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Business Group Backs Clinton's Health Reform

May 04, 1994|EDWIN CHEN | TIMES STAFF WRITER

WASHINGTON — A new coalition of small businesses, claiming membership of 340,000 employers, announced support for President Clinton's health reform plan Tuesday, stressing that private entrepreneurs are not united in opposition to a requirement that all businesses provide insurance to workers.

The coalition's support is significant because it exposes the first major split in small business opposition to the reform package and suggests that employers are responding to efforts in Congress to revise the President's plan to make it less onerous to small companies.

If Clinton and his congressional allies can effectively tap into this wellspring of support, the chances of comprehensive health care reform this year may be significantly enhanced.

The Administration is expected to get another boost today when the Congressional Budget Office releases its long-awaited analysis of a rival health reform plan introduced by Rep. Jim Cooper (D-Tenn.).

Rep. John J. LaFalce (D-N.Y.), who chairs the House Small Business Committee, said of the new small business coalition: "A very sizable segment of the small business community has seen the light."

Robert Peck, a coalition spokesman, told a Capitol Hill press conference: "The coalition came together not because we are 100% behind every clause of President Clinton's proposal but because we recognize that the train is leaving the station." Senate Majority Leader George J. Mitchell (D-Me.), House Majority Leader Richard A. Gephardt (D-Mo.) and several committee chairmen attended the press conference.

The small business community has hardly been monolithic in its opposition to Clinton's plan--it is divided, as is big business. But the highly organized National Federation of Independent Business has effectively dominated the debate with its high-decibel opposition to the employer mandate.

"We are here today to state clearly and strongly that the impression created by the NFIB is wrong," Peck said.

That many small businesses back Clinton's initiative is "one of Washington's best kept secrets," he added. The coalition represents more than 3.2 million workers, and includes such organizations as the National Assn. of Chain Drug Stores, the National Farmers' Union and the National Council of Non-Profit Assns., according to Peck.

The NFIB, however, said that the coalition's members favor the reforms because they are ill-informed. "There's a lot of small businesses out there who support the Clinton plan. But those are small businesses that don't know much about it," said Terry Hill, a spokesman for the NFIB, whose 600,000 members employ between 7 million and 9 million workers.

"Once they look at the details and see what it's going to cost them, we believe they will not support it," Hill added.

But many coalition members claimed just the opposite, saying that their health spending would drop if Clinton's plan were enacted because of its limits on how much any employer must pay in employee premiums and because of subsidies for small firms with low-wage earners.

Clinton would require firms to pay at least 80% of the insurance premiums for full-time workers, with the employee paying the rest. But no firm would have to pay more than 7.9% of its payroll, while some small businesses would pay as little as 3.5% of payroll.

"The caps are a boon to small businesses," said Peck, group vice president for government affairs of the American Institute of Architects. He said that 70% of small businesses already provide some insurance for workers, with many spending 13.5% or more of payroll.

Peck also pointed out that small businesses, as individuals and small-group insurance buyers, pay as much as 40% more than large businesses for the same coverage. Clinton's plan would group all but the largest employers into purchasing cooperatives that can command lower prices.

"Small businesses know that the current system is stacked against them. While many provide coverage, they often do so at higher rates," said Lorrie McHugh, a spokeswoman for the White House, which arranged a Tuesday meeting for coalition members with Vice President Al Gore and other senior Administration officials.

The CBO has concluded that Cooper's plan--similar to Clinton's but with far less direct government involvement--would cost $189 billion more over five years than Cooper has calculated, congressional sources said Tuesday night.

The only ways to make up for that shortfall, the agency said, would be to cut other government programs, raise taxes or increase the federal deficit, according to sources who were given summaries of the analysis.

Despite the added cost, Cooper's plan would leave as many as 25 million Americans still uninsured--out of an estimated 38 million persons now lacking medical coverage, the sources said.

Unlike Clinton's plan, Cooper's proposal would require employers only to offer employees a health plan but not to pay for it. Cooper also supports the notion of a basic benefits package but he does not spell out what would be in it.

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