Economists, small business owners say health reform key to economic revival

The idea that the US can't afford comprehensive health care reform during a recession, as pushed by some opponents of President Obama's call for reform this year, is flat out wrong, said a statement signed by more than 330 economists and released this week by the Institute for America's Future.

On the contrary, health care reform would help revitalize the economy and remove a major barrier to long-term dynamic growth: the rapid growth of health insurance and health care costs, the statement indicated.

'Affordable coverage with good benefits,' the statement read, 'will give cash-strapped lower and middle-income Americans greater financial security – and the ability to pay their mortgages, start small businesses, save for college, pursue new job opportunities, and make other choices that will benefit our economy.'

The long-term costs of the current broken health care system drag on the economy, drain investments in innovation, and add to the federal deficit by driving up Medicare and Medicaid costs.

Another long-term benefit is that health reform would generally improve the health of American workers. 'Reforming the system through new emphasis on prevention, chronic disease management and effective treatments will eliminate wasteful spending and build a healthier, more productive workforce,' the experts agreed.

In addition, meaningful reform would help businesses survive in a difficult period. 'Ensuring health security for all will allow workers to move to those jobs that fit them best, not just those that provide health insurance, promoting entrepreneurship and labor market productivity,' the economists insisted.

Over the past decade the high cost of health insurance has driven the percentage of small businesses that provide employee health benefits down from 61 percent to 38 percent in 2008, Department of Health and Human Services Secretary Kathleen Sebelius told reporters earlier this month.

On a teleconference with reporters this week, economist Phillip Cryan, of the Goldman School of Public Policy at UC Berkeley, explained how reform would help small business. If an 'employer mandate' and a public option are part of the reform package, business owners will have a choice between providing private health insurance or contributing through a payroll tax to support a public option, he said.

By all estimates these options would cost far less than current private insurance premiums. As a result, employers currently struggling to provide employee health benefits would see major savings. 'There should be very large efficiency gains for the economy as a whole, freeing up resources for productive, job-creating economic activity,' Cryan said.

For these reasons, a new group of small business owners, the , has endorsed the main principles of the Obama health reform plan. According its website, this new coalition with affiliates in 15 states so far has endorsed a reform package that will reduce health care costs for small business owners, provide universal affordable access, including a public insurance option, and create shared financial commitment on the part of business, the government and workers to pay the cost of coverage.

According to National Field Director Margarida Jorge, the Main Street Alliance will join thousands of activists on June 25th in Washington for a large rally in support of President Obama's health reform plan and a subsequent congressional lobbying event. (Check the for more information.)

'The number one threat facing business in this country, facing small business and facing family budgets is the high cost of health care,' said Jorge in a recent interview. 'Small business people are incredibly important spokespeople on health care.'

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