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Obama speech emphasizes small business insurance costs

In a Saturday speech urging the expansion of the Small Business Administration loan program, President Obama touched on the high cost of insurance for small business owners.

The president noted that the expense of health insurance can be prohibitive to small businesses’ expansion plans.

And he emphasized the savings that would be realized if health insurance reform is passed, thanks to the creation of an insurance exchange that would allow small business owners to shop for lower insurance rates. Obama also alluded to a tax credit that would be granted to small businesses; the credit targets companies whose employees’ wages are uncompetitive due to higher insurance costs.

The reform plan in the House defines a “small business” as one with 10 or fewer employees for 2013 and 20 or fewer in 2014.

A July report from the president’s Council of Economic Advisers estimates that small business health insurance costs are 18 percent higher than those of large companies. “Forty-nine percent of firms with 3 to 9 workers and 78 percent of firms with 10 to 24 workers offered health insurance to their employees,” the report reads, “compared with 99 percent of firms with 200 or more employees.”

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Posted: October 26, 2009

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