Small business CEO says clarity needed on health care reform

By Andy Owens, Charleston Regional Business Journal

Published September 9, 2009

Small businesses should look for clarity and answers to questions about affordability in President Barack Obama’s health care reform speech tonight, the head of the S.C. Small Business Chamber of Commerce said.

For small businesses, health care reform is all about affordability, said President and CEO Frank Knapp Jr., who was in Charleston for a meeting Wednesday.

Obama is giving the speech at 8 tonight.

Frank Knapp Jr.Knapp said a lack of affordable health care is hindering economic growth by keeping entrepreneurs from starting businesses and keeping existing companies from being more competitive with other countries, such as Japan, that offer state-supported health care.

“Businesses of any size want to offer benefits because they’re going to compete for labor,” Knapp said.

The small business chamber supports health care reform but has no position on the controversial “public option,” Knapp said, because that mainly concerns the profit margins of large insurance companies.

“We’re not worried about the profitability of big business,” he said. “The private insurance market isn’t always the best friend of small business.”

The large number of reform plans and some misinformation about what a public option could entail has colored the debate over health care reform’s impact on small business. Knapp said the primary goal of a public option is to keep private insurers from increasing rates. In a sense, it’s designed to keep them honest by ensuring competitive pricing, by offering a safety valve, he said.

“It never was put there as the Trojan horse it was portrayed,” Knapp said, responding to the criticism that a public option could be used to put insurance companies out of business.

Depending on the final bill, a customer pool could reach into the millions of people in South Carolina. That would give private insurers a larger consumer base over which to spread the insurance risk, in turn guaranteeing lower rates, he said. Many of those customers will be subsidized by a health care reform bill, which means a steady flow of income for insurance companies.

Knapp said that if Obama’s speech tonight offers clarity on what health care reform means for America’s competitiveness, it could help build support behind a single plan. Obama could provide specifics such as which companies would be exempt from a mandate to offer health coverage.

In South Carolina, 85% of businesses have 25 employees or fewer. If an exemption extends to companies with 50 or fewer employees, then 94% of S.C. businesses would be exempt. But Knapp said incentives will be in place for small businesses to offer benefits even if they are exempt, including subsidies for employees at certain income levels.

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