If you have insurance through your job, that insurance will be more stable – insurance you can be sure of. It’ll cost less, too, because you’ll be able to comparison shop to get the right deal for your family.

And even if you lose that job, or change your job, or move to another state, or retire, you’ll still be able to find affordable insurance.

If you’re a young adult, you’ll be able to stay on your parents’ insurance until you turn 26, giving your family even more choice and security.

And no matter who you are or where you work, no insurance company will ever be able to cut off your coverage or deny it to you altogether because of a pre-existing condition.

There are more than 37,000 small businesses in my home state of Connecticut. I am counting on them to lead the charge to create more jobs and grow our economy. And they are counting on us to pass health care reform this year so that they can do so without being strangled by the skyrocketing cost of health care.

Thank you.

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