NSBA member and Past Chair Raymond Arth testified before the Senate Finance Committee June 10 on the difficulties the small-business community faces in securing quality, affordable health insurance. The hearing, 47 Million & Counting: Why the Health Care Marketplace is Broken, took a detailed look at the failures of the U.S. health care system while aiming to outline what the key tenets to any reform should be.

Arth was one of four panelists before the Committee, and described the ever-increasing cost his company, Phoenix Products, Inc., has faced and will continue to face in providing health insurance. He also outlined NSBA’s health reform proposal—a critical priority for America’s small businesses who have been responsible for creating 93.5 percent of all net new jobs since 1993.

“The small-business community’s role in creating jobs and stimulating economic growth cannot be underestimated or made merely into a talking point,” urged Arth. “Neither can the extreme time and financial drain the current health care system poses for small-business owners.”

Members of the Committee agreed that the cost of health care disproportionately and unfairly hurts the small-business community. Driving that point home, Arth is facing a 35 percent premium cost increase in 2008—that equates to nearly $40,000 Arth and his employees will have to figure out how to fund.

“My company has experienced many challenges over the years and we have been fortunate to be able to find ways to continue providing our employees with a quality insurance plan that was affordable. But now we are squeezed between our group’s demographics and explosive increases in health care costs. After 31 years we may have finally found the limit of our ability to provide this benefit to our employees,” stated Arth.

The hearing panelists and many Senators in attendance outlined their suggestions for reform which include individual responsibility, federally-defined rating rules, tax parity on health insurance, and a truly basic benefits package—all of which are key pieces to the NSBA reform proposal. The hearing falls less than a week before the Senate Finance Committee hosts the Prepare for Launch: Health Reform Summit in Washington, D.C. for members of Congress to discuss reform proposals in a bipartisan, bicameral fashion.

Arth also highlighted a key piece of legislation, the Equity for Our Nation's Self Employed Act of 2007 (S. 2239), introduced by Sens. Jeff Bingaman (D-N.M) and Orrin Hatch (R-Utah) that would allow the self-employed owner of a non-C Corporation to treat their contributions to health insurance premiums as “pre-tax,” something all other workers and business-owners are currently allowed to do. This hidden tax on self-employed business owners adds up to an additional 15.3 percent tax burden.

The hearing was productive in terms of gathering information from a variety of perspectives—patients, small business, insurers, and academics—that will likely set the stage for next week’s summit. Arth applauded the Committee for their work toward reforming the U.S. health care system and urged their continued vigilance on behalf of America’s small-business community.

Please click here to view the full testimony